Jeff Noddle

The challenge facing Jeff Noddle, chairman and chief executive officer of Supervalu, is not only to transform the multifaceted company to more like a retailer than the wholesaler it has been for most of its history, but also to make it behave more like a single retail chain operating nationwide.

The company took a big step in that direction in the past year when it consolidated its merchandising and marketing operations, combining much of those functions from the Albertsons stores it acquired in 2006 with its legacy operations in Minneapolis.

“We began migrating our merchandising and marketing teams into a central location, although we are going to have a balance between doing some things centrally and being what we call locally relevant in our operating businesses,” Noddle told SN.

The company opened a new “innovation center” dedicated to those functions in Minneapolis, in a building that previously housed the headquarters of electronics retailer Best Buy. The center, complete with test kitchens and staffed by about 400 workers, will seek to leverage technology to optimize the company’s product selection and promotions across the range of its disparate operations.

Among the key initiatives has been the effort to streamline the various private-label lines that Supervalu offers and to boost the overall sales of private label. The company took a big step in that direction with the launch in April of 150 natural and organic items under the Wild Harvest line. Additional lines are set to follow later this year.

Chuck Cerankosky, an analyst with FTN Midwest, Cleveland, said Noddle saw the potential to transform Supervalu and build a company that would be better positioned for the long term when it acquired the Albertsons business.

“I think Jeff very early realized — maybe as soon as he became CEO — that with the consolidation of the retail food industry, being a great wholesaler was not going to carry Supervalu forward forever,” he said. “They had to make a much bigger investment in food retailing than just acquiring the occasional customer.”

Noddle, Cerankosky pointed out, was “astute enough to buy the best” Albertsons locations that were available, “not the whole company.”

Supervalu has lagged behind its peers in terms of same-store sales growth, but Noddle sees the merchandising efforts and the company’s “Premium Fresh and Healthy” remodeling program as antidotes to the top-line sluggishness.

The remodeling effort, which it plans to apply to about 165 stores this year, seeks to create a set of offerings that are customized for individual markets.

“We know that our highest priority is to improve likestore sales, we’ve got to get the remodels finished, we’ve got to get the marketing and merchandising migration in place, we’ve got to finish our own brands’ private-label work,” Noddle said. “At the same time, we are building a marketing organization that will give us a whole range of analytics and analysis that we think, to be a large retailer, you need today.”

— MARK HAMSTRA