Supervalu (SVU) SWOT Analysis

adam April 15, 2011 Retailing No Comments

Supervalu is the public incorporation well renowned as the grocery retiling in United States. The company foundation in Minneapolis, Minnesota dates back to 1926 and is headquartered in Eden Prairie, Minnesota, United States. The retailing banners of the company include Acme Markets, Jewel-Osco, Albertsons, Save-A-Lot, Shaw’s Supermarkets, and Shoppers Food & Pharmacy. Along with the grocery retaining the company is retailing pharmacy and foods as well.

Strengths

• The revenue of the company are constantly increase every year, and the generated revenue has reached up to almost $45 to 46 billion.

• According the fortune 100 list, the company ranks at 51st position overall but in food retailing it’s the third biggest in United States.

• Amongst the Top Wholesalers given by super market news the company is enjoying the liberty of the top markets.

• Presently the company is successfully running 2,505 food and combination stores of food and drugs, in store pharmacies outlets are 878, in addition to 2,200 stores the company is primary distributor of fuel in 117 centers.

• The operating income that is $1.684 billion comparative to revenues is very low.

• Wide portfolio of store brands & regional banners.

• The strong national presence of the company with its diverse supply chains.

• The retaining form is never monotonous and is varied accordingly.

• The constantly increasing profitability ratios have made the reduction of debt possible.

• The company has long history of acquisition in a short span and its acquired companies includes Shop ‘n Save, Cub Foods, Scott’s Food & Pharmacy , Shoppers’ Food Warehouse, Metro, Save-A-Lotbigg’s , Farm Fresh Food & Pharmacy, and fresh Food & Pharmacy.

Weaknesses

• There is a very little improvement in the asset value of the company as it is at $21.062 billion and is still liable to decrease.

• Despite holding the huge number of employees that is 192,000, the labor presence and their expertise are not up to the mark.

• The marketing strategies are underdeveloped and proper marketing could not be done.

• The marketing programs are not well established to judge the shoppers insight.

• The decision of the assts among the states is not at equity ratio, it is concentrated more in some states such as Idaho.

Opportunities

• The acquisitions of the company especially that of New Albertson has placed the company at the leading positions as 1,100 stores of New Albertson based in Idaho were sold to the Supervalu.

• The Save A Lot and Cub foods brands are franchised to reduce pressure on the local businesses as they are franchised to independent retailers.

• The blooming business of organics with a focus to high profit margins retailing.

• The loyalty card program for enhancing the shopper interests and to provide the company an insight to act accordingly.

• The internet network is expanded by launching more websites and maximizing the sales.

Threats

• The financial problems being faced due to tight margins, revenue falls, assets and weak economy.

• Wal-Mart Supercentres are posing a high competition to Supervalu stores.

• Whole sales can suddenly shift to other whole sales chains.

• Labor wages are raising high because of inflation.

References

• “Fortune 500 List of Best Companies (2009)”.( January 1, 2009). Money Magazine. Mike Hughlett (January 6, 2011). “Supervalu to close stores, offer unpaid time off”. Star Tribune.

• Sarah Skidmore (January 11, 2011). “Supervalu loses money in 3Q, cuts outlook for year”. National Business.

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