Supervalu to End Relationship With Daymon

JULIE GALLAGHER

MINNEAPOLIS — A week after Safeway announced it would part ways with Daymon Worldwide and bring its corporate-brand-building responsibilities in-house, Supervalu confirmed it will do the same, effective May 14.

“An increase in our Own Brands sales is a key component of our growth strategy,” said Haley Marconett, spokeswoman for Supervalu. “As such, we recently realigned our Own Brands teams to work more closely with our merchandising and marketing teams.”

Supervalu will manage its private-label product development and assortment, pricing, and placement and promotions internally, according to Marconett. The retailers' actions, according to the Daymon, are not related, as they compete in different markets under different business models. Safeway will end its relationship with Daymon on May 28.

“Over the past six years at Supervalu and five years at Safeway, we have helped them launch their new portfolio of brands and grow their [private-brand] penetration steadily over time,” said Alex Miller, chief executive officer of Daymon. “We are proud of the work we did at both of these companies and value our long-standing partnership. We hope to continue to work with them in a new capacity.”

Daymon will continue to operate off-site satellite offices in both regions to cater to its supplier partners, Miller said.

Safeway’s decision didn’t likely influence Supervalu’s since both retailers’ plans were probably in the works months ago, said Jim Hertel, managing director of Willard Bishop, Barrington, Ill. Still, the timing of their announcements could influence other private-brand marketers, he said.

“This is probably the kind of thing that would make some other retailers sit up and think hard about why this is happening,” he said. “This could turn out to be a trend.”

Last week Safeway announced plans to create a new program called Safeway Direct Connect to facilitate the ability of suppliers "to work directly with the chain to grow our business together," spokesman Brian Dowling said. "The new model is designed to accelerate the growth of Safeway's consumer brands business."

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