Albertsons 2010 Annual Report Download - page 3

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Craig R. Herkert
Chief Executive Officer
Dear SUPERVALU Stockholders,
Having spent the first 23 years of my career with Albertsons and American Stores, I was honored to return to
SUPERVALU last May as chief executive officer. This reunion came at a particularly challenging time for the
Company and the millions of Americans we serve each day. Like many retailers in 2009, we faced uncertainty
from the economic environment and were impacted by changing consumer behavior and an intensifying
competitive landscape. Against this backdrop, we still made progress – serving our customers, simplifying our
organizational structure and strengthening partnerships with our vendors, licensees and independent affiliates.
Among our more notable accomplishments this past year:
•Improved financial position. We exceeded our debt reduction target by $150 million to pay down
$850 million in debt during the year. We also put in place a new $1.5 billion credit facility, which ensures
our liquidity for the coming five years.
•Centralized decision-making. The centralization of merchandising and marketing are nearly complete and
banner merchants are now better aligned with our enterprise teams in Minneapolis.
•SKU Rationalization. We began the optimization of product assortments throughout our retail and
wholesale networks. Ten center store categories were completed in fiscal 2010, with the expectation that this
initiative will be completed by the end of fiscal 2011.
•Save-A-Lot. Our unique hard-discount format announced plans to double its size to 2,400 stores by 2016. In
fiscal 2011, Save-A-Lot will open 100 new stores.
•Market exits. We exited the non-strategic retail markets of Salt Lake City, Connecticut and Cincinnati.
•Built executive team. We added several new members to SUPERVALU’s senior leadership. The unique
perspectives these individuals bring positions our Company well for the future.
With all that we accomplished in fiscal 2010, there’s still much to be done. SUPERVALU occupies a unique
position among food retailers. We enjoy the brand recognition of a traditional retailer through our banners, the
solutions expertise and logistics capabilities of a national wholesaler and the value offering of a hard
discounter. This unique blend of strengths and formats has helped SUPERVALU pair its national scale with
local relevance to become “America’s Neighborhood Grocer.” Fiscal 2011 will move us one step closer to this
objective.
As I look into fiscal 2011, SUPERVALU will focus on simplifying the customer experience. We will be visible
in the local communities in which we operate, work in partnership with independent retailers and provide
customers with the services they need to conveniently complete their grocery shopping.
At the core of our Company are the people and communities that we serve. Every day, SUPERVALU provides
millions of families with products and services they depend on through a diverse, nationwide network of more
than 4,300 owned, licensed or affiliated independent stores. Approximately 65 percent of our store network is
operated by small business owners. These entrepreneurs have deep roots in their respective communities and