Supervalu outlines steps for growth

CEO prioritizes wholesale client retention and specialty offerings

Dan Orlando | Dec 06, 2017

With or without merger and acquisition activity, Supervalu Inc. has seen what CEO Mark Gross calls “significant” growth in recent months.

Speaking at the Barclays Eat, Sleep, Play conference on Tuesday, Gross said that removing the wholesaler’s October acquisition of Associated Grocers of Florida from the equation left the company with about 11% of organic growth for the last quarter. Before acquiring AG Florida, the company saw a 58% uptick in sales for the segment.

Generating that growth requires prioritizing the retention of existing customers, Gross said. “In the past, Supervalu would have some significant headwinds from some lost customer volume,” he said. “We’ve retained 99.5% of our customers, which is an incredible turnaround.”

Gross added that keeping customers coming back is only half the battle and that the Minneapolis-based company works diligently to understand why some loyal clients only give Supervalu a portion of their business. The company learned that many clients have perimeter wants that need addressing and may be under-informed in regard to private labels.

“It’s really been driving on the fresh side, more produce, more meat,” said Gross. “On the private brand side, it’s really me helping the customers understand what’s available there, how it fits into their local markets, how it will help them win the that local market.”

A part of winning local audiences is supplying the correct specialty and ethnic products, which Gross sees as significant drivers of incremental sales. He said that the company’s recent acquisition of a warehouse in Joliet, Ill., will help make the specialty products available in the Midwest. The AG Florida purchase is designed to do the same for the Southeast.

Gross said that Supervalu also works to inform clients of ways that the company can help them reduce operational costs so that they can focus on being merchants.

While Supervalu’s bread and butter is stocking the shelves of its clients—wholesale currently makes up 72% of sales—it has invested in increasing the experiential components of shopping at its own banners as well. Two areas for this are the additions of in-store juicers and popcorn stations.

“You can never be surprised at people’s desire to have fresh popcorn as a part of their experience,” he said. Gross added that making food shopping fun as well as greeting guests with sensory elements such as a “blast of color” when they enter the produce section or the smell wafting form the bakeries as little details that persuade shoppers to continue visiting.

“Running the retail operations helps us also connect with our wholesale customers and show them different things that we think we are,” said Gross.

Supervalu supplies about 3,330 across the country with the majority being wholesale clients.