| Type | Subsidiary of Supervalu Inc. |
|---|---|
| Industry | Retail |
| Founded | 1977 |
| Headquarters | Earth City, Missouri |
| Key people | Santiago Roces CEO & President Tom Lenkevich, COO |
| Products | Dairy, deli, frozen foods, general grocery, meat, produce, snacks, liquor, general merchandise |
| Website | save-a-lot.com |
Save-a-Lot is a discount supermarket chain headquartered in Earth City, Missouri, near St. Louis, United States.[1] The subsidiary of Supervalu comprises approximately 1,250 stores in the United States with over $4 billion in annual sales.
While stores carry most typical grocery products, they feature less variety than conventional supermarkets. A typical Save-A-Lot is 15,000 square feet (1,400 m2) with items displayed in their cardboard shipping boxes.
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Save-a-Lot was founded in 1977 by Bill Moran as an alternative to larger supermarkets. He opened the first Save-A-Lot store in Cahokia, Illinois, and remained with the company until his retirement in 2006. Moran oversaw the expansion of his company from the one Cahokia store to more than 1,000 locations across the country. He was succeeded as President and CEO by Bill Shaner, previously COO of Save-A-Lot. Shaner began his career at Save-A-Lot in 1999 after spending 15 years in the operations division at parent company Supervalu. In May 2011, Bill Shaner was replaced as President and CEO of Save-a-Lot by Walmart veteran Santiago Roces, who most recently served as senior vice president and general manager of Walmart's small format division.
In 1978, General Grocer Company expanded the company's presence in the greater St. Louis market. Eventually, the store network grew to 30 stores by the end of the decade. At the root of company's growth strategy is its licensee relationship, in which Save-A-Lot acts as a wholesaler to its independent store owners as opposed to a franchisor. Smaller, independent grocery retailers soon found the limited assortment model to be an effective defensive strategy against the larger chain supermarkets. With help from new licensees, in 1980 alone Save-A-Lot added 50 new locations in the Mid-South region, and a warehouse in Jackson, Tennessee.
In 1983, Save-A-Lot was purchased by St. Louis based food retailer and wholesaler Wetterau Inc, then owner of current sister stores Shop 'n Save.
The next year became the company's biggest in terms of store growth. In 1984, Save-A-Lot purchased 75 similar format Jewel T stores and two distribution centers from Jewel in Florida and Pennsylvania.
In 1994, both the Save-A-Lot and Shop 'n Save banners became wholly owned subsidiaries of Supervalu Inc, one of the largest independent grocery wholesalers and the owners of Cub Foods and Scott's Food & Pharmacy at the time. The acquisition opened up Save-A-Lot's licensee opportunities to conventional Supervalu supplied operators such as Niemann Foods and many others.
Save-A-Lot moved into Southern California with the purchase of 21 discount grocery Sav U Foods stores and a distribution center from the Fleming Companies in late 1996.
In 2002, Save-A-Lot acquired discount variety store chain Deal$: Nothing Over a Dollar with 45 stores in the Midwest. The typical Deal$ store had a slightly smaller footprint than Save-A-Lot and carried mostly non-food merchandise at dollar-increment price points. The Deal$ concept was expanded under Save-A-Lot to 138 stores by 2006.
The acquisition also allowed Save-A-Lot to stock more general merchandise in its grocery stores. The company experimented with hypermarkets which combined the discount grocery and merchandise concepts under one roof. This eventually led to 480 combination stores that did not carry the Deal$ banner.
Four years later, Save-A-Lot sold Deal$ to variety store rival Dollar Tree for $30.5 million plus inventory.[2] Save-A-Lot has reduced the amount of general merchandise in its combination stores and returned them to its grocery-focused model.
In late 2009, newly hired Supervalu CEO Craig Herkert announced the goal to double the Save-A-Lot store network (to 2,400 locations) within five years.[3] The company would open nearly 100 stores in 2010 with a major focus on the Southeastern United States. Save-A-Lot plans to open a new distribution center in Davidson County, North Carolina, in 2011 that will service a portion of the new and existing stores.
Save-A-Lot also entered into a licensing affiliation with notable Hispanic grocer Rafael Ortega to rebrand six former Save-A-Lots in Houston, Texas, and South Texas as "El Ahorro Save-A-Lot".[4] The new stores feature Save-A-Lot product offerings along with more traditional Hispanic staples.
In late 2010, drug store chain Rite Aid became a licensed Save-A-Lot operator when it converted ten of its existing pharmacy locations in the Greenville, South Carolina, market to "Save-A-Lot/Rite Aid" co-branded stores.[5] The stores have maintained the traditional Rite Aid pharmacy, but replaced the bulk of its health and beauty general merchandise with Save-A-Lot grocery product including fresh meat, produce, and frozen items.
The typical Save-A-Lot store is between 14,000 and 16,000 square feet (1,500 m2). However, it is not uncommon to see a store that is under 10,000 square feet (930 m2) or over 20,000 square feet (1,900 m2). The smaller footprint enables Save-A-Lot to be a no-frills operator. The company is able to reduce labor and shelving costs by ordering, shipping, and displaying its products in custom cartons. This also means its stores do not offer services such as salad bars, sushi bars, delis, cafeterias, baristas, or floral departments. Therefore, customers do not pay for these services in the end price of the product. The stores usually have three to four cash registers. Save-A-Lot had previously included money transfer and check cashing services at some of its locations, but discontinued these money centers in 2009.
Most Save-A-Lots have their fresh produce section near the front entrance of the store. In some cases, a "Special Buys" section is at the front of the store. This aisle includes products stacked on pallets rather than shelves that have been temporarily reduced in price (due to Save-A-Lot's bulk purchasing). Fresh meat, deli and smoked meats, and dairy are typically found at the back of the store. Frozen foods are generally positioned on the perimeter opposite the produce section. The inner aisles are reserved for grocery, general merchandise, and pet products.
Save-A-Lot employs a limited assortment concept in its production selection which results in an advertised 40% price advantage over conventional supermarkets. The stores generally offer strictly private label product and in only one size. This has resulted in a reduction of SKUs from 30,000 at conventional supermarkets to roughly 1,250. Save-A-Lot does offer national brands from time to time, including Coca-Cola, Little Debbie, Banquet Foods, Chef Boyardee, Pringles, Oscar Mayer and others.
The company leverages its store network of 1,200 in negotiating prices with its suppliers. Save-A-Lot contends many of these suppliers are the same manufacturers of leading national brands. In essence, Save-A-Lot shoppers do not pay for the marketing and advertising costs associated with nationally branded products. Save-A-Lot puts its name on these products, as Walmart has done with their Great Value private-label products, and also offers a 100% money back guarantee.
Save-A-Lot exclusive brands:
A majority of Save-A-Lot stores are owned and operated by independent licensees. Save-A-Lot supplies much these stores with its exclusive branded products, but the licensed owners have the freedom to sell other non-Save-A-Lot products at their stores. Some licensees have added services beyond the traditional Save-A-Lot model that includes bakeries, delis, liquor, tobacco, money transfers, and fuel services.
The distribution of licensed stores is spread across the contiguous United States. Most of these stores are located in small rural communities in Kentucky, Tennessee, Michigan, Indiana, Ohio, Western Pennsylvania, and Western New York.
After announcing it would double the size of the company in 2009, Save-A-Lot began offering a licensee incentive program to spur growth in its licensed division. Pending financial approvals of each individual applicant, Save-A-Lot offered to provide a minimum of $200,000 in capital assistance per new store. The program began in late 2009 and is in effect through early 2011.[6]
In 2010, Save-A-Lot expanded its presence into the Caribbean with licensed stores in San Nicolas, Aruba and Roseau, Dominica.
Major licensees include Houchens Industries of Bowling Green, KY, Alliance Foods of Coldwater, Michigan, and Saver Group of Campbellsville, Kentucky.
At select races during the 2008 and 2009 Nascar Nationwide Series Save-A-Lot sponsored the #60 Roush Fenway Ford Fusion driven by 2007 Champion Carl Edwards. Save-A-Lot ended its sponsorship of Edwards in 2010 to focus on other marketing campaigns.
In 2009, Save-A-Lot launched its foray into digital media with the creation of its Smart Shoppers Club on the company website. It is campaign that offers coupons and discounts via email. Members are also able to view and submit recipes and meals, build shopping lists, and rate and review Save-A-Lot products.
In the summer of 2010, Save-A-Lot launched a national television and radio campaign around the concept of "Savings Made Easy".[7] The campaign illustrates how shoppers can save up to 40% on their typical grocery bills by shopping at a smaller, more convenient edited-assortment store.
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