Supervalu makes changes to its board of directors
MINNEAPOLIS One of the nation’s largest supermarket changes is changing the size and composition of its board of directors.
Supervalu said it’s scaling back its board from 15 to 12 directors but will bring in two new board members (at its annual meeting) to enhance its oversight of the company: Matthew Rubel, president, chairman and CEO of Collective Brands Inc. (owner of Payless ShoeSource), and Donald Chappel, SVP and CFO of The Williams Cos., an energy transmission company. Additionally, the chain is expected to name Wayne Sales, retired vice chairman of Canadian Tire Corp. as its nonexecutive chairman.
After many years of distinguished service, five board members are leaving the company. Following his 2009 retirement announcement, Jeff Noddle, current chairman of the board and former Supervalu CEO, will be retiring effective at the company’s annual meeting in June 2010. Lawrence A. Del Santo, who has been a director since 1997 and lead director since 2006; and Garnett L. Keith, Jr., are also retiring from the board effective at the annual meeting. In addition, A. Gary Ames and Marissa T. Peterson, whose terms would expire in 2011, voluntarily resigned from the board effective April 14.
Sales stated, “The board is grateful for the leadership that Jeff and Larry have provided, and the important contributions of all of our directors. These include, most recently, their execution of a successful transition to new leadership under Craig Herkert, the guidance they have provided to help Supervalu navigate through the recent economic environment while maintaining its focus on long-term value creation, and their dedication to the highest standards of board governance.”
Pushing through stunted sales with Rx, health
For many years, Kmart has played second or even third fiddle to fellow nationwide mass-merchandise chains Target and Walmart, despite once having been the monarch of mass merchandising in the United States.
The chain was a relative bright spot amid the woes of parent company Sears Holdings in 2009, as comparable-store sales increased by 1.7% in the fourth quarter. But Kmart still had its share of problems, largely due to the economic recession. In the second, third and fourth quarters of fiscal 2009, Sears Holdings announced the closures of 43 Kmart stores. The company also announced that it would shut down five Sears Essentials and Sears Grand stores. Sears Essentials is a mass-merchandise pharmacy concept similar to Kmart, while Sears Grand combines the mass-merchandise aspects of Sears Essentials and Kmart with the traditional Sears department store format.
For the year, revenues for merchandise sales and services for Kmart were $15.7 billion, compared with $16.2 billion in 2008. Sales for Sears Holdings were $44 billion, compared with $46.8 billion in 2008. Sears Holdings’ fourth-quarter 2009 profits were $430 million, compared with $190 million in fourth-quarter 2008, while profits for the year were $235 million, compared with $53 million in 2008. The smaller full-year numbers were due to large quarterly losses in 2008 and 2009 that offset profits for the years as a whole. The company said Kmart’s gains largely were driven by increased sales in toys and home products, but were offset by declines in clothing sales.
Headquarters: Hoffman Estates, III. 2009 sales: $15.7 billion % change vs. 2008: -3%No. of stores: 1,327No. of stores with Rx: 1,021Avg. store size: 93,000 sq. ft.Rx sales: $2.5 billion% of sales from Rx: 16%Sales per store: $11.8 million
Source: Company reports, Drug Store News
But despite its problems in the sales arena, Kmart has created several health and pharmacy initiatives at its stores. In May 2009, the store in Rehoboth Beach, Del., opened the chain’s first retail clinic under a partnership with the Beebe Health Center. The clinic includes two exam rooms and is staffed by a nurse practitioner, as well as an on-call physician. In June 2009, the chain introduced the Smart Assist Savings Card for unemployed residents in Michigan, providing discounts of 20% on more than 1,200 private-label pharmacy and grocery products for up to six months. And in July 2009, Kmart launched a prescription drug savings club, charging a $10 enrollment fee for eligible members in exchange for $10 gift cards and $100 gift cards for customers who transferred four prescriptions to the store.
Supermarket shows Rx southern hospitality
The 151-unit Brookshire Grocery chain added and upgraded pharmacy operations at stores throughout its market area in 2009. Among its initiatives, which also included informational health-and-wellness expos, the chain added a free antibiotic and discount generic drug program last year.
“Our generic program includes more than 400 drugs,” company spokesman Sam Lanier noted. “We have 30-, 60- and 90-day supplies—based on usual day’s supply—for $3.99, $6.99 and $9.99, respectively. There are about 50 entries on our Free Antibiotics Program, which includes varying strengths of about a dozen or so antibiotics.”
In early October 2009, Brookshire opened up a brand new, 31,000-sq.-ft. store in Seagoville, Texas, that provided enough space for a pharmacy operation. A few weeks later, Brookshire celebrated a grand reopening of its store in Forney, Texas. Beyond an additional 2,200 sq. ft., the store also gained an upgraded pharmacy drive-through.
In June 2009, Brookshire debuted a newly remodeled 62,000-sq.-ft. Super 1 Foods store in Lafayette, La., offering an expanded pharmacy relocated to the front of the store. The new configuration provided for a wider selection of health-and-beauty products, and established sections devoted to diabetes, sleep and therapeutic aids and supplies. It also added drop-off and checkout areas to pharmacy; additional office space for health services and consultations; and durable medical equipment, a category not often offered in supermarket pharmacies.
In January 2009, the company renovated a 38,500-sq.-ft. store in Shreveport, expanding the pharmacy operation and adding a drive-through.
Brookshire’s commitment to expanding pharmacy was evident in the launch of a new concept store—Fresh by Brookshire’s, a 55,000-sq.-ft. supermarket, opened in south Tyler, Texas, on Feb. 16. The new format was developed for shoppers with a taste for gourmet food, but also houses an expansive selection of wellness items and a full-line pharmacy.
Headquarters: Tyler, Texas2009 sales: $2.12 billion% change vs. 2008: -3.6%No. of stores: 151No. of stores with Rx: 112Avg. store size: 40,000 sq. ft.Rx sales: $296.8 million% of sales from Rx: 14.0%Sales per store: $14 millionSource: Company reports