NEW YORK - While Supervalu won't spend on technology in quite the way its acquired business Albertsons did, the combined companies will continue to benefit from Albertsons' prior investments, according to Jeff Noddle, chairman and chief executive officer of Supervalu, Minneapolis.
Speaking at the Goldman Sachs Global Retailing Conference here last week, Noddle said Supervalu would use accounting, retail and back-office technologies of the former Albertsons, and that the Six Sigma methodology employed there has "some upside."
"We're looking to apply some of those [Six Sigma] principles across the legacy Supervalu operations," he said.
Six Sigma is a methodology developed to limit defects and improve efficiency, developed at Motorola and notable for its success at companies such as General Electric.
Albertsons adopted Six Sigma practices in early 2004, championed by Larry Johnston, the former Albertsons CEO who'd seen the process save some $300 million during its first year of implementation at GE.
"Six Sigma has the potential to move Albertsons to an all-new level of productivity and customer service in our industry," Johnston said then.
The majority of Supervalu's capital spending will go toward store remodels, primarily directed at the recently acquired Albertsons stores, Noddle said. The Shaw's division in New England and the Albert-sons stores in Southern California will get priority attention in store remodels, because changes in those markets have the opportunity to have the greatest impact, he added.
Noddle said the company was also prioritizing changes to its pricing structure in various markets, though he declined to say which markets or banners would receive changes.
"We have taken time to look at the pricing and competitive position at all of the banners, and we know there are some markets where changes are needed," he said. "That is not something we would do on Day One, but that we would migrate to over time. We have prioritized some changes we'd like to make, but they will come in the months and years ahead."
He emphasized that the market would dictate any changes, adding that Supervalu is comfortable operating multiple pricing strategies.
"We don't think there's one price answer to all of the markets we operate in," he said. "We are very attuned to what is right in each market, not only in pricing, but in marketing and merchandising."
Supervalu has plans to roll out its limited assortment Save-a-Lot stores through corporate and licensed operators in the Northwest, as well as in Mexican border towns in Texas and California, Noddle said. The company is examining the possibility of adding Save-a-Lot stores in Mexico, he added.