As its sales woes continue, Acme Markets announced that effective May 7, it had laid off about 900 of the 14,000 employees at its 117 stores in the region. Approximately two-thirds of the jobs that have been eliminated occurred at stores in Southeastern Pennsylvania and Southern New Jersey.
The layoffs involve only part-time associates, mostly those who work 12 to 16 hours a week on nights and weekends. Those clerks and meatcutters work in the deli, seafood, and meat departments. Other staffers affected shelf stockers, grocery baggers and cashiers.
According to an April 28 letter sent by Acme Markets to several United Food and Commercial Workers local unions, the Malvern, PA based unit of Supervalu said the job riffs are a result of a turnaround plan that began last year. The letter states that while the company is starting to see improvements in some areas, it needs to make additional adjustments so that it moves closer to its goal of restoring Acme Markets to financial stability and positioning the business for the future.
Acme noted the potential success of its turnaround plan rests on the premise that the retailer is capable of realizing maximum potential by focusing on neighborhood targets with differentiated go-to-market value proposition.
The letter also states Acme Markets has made progress toward its plan by cutting expenses by $35 million and reducing prices on many known value items and categories in its stores. However, apparently not enough progress has been made to date because the chain noted that it still faces significant sales challenges.
In a nutshell, Acme has too many associates to serve the business, and said it must take immediate action to align the workforce that it needs with sales that it currently has. The unit of Supervalu noted that the added the reduction in its workforce does not change its commitment to drive sales and invest in improvements in the customer experience, including lower prices and enhanced customer services. According to the letter, in the coming weeks and months, Acme will continue to execute its plan to improve business by examining additional ways to increase sales, attract new customers and realign operations to ensure the company’s competitiveness and long-term survival.
In other Supervalu news, the Eden Prairie, MD retailer/wholesaler announced on May 12 that Santiago Roces will be the new CEO and president for Save-A-Lot, Supervalu’s extreme value retailer based in Earth City, MO. Roces was named to the position after most recently serving as senior vice president and general manager of Wal-Mart’s small format division.
Roces, 48, replaces Bill Shaner, who has led Save-A-Lot since 2006 and helped the discount retailer become a prime star within the struggling Supervalu organization.
“We wish Bill well in all his future endeavors and appreciate his commitment to Supervalu for the past 27 years and more recently his leadership and guidance as we laid out an aggressive growth strategy for Save-A-Lot,” said CEO Craig Herkert.
“Santiago is a nice fit for our company and for Save-A-Lot,” Herkert noted. “We believe he is the right individual to lead this organization forward and to help ensure we realize the aggressive growth plans that have been established. I am very pleased that Roces has joined our team. He is a very talented leader with a wonderfully diverse business background. His leadership, energy, and enthusiasm will be critical as we continue our journey to open more than a 1,000 Save-A-Lot stores in the next several years.”
Prior to becoming Wal-Mart’s senior vice president of its small format division, Roces held a variety of leadership positions at Wal-Mart including senior vice president of new business development and customer experience, president & CEO of Wal-Mart Korea, and chief merchandising officer of Wal-Mart Argentina. In addition to Wal-Mart, he has held leadership positions at PepsiCo and Carrefour. Roces also has demonstrated leadership in driving private brands penetration and customer acceptance, a critical part of the Save-A-Lot business model with nearly 80 percent of its products packaged under private label.
In another piece of Supervalu news, the company held its “investor day” with its financial analysts on May 3 at corporate headquarters in Eden Prairie. The meeting provided an update on its strategic plant to deliver profitable growth in the future for shareholders.
As it noted in its recent fourth quarter earnings release and follow-up conference call, Supervalu said it is investing in and deploying new tools and capabilities to support its variety of owned and licensed formats and the many different independent grocers through which consumers are served.
At the meeting, Supervalu’s senior management team outlined key initiatives the company is undertaking to reverse sales declines at its traditional retail banners and get them back on the path to growth. Supervalu said the efforts underway include sharpening the traditional retail banners’ value proposition through a fair everyday pricing plus promotion strategy, enhancing fresh offerings, developing and maintaining a portfolio of private brand products that differentiate its retail outlets from its competition and provide more competitive value for customers, better matching store assortment and format to the needs of each neighborhood and providing a more hassle-free experience both in-store and on-line.
Supervalu said it also plans to expand its Shoppers Value entry price-point private brand line and will be launching or relaunching 80 new items in the coming months.
Also discussed were the expansion efforts of Save-A-Lot which included adding 160 new stores in fiscal 2012, with a goal of building a network of more than 2,400 stores by 2015.
Currently, the Save-A-Lot portfolio includes a blend of 30 percent corporately-owned and 70 percent licensee-operated stores. Supervalu said this multiple-ownership model supports its aggressive growth strategy, while helping it conserve capital.
Supervalu, which has consistently posted some of the poorest identical store sales in the industry over the past four years, also outlined its plans to grow its wholesale distribution business (supply chain). Part of that effort will come through continued development and deployment of new value-added services to support its independent retailers while at the same time better leveraging the scale of the entire store network.