Supervalu Turning Up Volume on National Branding Campaign

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Supervalu Turning Up Volume on National Branding Campaign

Calling on Supervalu's optimistic new national branding campaign -- "Good things are just around the corner" - to set the tone for his keynote presentation at the Morgan Stanley Global Consumer & Retail Conference Tuesday, c.e.o. Jeff Noddle said his company's ongoing efforts to win over "economically stressed consumers" is about to launch in new directions.

Minneapolis-based Supervalu's chairman and chief executive said the new "Just around the corner" national branding initiative is the ideal message to unite the company's disparate retail operations under a common theme, while reinforcing the unique things that make each local banner relevant to its respective markets.

Based on a deep local knowledge and allowing for a customizable message, Noddle said the "Just around the corner" tag line not only highlights each store's familiarity with the local communities it serves, but also conveys the accessibility of its products and services to reinforce to consumers that they have a neighborhood store that strives to understand and provide what they want and need.

Already rolled out to consumers via circulars, national ads and direct mail, Supervalu's new national branding effort will ramp up later this year with local radio and television spots, billboards and in-store signage.

During his talk to investors, Noddle said the optimism he's feeling "comes from the progress we've been making on our strategic progress since closing on the Albertsons acquisition" just two years ago. "Since Day One, we've been committed to improving the in-store experience and investing in our stores to raise the bar on the shopper experience by improving in-store execution," he said.

"Our customers expect and deserve to be impressed every time they shop at our stores," said Noddle, affirming that "our associates are prepared to make this happen. To this end, we are focused on delivering an exceptional shopping experience," by measuring customers' experience via three keys -- speed of checkout, overall store appearance and cleanliness, and friendliness. "And we are making progress. But we recognize that much work remains to be done to reach a standard that will set us apart."

The grocer has been measuring the consumer experience with a "tracking mechanism that provides real time, deep-dive input telling us what our customers want from us and where we can improve," said Noddle, noting that the "actionable items" have resulted in overall improved customer satisfaction scores that provide feedback on quality, selection, in-stock and price.

"This is an ongoing process that will never be finished," he continued. "But we will take the learnings from our customers to make changes to the in-store shopping experience, with the ultimate goal of 100 percent customer satisfaction."

Supervalu's various regional price-impact banners, and especially its extreme value, limited assortment Save-A-Lot stores, "are particularly well positioned to serve today's economically stressed consumers," said Noddle. Still, he acknowledged the company's  "need to be smarter about how and where we invest in price to get the highest return. The current economy has changed consumer purchasing behavior. We are seeing more consumers shopping from lists, we see more using coupons, and we see more trading down to lower cost products.

"Discretionary items, such as floral and cookies, are less frequently finding their way into the basket. Macaroni and cheese is winning over beef at the moment," said Noddle, adding, that "in these challenging economic times, we know we have to be priced right in the categories that people buy everyday; we are doing better at that, and we continue to modify our offerings as we strive to bring value to our customers."

That said, Noddle added his team also knows "there are other points of influence on where a customer shops. Customer service, quality, selection, cleanliness, and friendliness are all factors in the in-store experience that influences the store selection process and customers' overall perception of value. Consumers don't want to feel they're comprising their shopping experience because they are just seeking value. We are taking actions today to improve long term shopping experience," in such ways as investing in its store fleet; improving its house brand penetration; maximizing its national scale with a keen eye on retaining local relevancy; using research and analytics to focus customer-centric marketing; and achieving earnings growth with debt reduction.

In the current fiscal year, Noddle said Supervalu expects its capital spending to be in the $1.2 to $1.3 billion range, "with a significant majority allocated to store capital. As we execute our remodel program, we are constantly looking for innovations with in-store design, format and technology."

Noddle cited the recently opened Urban Fresh by Jewel, a smaller format he said he believes has "significant potential, especially in a market such as Chicago," where real estate is difficult to come by.

Calling the company's ongoing transition to a central-led/locally-focused merchandising organization "a very key transformational step," Noddle also said Supervalu is aggressively seeking to develop stronger vendor partnerships that can be effective in over 2,300 stores and counting.

"This transformation includes implementing the systems that increase our functionality while still enabling us to realize infrastructure synergies by forth quarter 2010."