US supermarket operator Supervalu, the third largest in the US, has announced a major drop in profit for the first fiscal quarter of the year.
The group revealed that its net earnings fell 45 per cent on a year-on-year basis, down to US$41m from US$74m last year, while net sales dropped to US$10.6bn from US$11.1bn.
In its financial statement, Supervalu attributed the slump to a drop in identical store sales an aggressive market competition, as well as the 'disposition of majority of our fuel centres'.
CEO and president Craig Herkert noted that the group would remain focused on maintaining its operational and financial strength.
'While our shift to a fair price plus promotion strategy is right forour business, it is essential that we move even more aggressively tolower prices, and anticipate and respond to competitor actions,' he explained. 'Weexpect our business transformation to meet our customers’ demands forgreat quality at lower prices. We intend to do this while remaining profitable,continuing to pay down debt and investing the capital to maintain andenhance our stores and related assets.
'Accordingly, we will be pursuingdeeper and more structural cost savings initiatives. Also, we areadopting more flexible financing facilities, reducing our near-termcapital expenditures and suspending our dividend,' Herkert added.
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