Save A Lot Officials Call New Format a 'Major Step Forward'

The Save A Lot chain may have a way to go before reaching its goal of a turnaround, but a new unit that opened near St. Louis last week provides one potential vision for its future.

The company-owned store, which opened Oct. 24 in North St. Louis, was a ground-up build designed to heighten the customer experience while enabling the company to operate more efficiently, Save A Lot officials told WGB. The 17,000-square-foot unit, with about 12,000 square feet of retail space, serves shoppers in the Hamilton Heights neighborhood, which, according to reports, had gone without a local grocery store since a former store at the same site closed in 2016. Save A Lot did not disclose a price for the build.

Photography courtesy of Save A Lot

“This new store represents a major step forward for our company, giving us a simple-to-build, modern and cost-effective design that will be the prototype for our entire network,” Reid Tuenge, SVP of operations for the St. Ann, Mo.-based chain, told WGB. “By considering the needs of both customers and our team members, we’ve created a footprint that makes the shopping experience even more convenient and enjoyable. Combine that with a high-traffic, high-visibility location and our outstanding value, and we know we have a winning combination.”

Tuenge is a former Target executive who joined Save A Lot in 2018 and took on his new operations role in August.

Photograph courtesy Save A Lot

The store was designed to optimize the customer shopping experience, with wider aisles, lower shelves and brighter lighting, officials said. It was also designed to enhance the experience for workers, with a layout offering merchandising flexibility and designed to optimize employee routes through the store.  

Save A Lot said the store also utilizes energy efficiency and sustainability features, including:

Save A Lot is also pursuing other steps to modernize its offering for connected consumers, including e-commerce, sources said. 

Photograph courtesy of Save A Lot

Save A Lot broke ground on the Hamilton Heights store in April of this year. Its look reflects a rebranding rolled out for the first time a year ago and merchandises a private brand portfolio that’s undergone redesigns and reformulations over the past year with an eye on improving quality and value. These changes would appear to make Save A Lot more closely resemble its German hard-discount competitors such as Aldi or Lidl. One difference is Save A Lot’s intent to focus more intently on low-income customer than its rivals might.

The ongoing transformation of the 1,200-plus store chain has been positive, but may require more robust investment to roll out widely. Multibillion growth initiatives by Aldi and Lidl, and subsequent moves among their rivals such as Walmart to meet them on price, have triggered sales and share loss for Sale A Lot, which has also struggled with considerable debt. Those challenges are thought to be behind the reported interest of Save A Lot’s owner, Toronto-based investment group Onex Corp., to seek a sale, new partnership or recapitalization for the brand.

“The company took meaningful steps in the first six months of the year to progress its transformation plan,” Matthew Ross, an Onex executive and Save-A-Lot’s chairman, said in a presentation in August, according to a Sentieo transcript. “That’s obviously underperformed expectations with the major driver being the significant increase in competitive intensity over the last two years in the food retail market—and it continues to ratchet up. So the goalposts have moved materially there, and it’s requiring more and taking longer than expected, but management continues to develop and launch new programs to reposition the company and we continue to support them in those efforts.”

Published reports said Onex has pursued talks with potential strategic and financial partners, including Lidl.