Albertsons 2002 Annual Report Download - page 5

Our progress during the year is best illustrated by the enormous
accomplishments across the network. Throughout the year, we:
Closed distribution centers equaling approximately 3.5 million
square feet for a total square footage reduction of 15 percent
Reconfigured 13 of our remaining 30 distribution centers to
improve volume throughput across the network by separating
fast-moving from slow-moving merchandise
Reduced inventory days on hand by two full days
Generated new business with an annualized run rate of approx-
imately $500 million.
In addition, we unwound significant sales volume totaling
approximately $2.5 billion, primarily as a result of our January
2001 decision to exit our relationship with Kmart. The simultane-
ous restructuring and rationalization of our network delivered
strong results. Our ability to execute our business plan with
speed and success was a testament to our focus, caliber of
employees and business expertise.
Redirecting our sizable volume through a newly reconfigured
multi-tier distribution network delivered inventory management
benefits, product flow improvements, transportation savings
and overall supply chain efficiencies. We remain committed to
providing the best service at competitive costs to our customers
that span almost 5,000 locations nationwide.
The Future
SUPERVALU is a stronger, more efficient Company today than
just a year ago. We are well-positioned for the future.
By adapting our business plans, leveraging our core compe-
tencies in retailing and distribution, and applying a risk-adjusted
financial discipline, SUPERVALU will make progress toward its
financial goals while seamlessly serving thousands of customers
across the country.
We have already entered Fiscal 2003 on solid ground. The
recently announced acquisition of Deal$ – Nothing over a Dollar, a
45-store general merchandise single price point retailer, represents
the next phase of growth for Save-A-Lot. The transaction is
scheduled to close this May. We will be finalizing a new combina-
tion store prototype that will offer Save-A-Lot’s top quality custom
food brands as well as a variety of single price point general mer-
chandise. We will continue to expand our retail store base with
approximately 150 new Save-A-Lot stores and 10 to 15 price
superstores or supermarkets. In addition, we will continue to
implement efficiency initiatives in distribution that drive both
financial performance and customer benefits, as well as provide
long-term sales opportunities.
I am proud to be leading SUPERVALU and its exceptional
workforce of talented employees at an exciting time in our history.
We remain committed to keeping SUPERVALU a preferred busi-
ness partner and a solid investment.
Jeff Noddle
President and Chief Executive Officer
3
years ago is now complete; and after 25 years as a SUPERVALU director
and 20 years as CEO, it is time for me to hang up my “grocer’s apron.”
When I joined SUPERVALU 25 years ago, food wholesaling was in its
golden era and the family-owned supermarket operators controlled more
than 50 percent of the total U.S. grocery market. At that time, 75 percent
of our total sales came from food wholesaling, and the balance from retail
general merchandising (Shopko) and casual wear stores (County Seat).
Today SUPERVALU is almost exclusively in the food business. We con-
tinue as the best and largest food distributor to independently owned
supermarkets and supermarket chains. Much has changed over the past
10 years. Probably most important to the industry has been the tremen-
dous consolidation in the past 10 to 12 years with the top 10 chains
now controlling almost 65 percent of the total U.S. grocery market.
As the market has changed, so has SUPERVALU. Today, we continue
to be the leading food distributor to independently owned supermarkets
and supermarket chains. More importantly, SUPERVALU is the most
efficient and profitable distributor. In addition, we are the 11th largest
supermarket chain in the country and the largest operator of extreme
value food supermarkets with Save-A-Lot owned and licensed stores.
So as I end my career at SUPERVALU, I just want to express my
sincere thanks and appreciation to all 57,800 SUPERVALU employees,
our talented management team, the board of directors and stakeholders
for the support they have given me over the years and for the opportunity
to serve this great corporation and its customers.
Mike Wright
Chairman