Albertsons 2009 Annual Report Download - page 3

Dear SUPERVALU Shareholders,
Jeff Noddle
Chairman &
Chief Executive Officer
This past year has been incredibly challenging for our economy. Consumers are facing
more pressure today than at any time in recent memory – falling home values, limited
access to credit, steep declines in the financial markets, and more recently, rising
unemployment – all of which are prompting unprecedented government action to
stimulate the economy. There will be a rebound, but it is difficult to predict when that
will occur.
Financial Highlights
In fiscal 2009, SUPERVALU’s net sales increased $516 million, or 1.2 percent, to
$44.6 billion for the year. Excluding the 53rd week, net sales were down slightly. Adjusted
net earnings for the 53-week year were $2.89 per diluted share, excluding impairment and
other non-operating charges, compared to $2.97 per diluted share last year.
This past year, we continued to invest in the business as well as strengthen our balance sheet. Our
approximately $1.2 billion in capital spending in fiscal 2009 brings total capital spending since the Albertsons
acquisition to more than $3.0 billion. Additionally, our $350 million in debt reduction means we have paid off
more than $1.0 billion in borrowings since the acquisition.
Key Business Initiatives and Milestones
We remain committed to taking the necessary steps to position SUPERVALU for improved operational and
financial performance. In that regard, let me address fiscal 2010, the year we will complete our center-led
merchandising and marketing organization, which is foundational to achieving sustainable long-term growth in
sales and earnings.
Today, these organizations are in place and we have transitioned ACME to this new model. We are in the
process of transitioning additional banners, proceeding at a pace that allows us to make any necessary
adjustments along the way. We believe the conversion will be complete by the end of fiscal 2010 and is a
critical element in our efforts to create an organization that is both nationally focused and locally relevant.
Going forward, our merchants in Minneapolis will ensure we are leveraging our size and scale for the core
products offered in our stores, while banner merchants will be responsible for items that address regional taste
and brand preferences.
We are also making great strides in marketing. We have accumulated a wealth of customer data that we are
just beginning to analyze to better meet our customers’ needs and desires. Our in-house marketing, research
and analytics groups are partnering with a third party, with vast experience in consumer data analytics, to
better understand customer buying patterns and behaviors. The insights provided will help us improve how we
communicate with our best customers, promote our stores, and decide upon product assortment and placement
as well as develop more effective marketing tools and customer incentives to drive top- and bottom-line
performance.
Using these skills, we launched our first enterprise-wide advertising campaign. Entitled “Good Things are Just
Around the Corner” this theme ties together key concepts that resonate with today’s consumer – we are their
neighborhood grocery store with the products they need and want, and we are ready to be their partners in
creating meals that are convenient, healthful and right for their families. We are pleased with the excitement
this campaign has generated with customers and our associates alike.
We are also making significant progress in providing more innovative offerings. During fiscal 2009 we
launched two mega-brands – WILD HARVEST and CULINARY CIRCLE – both achieving results well above
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