Supervalu 2Q Profit Falls 14%
Portland, Ore. Supervalu Inc. reported that its profit for its second quarter ended Sept. 6, fell 14% to $128 million.
While Supervalu said it has not seen traffic drop, sales rose less than 1% to $10.23 billion from $10.16 billion. The company reported a 1.3% drop in same-store sales.
Supervalu said it took a hit to profit by not passing on higher prices charged by food makers to cover ingredient costs. Supervalu spokeswoman Jean Giese told the Associated Press that the ailing economy and consumers' desire for value led the company to try to keep prices lower and to offer more promotions in some markets. That promotional spending also cut into profits.
The company also took a hit with higher fuel, utility and other operating costs.
"We all know it is a difficult environment and one of the most challenging operating climates we have seen in a long time," said Jeff Noddle, chairman and CEO of Supervalu. "We cannot blame external forces alone for our results. We did not execute well on several fronts."
However, Noddle has already seen store sales improve and the company is taking several steps to cut costs.
He also noted that some of its brands, such as discount grocer Save-A-Lot is "one of the best positioned of any food retailer to serve economically distressed consumers" and was optimistic about sales there.
The 115,000-sq.-ft. store will serve as an anchor tenant for The Village at Fairview shopping center.