SUPERVALU understands the lure of a good deal. The company offers wholesale grocery distribution and logistics services to more than 2,000 independent retailers and about 185 military commissaries in the US and overseas. It supplies brand-name and private-label goods in every price range. It also has more than 1,330 owned and licensed Save-A-Lot grocery stores, which hold the #1 spot (by revenue) in the extreme-value grocery category. SUPERVALU's retail operations include nearly 200 regional grocery stores under the Cub Foods, Shoppers Food & Pharmacy, Shop 'n Save, Farm Fresh, Hornbachers, and Rainbow banners. All told, the company covers about 40 states through nearly 20 distribution centers.
The company reports its operations as independent business, retail food, and Save-A-Lot. The largest segment, accounting for 46% of revenue, is the independent business group, or the distribution and logistics operations. It serves more than 2,000 retail customers in 41 states from 17 distribution centers. SUPERVALU's wholesale customers include conventional and upscale supermarkets, combination food and drugstores, supercenters, convenience stores, limited assortment stores, and e-tailers. SUPERVALU offers its retailers private labels in every price range and in virtually every store category, from the value-priced Shoppers Value brand to the premium Preferred Selection and organic Wild Harvest lines. SUPERVALU also offers retailers support services, such as store design and construction.
Retail food, or all the regional grocery stores, includes nearly 200 stores and contributes about 27% of revenue. Save-A-Lot's 1,330+ stores in nearly 40 states make up the rest.
SUPERVALU's headquarters is in Minnesota, most Save-A-Lot stores are in the eastern and southeastern US, and its distribution business serves most of the nation and military commissaries in the US, Puerto Rico, Spain, Cuba, Guam, Korea, and Japan.
After the company overspent for underperforming assets, sold them off, and then reorganized, revenue dropped drastically in 2013. But it has held steady since then and even gained 4% in fiscal 2015 (ended February) to finish at $17.82 billion due to new distribution accounts and higher sales in its other two divisions.
Net income has been up and down the last few years for SUPERVALU, growing significantly in 2014 and then leveling off in 2015 to $192 million due to higher revenue and lower debt.
SUPERVALU is putting its money behind its successful Save-A-Lot format by expanding the extreme-value chain's reach through new store development and growth of its licensee network. Also in 2014 the company streamlined its wholesale organization by consolidating three regions into two, forming new East and West teams located in Virginia and Minnesota, respectively.
Mergers and Acquisitions
After a year of divestments in 2013, SUPERVALU returned to acquisition mode in May 2014 with the purchase of 18 Rainbow Foods stores in the Twin Cities (Minnesota) area from rival Roundy's. SUPERVALU, which was part of a consortium acquiring the stores, will convert about 10 of them to its Cub Foods format.