Supervalu has announced that both group profit and net sales fell during the first quarter of fiscal 2009/10, as the company toughed out the economic crisis.
Group profit during the three-month period fell 30 per cent, the retailer reported, down to US$113m (or US$0.53 per share) from US$162m (US$0.76 per share) in the corresponding period of 2008.
Year-on-year net sales dropped 5 per cent to US$12.7bn, Supervalu said, with retail food sales down 4.3 per cent to US$9.9bn from US$10.3bn last year.
'As we noted in our press release of 24 June, our first quarter results reflected the continuing difficult economic environment as well as investments we are making in price and higher levels of promotional spending,' said group CEO Craig Herkert. 'As a result, sales and margins in the first quarter were weaker than originally expected. We anticipate no near-term changes in consumer spending patterns and we will operate our business accordingly.'
During the quarter, the company completed 17 major store remodels, two minor remodels and opened one new traditional store, with capital spending totalling US$238m.
'As I proceed with my comprehensive review of the company's operations and support functions, which has taken me to a number of locations in my first two months, I continue to be impressed with our asset base, associates and independent retailers,' Mr Herkert added. 'It's exciting to return to the grocery retailer where I began my career 30 years ago and I look forward to working with our fine team to realise Supervalu's great potential.'
Meanwhile, the group expects to raise around US$150m through the sale of 36 Albertsons stores in Utah to Associated Food Stores later in the year.
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