Businessmodel of SUPERVALU

Customer Segments

SuperValu has a segmented market business model, with customer groups that have slightly different needs. The company targets its offerings at consumers and at retailers.

Value Proposition

SuperValu offers three primary value propositions: pricing, innovation, and brand/status.

The company offers a pricing value proposition. It operates a private brand program through which it sells value-priced alternatives to major national brands. The program’s selection includes over 5,000 foods and general merchandise items, ranging from flour and sugar to meats and specialty items.

The company has embraced innovation throughout its history. Its groundbreaking efforts include:

• Building the first modern grocery warehouse in Minneapolis
• Becoming the first distribution company to use motorized trucks for deliveries
• Building a chute that enables products to move between floors without the use of elevators
• Using computer technology to streamline warehouse inventory monitoring, retail order processing, truck dispatching, and accepting of manufacturer shipments
• Launching SVHarbor, an Internet-enabled business-to-business portal for affiliated and corporate retailers, manufacturer partners, and distribution centers
• Building the East View Innovation Center on its home office campus, a facility that includes state-of-the-art test kitchens, sensory laboratories, and grocery store department prototypes The company has established a powerful brand due to its success. It is the fifth-largest food retailing chain in the U.S., following Kroger and Albertsons. It is one of the largest public company grocery wholesale distributors and one of the largest hard discount grocery retailers by store count. It generates annual sales of $13 billion, operates through a network of 2,012 franchised and affiliated stores, and has 30,000 employees.

Channels

SuperValu’s main channels are its retail stores for consumers and its direct sales team for retailers. The company promotes its offerings through its website, social media pages, and advertising.

Customer Relationships

SuperValu’s customer relationship is primarily of a self-service nature. Customers utilize its products and services while having limited interaction with employees.

Key Activities

SuperValu’s business model entails distributing branded and private-label products to consumers and retailers and providing related services.

Key Partners

SuperValu’s key partners are the product brands that provide their goods for sale in its stores.

Key Resources

SuperValu’s main resources are its physical resources, which include over 2,012 retail stores comprising 13 million square feet of distribution space. It also has important human resources in the form of the employees that design and develop its private label products and that provide customer service in its retail locations.

Cost Structure

SuperValu has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is cost of sales, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

SuperValue has one revenue stream: revenues it generates from the sale of its products to consumers and retail chains. Sales to retailers typically occur through the signing of contracts.