Save-A-Lot to Double Store Count

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April 12, 2011

Seeing tremendous upside potential for its Save-A-Lot limited assortment chain, Minneapolis-based Supervalu plans to double the banner’s store count over the next four years

By 2015, the grocer plans to have 2,400 Save-A-Lot locations, Bill Shaner, president and CEO of Save-A-Lot, told Supermarket News.

“The economy certainly has consumers looking for value, and certainly we are well positioned to deliver on that value, and that is a big reason Supervalu is looking at Save-A-Lot as a growth vehicle,” Shaner said. “Right now the hard-discount format is kind of underdeveloped in the U.S. — there's Save-A-Lot and Aldi and a handful of other smaller chains, and then the dollar stores — but compared to Europe, and South America, hard discount is under-penetrated. Now is the opportunity to build market share, get a brand established, and be the first mover.”

Through aggressive leadership from Supervalu CEO Craig Herkert, Save-A-Lot has accelerated expansion through co-branding arrangements with Rite Aid in 10 stores in South Carolina and “a Hispanic-oriented operator in Texas,” according to the report.

“He [Herkert] has been very bullish about Save-A-Lot, and he has worked hard to free up the capital that we need to grow — not only for the store growth, but also the infrastructure growth, because we are going to have to think differently and act differently,” Shaner said. “We have to look at our organizational structure, and we have had to look at our processes, and the things that we need to do to get to that next level of growth and ultimately double the size of the company.”

Save-A-Lot stores typically carry 80 percent private label products, leaving the balance of the product mix to be determined by the local markets.

Save-A-lot forecasts substantial growth opportunity in California, where is currently does not have stores, and Texas and Florida where it hopes to open 100-plus stores in each state before 2015. In Oregon and Washington it expects to open between 50 and 100 stores each, according to the Save-A-Lot web site.

So far the ratio of corporate-owned Save-A-Lot stores to licensees have been evenly split, but in the future Shaner said the company will rely more on licensees for future growth, especially in smaller markets.

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