Word is out that Supervalu’s first natural and organic format store, Sunflower Market, located in Indianapolis, Indiana is GREAT.
One of our sources, an industry executive who prefers to be anonymous, Sunflower’s price points are great, adding that price points seemed to average 15% lower than most frozen and grocery items elsewhere. While not confirmed, this report is consistent with Supervalu’s success in various mainstream store formats; all emphasize high volume low price strategies.
While Supervalu has stated it will establish up to 50 Sunflower Markets throughout the Midwest, current plans for 2006 are currently limited to stores planned for Columbus, Ohio as well as one in the Lincoln Park area located in the north side of Chicago.
While the great prices might seem to be just an obvious marketing ploy as part of Sunflower’s launch, the company maintains it will focusing its strategy by taking lower margins to drive volume, and NBN sees no reason to doubt it. Supervalu, which posted a 37.7% sales growth in 2005, is renowned for its creative and successful strategies in its price driven superstores as well with its low price Save A lot format. Notably, Supervalu has experienced strong growth in the face of increasing competition form Wal-Mart, with great success with Save A Lot stores, the number leader among extreme-value format stores.
Supervalu, as part of its lead role in the consortium that purchased Albertson’s stated yesterday that it expected smooth sailing in integrating Albertson’s management as part of the merger. Supervalu cherry picked Albertson locations, including Acme, Jewel-Osco, Shaw’s and the Southern California premium gourmet leader, Bristol Farms.
A current review of Sunflower’s February 28 promotional flyer, valid through March 20th, was impressive. Great priced produce items included organic Bartlett pears for 99 cents a pound, organic broccoli for 79 cents a pound, organic navel oranges at 69 cents and organic yellow onions at 59 cents a pound. Organic cherry or grape tomatoes were on sale for $1.79 and a 5-pound bag of Newman’s Own Organic red potatoes sold for $1.99.
Other sale items offered included Coleman Natural boneless & skinless chicken breast at $2.99 a pound, bone in Coleman breasts at $1.99, San Pellegrino 25.5 ounce sparkling water for 99 cents, Stonyfield organic low fat yogurt at 2 for $1.00 and Eden organic red kidney beans at 99 cents.
Celestial Seasonings teas sold 2 for $4.00, Boca burgers were on sale for $2.99 and selected varieties of Rudi’s Organic 22 ounce sandwich bread, 2 for $5.00. Personal care values included the usual ‘suspects,’ also valued priced. Natrol, Yerba Prima, New Chapter, EO and Jason were just a few of the items offered in the flyer.
Earlier this year Supervalu announced a distribution agreement with United Natural Foods to supply its Sunflower stores. Additionally, Sunflower offers self-service checkout, an increasingly standard feature in mainstream grocery stores, but what NBN believes to be the first natural supermarket to do so. We’re told the store looked terrific, and from the well-designed and engaging flyer, Sunflower, like H.E Butt’s Central Markets before it, has created a new natural chain that we’re excited to say is heating up the competition.
