Supervalu reducing food items to free shelf space

by Eric Schroeder
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MINNEAPOLIS — Supervalu Inc. said it has removed about 20% of the stock-keeping units from several major food categories and exited 26 general merchandise categories that were not core to customer focus, moves the company believes will improve its ability to position private label products.

“We were simply over-assorted before,” said Craig Herkert, president and chief executive officer, during an April 20 conference call to discuss fiscal 2010 results. “The 20% of the s.k.u.s that we have taken out in some of these categories still allows us to be an assortment leader. There may have been a handful of items that we’ve had to respond to consumer requests for, but it has been very, very small. And frankly, the improved in-stock that we are seeing is that we are actually improving sales.”

He continued, “In addition to improving in-stock, we are able to position our private brands much better than we were before. We have a great private brand program. We have a team here that has delivered beautiful products, but we were hiding them, quite frankly. Because we were over-assorted, it was very difficult for our consumers to find these products.”

For the year ended Feb. 27 Supervalu posted income of $393 million, equal to $1.86 per share on the common stock. This compared with a loss of $2,855 million in fiscal 2009. Net sales in the year fell 9% to $40,597 million from $44,564 million.

Operating earnings in the retail food segment totaled $989 million on sales of $31,637 million during fiscal 2010, which compared with a loss of $2,315 million and sales of $34,664 million in fiscal 2009.

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