Albertsons 2004 Annual Report Download - page 9

drug store that includes a pharmacy. A typical supermarket carries approximately 32,000 items and generally
ranges in size from 30,000 to 65,000 square feet with an average size of approximately 50,000 square feet.
At fiscal year end, the company operated 59 supermarkets under the Farm Fresh, Scott’s and Hornbacher’s
banners. The Farm Fresh stores operate primarily in the Virginia Beach, Virginia market; the Scott’s stores
operate in the Fort Wayne, Indiana market; and the Hornbacher’s stores operate in the Fargo, North Dakota
market. In-store pharmacies are operated in 29 of the supermarkets.
Food Distribution Operations
Overview. SUPERVALU provides logistics and service solutions to retailers for food and non-food
products and is the largest public company food wholesaler in the nation. At February 28, 2004, the company
was affiliated with approximately 2,470 stores as their primary supplier, excluding the company’s own regional
banner store network, and approximately 660 additional stores as a secondary supplier. SUPERVALU’s
customers include single and multiple grocery store independent operators, regional and national chains, mass
merchants and the military. Such customers are located in 48 states, and range in size from small convenience
stores to 200,000 square foot supercenters.
Products Supplied. The company offers and supplies its distribution customers with a wide variety and
selection of food and non-food products, including groceries, meats, dairy products, frozen foods, deli, bakery,
fresh fruits and vegetables, health and beauty aids, general merchandise, seasonal items and tobacco products.
Such products include national and regional brands, the company’s own lines of private label products and the
private label products of its independent customers. The company has no significant long-term purchase
obligations and considers that it has adequate and alternative sources of supply for most of its purchased
products.
SUPERVALU offers two tiers of private label products to its customers: first quality products under such
private labels as CUB, FLAVORITE, HOMEBEST, IGA, RICHFOOD, SHOP ’N SAVE, SUPERCHILL,
HEALTHY GENERATIONS, DAILY SOURCE, NUTRIPLAN and CHEF’S CIRCLE; and economy products
under the private label of SHOPPERS VALUE. SUPERVALU supplies private label merchandise over a broad
range of products in the majority of departments in the store. These products are produced to the company’s
specifications by many suppliers.
Logistics Network. The company has established a network of strategically located distribution centers
utilizing a multi-tiered logistics system. The network includes facilities that carry slow turn or fast turn groceries,
perishables, general merchandise and health and beauty care products. The network comprises 24 distribution
facilities. The company believes that its multi-tiered distribution network increases buying scale, improves
operating efficiencies and lowers costs of operations. The company is continuing to work on business initiatives
that will deliver lower costs of operations. Deliveries to retail stores are made from the company’s distribution
centers by company-owned trucks, third party independent trucking companies or customer-owned trucks. In
addition, many types of meats, dairy products, bakery and other products purchased from the company are
delivered directly by suppliers to retail stores under programs established by the company.
The company also offers third party logistics solutions, primarily to the grocery industry, through its
Advantage Logistics operation which was formed in 2002.
Trademarks
The company offers some customers the opportunity to franchise a concept or license a service mark. This
program helps the customer compete by providing, as part of the franchise or license program, a complete
business concept, group advertising, private label products and other benefits. The company is the franchisor or
licensor of certain service marks such as CUB FOODS, SAVE-A-LOT, DEAL$ NOTHING OVER A DOLLAR,
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