MINNEAPOLIS — Supervalu here plans to invest more effort in the merchandising and development of private-label offerings, Jeff Noddle, chairman and chief executive officer, told shareholders at the company's annual meeting here last week.
“We've completed a review of our own brands, and we see opportunities to significantly reduce and enhance the number of labels,” he said. “We also see opportunities to target additional product categories with our own brands, particularly in the natural and organic area, where national brands don't have sufficient category power.”
According to Noddle, 35% of shoppers' baskets contain some private-label items, “so we have a large opportunity to drive sales with our own brands.”
During the meeting, Noddle also announced a 3% increase in the company's dividend, which will boost the annual payout to 68 cents per share from 66 cents.
Noddle said Supervalu is on schedule to complete the rollout of its warehouse case-handling automation system to its Lancaster, Pa., facility by the end of the fiscal year, as part of its East Coast supply chain optimization program. Supervalu rolled out the system, called T-squared, at its warehouse in Hopkins, Minn., last year, and Noddle said he expects all high-volume grocery items to be shipped later this year to all retailers served by that facility.
The annual meeting was held nine days before this Saturday's anniversary of Supervalu's acquisition of the premier retail operations of Albertsons, Boise, Idaho.
Commenting on that transaction, Noddle said, “We are on schedule with our plan to leverage our transformed business model and deliver continued value to our shareholders, and we are very well positioned for the next stage of growth as we implement initiatives designed to further deliver the economics of the acquisition by leveraging our competencies in both retail and supply chain.”
Pam Knous, executive vice president and chief financial officer, said the company is poised to begin seeing meaningful debt reduction. “Beginning in this year's second quarter, we expect to reduce debt by $400,000 a year,” she said.
