Supervalu goes small for big spenders in Chicago

CHICAGO, Sept 18 (Reuters) - Supervalu Inc (SVU.N: Quote, Profile, Research, Stock Buzz), best known for supermarkets such as Jewel-Osco, is testing a small-store format again to attract upscale professionals who don't want to dine out, but don't want to cook much either.

Supermarkets have followed in the steps of chains such as Whole Foods Market Inc (WFMI.O: Quote, Profile, Research, Stock Buzz) by offering more prepared foods in their large stores in recent years.

Now they're trying out smaller locations with ready-to-go entrees, as well as produce and basics like milk, so that shoppers can skip the hassles of a big store when they only want a few items.
"I don't think that anybody has got it yet where they've got the exact format that they could run with and know exactly why it works," said Jim Hertel, managing partner at Willard Bishop LLC, a grocery consulting firm.

Supervalu's newest store, Urban Fresh by Jewel, opens in Chicago on Thursday. It is clearly targeted toward shoppers who want to get in and out of the store quickly with pre-made meals and items that don't take much time to prepare.. . . more

SUPERVALU Launches Its New Exclusive Culinary Circle(TM) Brand of Premium Foods

Culinary Circle delivers a casual restaurant meal experience at home, at a fraction of the time and cost of dining out

MINNEAPOLIS--(BUSINESS WIRE)--Sept. 3, 2008--At a time when consumers are increasingly looking for ways to stretch their food budgets without sacrificing quality and taste, SUPERVALU (NYSE: SVU) today announced the launch of its new Culinary Circle(TM) brand of premium food lovers' foods. The brand enables consumers to enjoy restaurant-quality food right at home easily and affordably, and is available nationwide at the company's family of grocery stores, including Acme, Albertsons, bigg's, Cub Foods, Farm Fresh, Hornbacher's, Jewel-Osco, Lucky, Shaw's/Star Market, Shop 'n Save and Shoppers Food & Pharmacy.
The Culinary Circle brand will initially feature more than 150 items in the deli, bakery, frozen and center store aisles. Offerings range from on-the-go meals, elegant hors d'oeuvres and gourmet spreads to high-end desserts and artisan breads. Culinary Circle products will be priced approximately 20 to 25 percent below casual restaurant food and about 10 to 15 percent lower than other premium national brands.

"The rising cost of gas and other household necessities makes it harder for many consumers to justify dining out as often as they'd like," said Chad Terrell, Culinary Circle brand manager. "Our line-up of chef-inspired Culinary Circle products is designed to bring affordable, quality meals to the dining room, and help meet the needs of consumers who love to eat out and sample different kinds of foods or indulge in the kinds of meals they simply don't have the time to make at home.

"Culinary Circle brings families back to their own dining rooms with the quality and unique variety of food found on casual dining restaurant menus," continued Terrell.

A recent study conducted by the Food Marketing Institute found that more than 70 percent of Americans are dining out less often due to economic concerns.(1) At the same time, consumers have become increasingly accustomed to a broader and more unique array of foods through restaurants, travel and televised cooking shows. So despite the economy, they continue to have high expectations for the foods they eat, seeking out meals with bold or unexpected flavors or delicious aromas.(2)

"Culinary Circle exemplifies SUPERVALU's continued focus on being a customer-centric organization," said Duncan Mac Naughton, executive vice president, SUPERVALU merchandising and marketing. "Significant research and understanding of consumer insights went into the development of the brand, which has enabled us to appeal directly to consumers' desire for premium products that help them recreate the casual restaurant experiences they've come to enjoy, at a fraction of the cost."

Inspired by the cuisine at some of today's most popular restaurants, Culinary Circle products offer the latest in flavor trends and are made with unique, fresh, high-quality ingredients. Choices in the Culinary Circle line range from traditional favorites to original items, some of which include:

Entrees
-- Pork Carnitas Enchilada Casserole
-- Rotisserie Chicken
-- Chicken Marsala over Linguini

Side Dishes
-- Rosemary Garlic Roasted Potatoes
-- Oven Roasted Vegetables

Soups
-- Chicken Noodle
-- Tuscan Tomato & Vegetable

Pizzas
-- Ultra Thin Chicken Alfredo
-- Ultra Thin Margherita
-- Rising Crust Spicy Italian Sausage

Frozen Desserts
-- Pineapple Upside Down Cake
-- White & Dark Chocolate Mousse Cake

Cookies
-- Key Lime White Chocolate Homestyle Crisp Cookies
-- White Chocolate Macadamia Nut Homestyle Crisp Cookies
-- Chocolate Brownie Soft & Chewy Cookies
-- Chocolate Chip Lava Cookies

Marinades
-- Jamaican Style Jerk
-- Raspberry Chipotle
-- Shanghai Five Spice Teriyaki

The story behind the circle

Each Culinary Circle package bears a semi-circular logo that evokes the drizzle of chocolate or a specialty sauce on a restaurant plate known as the "chef's mark," the finishing touch to fine dishes. Presented in palette-pleasing colors of espresso brown and metallic copper, the design adds a touch of elegance to the brand and the feel of a contemporary kitchen. Packages feature high-level photography that depicts the hand-created quality of the products, and copy that emphasizes the authentic ingredients or special cooking techniques that help bring each item to life.

Consumers can find easy recipes incorporating Culinary Circle products online at www.culinarycircle.com. The recipes include ideas for appetizers, entrees and desserts, and can be made by combining a Culinary Circle product with everyday grocery items. Many can be made in as little as 10 minutes, such as "Shanghai Chicken Wings" made with frozen chicken wings, Culinary Circle Shanghai Five Spice Teriyaki Sauce and green onions, or "Macaroon Key Lime Parfaits" made with key lime yogurt, kiwi fruit, raspberries and Culinary Circle Macaroon Pecan Chocolate Chip Cookies.

Culinary Circle joins several SUPERVALU private-label brands, including Wild Harvest(TM), Baby Basics, Java Delight, Homelife and Shoppers Value.

Source: Supervalu

Jewel Planning ‘Urban Fresh’ Small-Format Store

Jewel-Osco here said Tuesday that it would open a 16,000-square-foot store in Chicago’s Lincoln Park neighborhood under the “Urban Fresh, by Jewel” banner this fall, joining a wave of food retailers testing new smaller formats. The new store will be designed as a specialty grocery store with a focus on fresh and prepared meals for busy shoppers. “The smaller-format store is an exciting complement to our larger, more traditional grocery stores,” Keith Nielsen, president of Jewel-Osco, said in a statement. “We hope to learn as much as possible from the effort, paying close attention to customer feedback, so we can deliver the best experience for our shoppers.” Jewel-Osco is a division of Supervalu, Minneapolis. Safeway, A&P, Sobeys and Wal-Mart, among others, have also recently opened or announced plans to open smaller format stores as well.

Source: Supermarket News

Supervalu Sees Shoppers Adjusting to Economy

MINNEAPOLIS — Supervalu here said yesterday that shoppers seem to be seeking out more promotions, buying more store brands and using more coupons as a result of the soft economy and rising food prices. In a conference call with analysts discussing its fourth-quarter earnings, Jeff Noddle, Supervalu’s chairman and chief executive officer, also said food retailers have been more aggressively promotional in the current environment but have continued to pass cost increases along to consumers in the form of higher retail prices.

“We don’t see anybody really using inflation or not passing through inflation as a competitive strategic marketing tool,” he said. “It’s been pretty orderly.”

Supervalu also said it would begin rolling out its new “Simply Good Meals” meal-solution program, located in the deli department, which consists of a self-service island with “restaurant-quality, easy-to-assemble meals.” For the fourth quarter, which ended Feb. 23, Supervalu reported $156 million in net income, up 30% over year-ago results, on a slight sales gain, to $10.4 billion. For the full year — the first full year to include a full 52 weeks of Albertsons results — net income was up 31.2%, to $593 million, on a 17.8% gain in sales, to about $44 billion. Retail sales for the fourth quarter were down slightly, to $8.1 billion, primarily due to store closures. Identical-store sales were flat.

Source: Supermarket News

Supervalu 4Q profit up on lower interest expense

MINNEAPOLIS - Supervalu, one of the nation's largest grocers, said fourth-quarter profits jumped 30 percent as it paid down debt and cut administrative expenses.

Earnings rose to $156 million, or 73 cents per share, from $120 million, or 57 cents per share in the year-ago quarter, Supervalu Inc. (nyse: SVU - news - people ) reported. The company said it earned 77 cents per share excluding acquisition costs.

Revenue climbed less than 1 percent to $10.39 billion, from $10.3 billion.

Analysts expected 71 cents per share on revenue of $10.17 billion, according to a poll by Thomson Financial.

Supervalu shares rose 5 percent, or $1.45, to $30.50 at the open of trade.

Retail sales declined slightly to $8.1 billion because of store closures. Sales at stores open at least a year were flat.

Fourth quarter retail net sales were $8.1 billion compared with $8.2 billion last year, primarily reflecting the impact of store closures in the acquired operations combined with flat identical store sales.

Supervalu is also a food distributor, and operating earnings in that business rose $20 million, to reach $75 million. Retail operating earnings rose by $11 million to $374 million.

Eden Prairie-based Supervalu has been paying down debt since buying most of Albertson's stores in 2006. Chairman and CEO Jeff Noddle said the company beat its own goal of paying off $400 million by June. Its bill for interest dropped to $157 million for the quarter, compared with $173 million a year ago. Noddle said Supervalu would try to pay off another $400 million in the upcoming year.

In fiscal 2009, Supervalu forecast earnings of $3.10 to $3.25 per share excluding costs. Analysts had been anticipating $3.07 per share. The company expects same-store sales to grow 1 percent to 2 percent not counting fuel.

For the full year, Supervalu earned $593 million, or $2.76 per share, up from $452 million, or $2.32 per share during the prior year. Revenue rose to $44.05 billion, from $37.41 billion a year ago.

Source: Forbes