Supervalu First-Quarter Profit Up
Minneapolis Net earnings at Supervalu hit a record $162 million in the first quarter of fiscal 2009, representing a 9% increase over earnings of $148 million in the same period last year. Net sales remained flat at $13.3 billion compared to fiscal 2008.
The positive results were attributed primarily to the company’s supply chain services area, which was up 4.6% from $2.9 billion in 2008 to $3.0 billion this year. Growth in new business, lower-than-normal customer attrition, and the ability to pass along inflationary costs also contributed to the chain’s positive performance.
First-quarter retail food net sales declined 0.7 %, from $10.4 billion in first quarter 2008 to $10.3 billion this year. Supervalu cited soft sales and negative same-store sales (down 0.9%) as key contributors. The company’s footprint remained virtually unchanged, with new store openings offset by the closing of underperforming locations.
In the company’s prepared statement, Jeff Noddle, chairman and CEO said, “While we are pleased with our record results and the continued progress of the Albertsons integration, the ongoing weakness in the economy combined with higher food and energy inflation has created conditions that make us take a more cautious view for the balance of the fiscal year. In light of the macroeconomic environment, we have updated our guidance and are responding with tighter expense controls and other cost-savings activities.”
Supervalu predicts that total net sales for fiscal 2009 will be approximately $45 billion, including an approximate benefit of $800 million from the 53rd week in the fiscal year. Capital spending is projected to be approximately $1.3 billion, which includes 165 major store remodels, approximately 15 new traditional supermarkets and 55 to 65 limited-assortment stores, including 30 licensed stores.
Study: Decrease in back-to-school spending expected
NEW YORK Consumers plan to cut back on back-to-school spending due to higher costs of food and gas. According to a Deloitte survey, 71% of respondents said they plan to spend less on back-to-school items this year. Almost half (48%) plan to reduce their household spending by more than $100.
The survey results indicate that, this year, the vast majority of consumers (88%) will do their back-to-school shopping at discount/value department stores. Almost four in 10 (37%) will shop at dollar stores, and almost one-third (32%) will shop at office supply/computer stores.
Sam’s targets cost-conscious collegiates
BENTONVILLE, Ark. Sam’s Club is now offering students with a valid college ID and collegiate e-mail address a year-long membership for $40 and a $15 gift card to help offset the cost of their first purchase.
In addition, each collegiate membership includes a complimentary add-on card so other students can share the savings.
The new college membership cards, according to Sam’s Club, is its way of addressing concerns about rising costs of education. According to a survey commissioned by Sam’s Club, 66% of Americans felt tuition was the biggest concern as the school year begins. Furthermore, 85% felt that one-stop-shopping at places such as warehouses lead to the greatest savings when purchasing items for college.
“We’ve always had a great relationship with college administrators and many of our clubs serve college towns, this new college specific membership will help us answer the needs of both parents and students, as they return or go to campus for the first time, and to make the most of their budgets,” said Mike Turner, vp of membership at Sam’s Club.