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    Supervalu’s New Chief: ‘We Will Prove the Naysayers Wrong’

    Memo to company associates outlines four-prong turnaround plan

    Characterizing time as “our biggest enemy" alongside an acknowledgment that “many of our customers and investors have lost confidence and patience with Supervalu,” its new president and CEO, Wayne Sales – who will continue to serve as board chairman – sent an introductory memo to company associates outlining his vision for a turnaround based on a four-prong plan to improve sales, profits and, ostensibly, employee morale.

    After briefly describing his relevant retailing and non-retail background that has included “a variety of difficult situations,” Sales began his memo to Supervalu associates by noting that he shares their sentiments of disappointment with the company’s poor performance in recent years. “I am well aware of what our critics have said about us,” he said. “You are all familiar with our continued decline in sales, profitability and share value.”

    However, Sales continued, “I see a number of similarities between what I find as I join the Supervalu leadership team today and what I found upon joining Canadian Tire, a multibillion-dollar, publicly owned retailer that was anticipating large, fierce competitors who were expanding into Canada. I served as president and CEO of that company from 2000 through 2006. We were faced with high prices, a high cost structure and no defined point of differentiation. But guess what? By all accounts, we were successful. I am here to lead Supervalu forward, and as I step into my new role, I am focused on accelerating our progress in four areas:

    1. We must generate profitable sales. During my tenure on the board, I have met many talented front-line team members who serve customers directly and back-line team members who support and enable the front line. Together, we will take immediate steps to profitably improve sales and create points of sustainable differentiation in the marketplace. This will happen while we continue to roll out long-term price improvements. Our goal is to be competitively priced, and we will move as quickly as possible to achieve this.

    2. We must take significant costs out of the business. Today, we are doing many things that are not business critical, are of low value or are not focused on driving sales or profitability. Tough decisions will be made to change this reality. That said, I promise you we will be acting with the right objectives in mind. We will position ourselves for the future and we won’t take steps that impede our ability to serve customers. Simply stated, we must implement initiatives that take cost out of our business faster than we make our price investments.

    3. We must grow Save-A-Lot. Our go-to-market strategy is unique, and among our greatest assets are our store directors, licensees and independent retailers. We will strengthen our engagement with our Save-A-Lot licensees – leveraging their expertise, enhancing our collective performance, and ensuring our ability to grow a nationwide network of hard discount stores.

    4. We must build on our strong legacy of serving independent retailers. We will work with our independent retailers to reinforce their confidence in our ability to provide the superior service they need to increase sales and profitability.

    “As we go forward, time is our biggest enemy, and we are accountable for the keys to our success. Many of our customers and investors have lost confidence and patience with Supervalu; I know some of you may have, as well. I am excited to be part of the team and you have my personal commitment to do everything I can to ensure our future.

    "Will you join me in this transformation? We will prove the naysayers wrong.”



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