Launch of New Natural and Organic Format Leverages SUPERVALU's Expertise in Small-Box Retailing, Produce Procurement and Private Label Products
MINNEAPOLIS, Oct. 19 /PRNewswire-FirstCall/ -- SUPERVALU (NYSE: SVU) announced today its plans to enter the growing natural and organic foods market with the launch of Sunflower(R) Market, a value-priced organic foods retail outlet. The first Sunflower Market is scheduled to open in Indianapolis in January 2006.
The company announced the new retail format today at its 2005 Investor Conference. In addition, SUPERVALU updated its same store sales guidance for corporate-owned Save-A-Lot stores. The company now expects positive same- store-sales comparisons for the remainder of the year.
Sunflower Market is SUPERVALU's response to the rapidly growing market for natural and organic foods in the U.S. According to SUPERVALU's consumer research, 96 percent of consumers use fresh organic produce at least occasionally. Research also indicates that while 66 percent of the U.S. population seeks organic products that offer nutritional, appetizing solutions for themselves and their families, the cost of organic foods is the most common obstacle for consumers.
"Operating retail grocery chains in the top markets throughout the U.S. gives us a unique perspective into consumer preferences," said Jeff Noddle, SUPERVALU's chairman and CEO. "Across the nation, we are seeing a growing demand for affordable organic foods with exceptional taste and nutritional quality. Sunflower Market draws on our expertise in small-box formats, and leverages our supply chain expertise, which enables us to deliver outstanding natural and organic products at a price point consistent with consumer expectations."
"At Sunflower Market, we will offer customers the convenience of a full shopping experience, with access to natural and organic products in all categories," said John Hooley, president of corporate retail for SUPERVALU. "We've developed a unique merchandising approach that will highlight our perishables, which include an extensive produce offering, natural, case-ready meats and fresh bakery and deli items. Simply put, our goal is to provide customers with great tasting, wholesome foods at affordable prices."
SUPERVALU brings 135 years of grocery retail and supply chain experience to the launch of Sunflower Market. With the Sunflower Market format, SUPERVALU is leveraging its experience in operating its successful Save-A-Lot chain, which is known for its targeted approach, small-box design and limited assortment strategy. Sunflower Market's typical footprint is expected to range from 12,000 to 15,000 square feet, and the banner will stock from 8,000 to 12,000 store keeping units (SKUs) of natural and organic products. All Sunflower Market stores will be operated by SUPERVALU.
In addition, with its significant range of capabilities, SUPERVALU has the ability to develop and launch its new banner, as well as source a large percentage of Sunflower Market's produce through W. Newell & Co., SUPERVALU's specialty produce company. Additionally, over 100 private label items, marketed under the newly launched "Nature's Best" brand, will be deployed through SUPERVALU warehouses, and Sunflower Market will utilize SUPERVALU's standardized information technology backbone for merchandising systems, store systems and operations support.
Sunflower Market will offer value-priced products of the highest quality available: organic wherever possible, minimally processed, with no artificial colorings, sweeteners, flavors or preservatives. The stores will contain: grocery, frozen and dairy departments; produce and bulk foods; deli and cheese; all-natural bakery and café; hormone- and antibiotic-free meat and seafood; beer and wine; and wellness departments.
Sunflower Market will serve an ever-increasing segment of the American market with significant growth potential in coming years. According to a report by independent market research firm, Packaged Facts, "The market for organic foods and beverages is growing eight times as fast as the conventional food market and is expected to generate sales of $32.3 billion by 2009."
To leverage the new Nature's Best brand, SUPERVALU will make this private label program available to its corporately owned and operated retail banners as well as to the nearly 2,200 independent retailers to which SUPERVALU is a primary distributor.
A replay of SUPERVALU's investor meeting is available at the company's website, http://www.supervalu.com .
Sunflower(R) is a registered trademark of SUPERVALU that dates back to 1959.
About SUPERVALU INC.:
Celebrating its 135th year of fresh thinking, SUPERVALU INC., a Fortune 500 company, is one of the largest companies in the United States grocery channel. With annual revenues of approximately $20 billion, SUPERVALU holds leading market share positions across the U.S. with its 1,553 retail grocery locations, including licensed Save-A-Lot locations. With its Save-A-Lot format, the company holds the number one market position in the extreme value grocery retail sector. Through SUPERVALU's geographically diverse supply chain network, the company provides distribution and related logistics support services to grocery retailers across the nation. In addition, SUPERVALU's third-party logistics business provides end-to-end supply chain management solutions that deliver value for manufacturers, consumer products retailers and food service customers. SUPERVALU currently has approximately 57,000 employees. For more information about SUPERVALU visit http://www.supervalu.com .
The statements contained in this news release that are not historical fact are forward-looking statements and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Certain important factors could cause results to differ materially from those anticipated by such forward-looking statements, including the company's ability to dispose of its Pittsburgh stores as planned, the impact of natural disasters on local and regional markets, transportation systems and the company's customers, the impact of competition, the nature and extent of the consolidation of the retail food and food distribution industries, the ability to attract and retain customers for the company's supply chain services operations and to control food distribution costs, the ability of the company to grow through acquisitions and assimilate the acquired entities, increases in employee benefit costs, potential work disruptions from labor disputes or national emergencies, the availability of favorable credit and trade terms, food and fuel price changes, general economic or political conditions that affect consumer buying habits generally or war-time activities, threats or general acts of terror directed at the food industry that affect consumer behavior, other risk factors inherent in the supply chain services business and retail businesses, and other factors discussed from time to time in reports filed by the company with the Securities and Exchange Commission.