Save-A-Lot
Encyclopedia
Supermarket
A supermarket, a form of grocery store, is a self-service store offering a wide variety of food and household merchandise, organized into departments...
chain
Chain store
Chain stores are retail outlets that share a brand and central management, and usually have standardized business methods and practices. These characteristics also apply to chain restaurants and some service-oriented chain businesses. In retail, dining and many service categories, chain businesses...
headquartered in Earth City, Missouri
Earth City, Missouri
Earth City, Missouri is an unincorporated community located in St. Louis County, along Interstate 70 near the Missouri River. It is bounded by the city of Bridgeton on the east and north, the city of Maryland Heights to the south, and the Missouri River to the west. It is also in proximity to...
, near St. Louis
St. Louis, Missouri
St. Louis is an independent city on the eastern border of Missouri, United States. With a population of 319,294, it was the 58th-largest U.S. city at the 2010 U.S. Census. The Greater St...
, United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. The subsidiary of Supervalu
Supervalu (United States)
SuperValu Inc. is a United States grocery retailer and distributor. The corporation, headquartered in Eden Prairie, Minnesota, has been in business for over a century. It is the third-largest food retailing company in the United States , and ranks #51 on the Fortune 100 list.On June 2, 2006,...
comprises approximately 1,250 stores in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
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 15000 square feet (1,393.5 m²) with items displayed in their cardboard shipping boxes.
History
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, IllinoisCahokia, Illinois
Cahokia is a village in St. Clair County, Illinois, United States. As of the 2000 census, the village had a population of 16,391. The name is a reference to one of the clans of the historic Illini confederacy, who were encountered by early French explorers to the region.Early European settlers also...
, 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.
Expansion
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-SouthEast South Central States
The East South Central States constitute one of the nine Census Bureau Divisions of the United States.Four states make up the division: Alabama, Kentucky, Mississippi, and Tennessee...
region, and a warehouse in Jackson, Tennessee
Jackson, Tennessee
Jackson is a city in Madison County, Tennessee, United States. The total population was 65,211 at the 2010 census. Jackson is the primary city of the Jackson, Tennessee metropolitan area, which is included in the Jackson-Humboldt, Tennessee Combined Statistical Area...
.
Acquisitions
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 SaveShop 'n Save
Shop ’n Save is a grocery store chain with forty stores in the St. Louis, Missouri, market. The company, headquartered in Kirkwood, Missouri, is a wholly owned subsidiary of SuperValu, based in Eden Prairie, Minnesota.-History:...
.
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 center
Distribution center
A distribution center for a set of products is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products to be redistributed to retailers, to wholesalers, or directly to consumers. A distribution center is a principal part, the order...
s from Jewel
Jewel (supermarket)
Jewel-Osco is a supermarket chain headquartered in Itasca, Illinois, a Chicago suburb. Jewel-Osco has 182 stores across northern, central, and western Illinois; eastern Iowa; and portions of northwest Indiana.Jewel-Osco and Jewel are currently wholly owned subsidiaries of Eden Prairie,...
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
Cub Foods
Cub Foods is a supermarket chain with seventy-three stores in Minnesota, Wisconsin and Illinois. The company is a wholly owned subsidiary of Eden Prairie, Minnesota-based SuperValu...
and Scott's Food & Pharmacy
Scott's Food & Pharmacy
Scott's Food & Pharmacy is a supermarket chain with eighteen stores in the Fort Wayne, Indiana market. The company was once a wholly owned subsidiary of SuperValu, but was acquired by The Kroger Co. in 2007.-History:...
at the time. The acquisition opened up Save-A-Lot's licensee opportunities to conventional Supervalu supplied operators such as Niemann Foods
Niemann Foods
Niemann Foods is a company headquartered in Quincy, Illinois that owns and operates about 90 supermarkets, convenience, pet and hardware stores mostly under the County Market, County Market Express, Cub Foods, ACE Hardware, Pet Supplies Plus, Pick-A-Dilly and Save-A-Lot banners in Illinois, Iowa,...
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.
Deal$
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 store
Grocery store
A grocery store is a store that retails food. A grocer, the owner of a grocery store, stocks different kinds of foods from assorted places and cultures, and sells these "groceries" to customers. Large grocery stores that stock products other than food, such as clothing or household items, are...
s. The company experimented with hypermarket
Hypermarket
In commerce, a hypermarket is a superstore combining a supermarket and a department store. The result is an expansive retail facility carrying a wide range of products under one roof, including full groceries lines and general merchandise...
s 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
Dollar Tree
Dollar Tree, Inc. is an American chain of discount variety stores that sells every item for $1.00 or less. A Fortune 500 company, Dollar Tree is headquartered in Chesapeake, Virginia and operates 4,010 stores throughout the 48 contiguous U.S. states. Its stores are supported by a nationwide...
for $30.5 million plus inventory. Save-A-Lot has reduced the amount of general merchandise in its combination stores and returned them to its grocery-focused model.
Recent expansion
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. The company would open nearly 100 stores in 2010 with a major focus on the Southeastern United StatesSoutheastern United States
The Southeastern United States, colloquially referred to as the Southeast, is the eastern portion of the Southern United States. It is one of the most populous regions in the United States of America....
. Save-A-Lot plans to open a new distribution center in Davidson County, North Carolina
Davidson County, North Carolina
-Demographics:As of the census of 2010, there were 149,331 people, 58,156 households, and 42,512 families residing in the county. The population density was 267 people per square mile . There were 62,432 housing units at an average density of 113 per square mile...
, 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
Houston, Texas
Houston is the fourth-largest city in the United States, and the largest city in the state of Texas. According to the 2010 U.S. Census, the city had a population of 2.1 million people within an area of . Houston is the seat of Harris County and the economic center of , which is the ...
, and South Texas
South Texas
South Texas is a region of the U.S. state of Texas that lies roughly south of and including San Antonio. The southern and western boundary is the Rio Grande River, and to the east it is the Gulf of Mexico. The population of this region is about 3.7 million. The southern portion of this region is...
as "El Ahorro Save-A-Lot". The new stores feature Save-A-Lot product offerings along with more traditional Hispanic staples.
In late 2010, drug store
Pharmacy
Pharmacy is the health profession that links the health sciences with the chemical sciences and it is charged with ensuring the safe and effective use of pharmaceutical drugs...
chain Rite Aid
Rite Aid
Rite Aid is a drugstore chain in the United States and a Fortune 500 company headquartered in East Pennsboro Township, Pennsylvania, near Camp Hill. Rite Aid is the largest drugstore chain on the East Coast and the third largest drugstore chain in the U.S....
became a licensed Save-A-Lot operator when it converted ten of its existing pharmacy locations in the Greenville, South Carolina
Greenville, South Carolina
-Law and government:The city of Greenville adopted the Council-Manager form of municipal government in 1976.-History:The area was part of the Cherokee Nation's protected grounds after the Treaty of 1763, which ended the French and Indian War. No White man was allowed to enter, though some families...
, market to "Save-A-Lot/Rite Aid" co-branded stores. 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.
Business model
Store layout
The typical Save-A-Lot store is between 14,000 and 16000 square feet (1,486.4 m²). However, it is not uncommon to see a store that is under 10000 square feet (929 m²) or over 20000 square feet (1,858.1 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.
Limited assortment concept
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-ColaCoca-Cola
Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines in more than 200 countries. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke...
, Little Debbie, Banquet Foods
Banquet Foods
Banquet Foods is a subsidiary of ConAgra Foods that sells various food products, notably frozen pre-made entrées, meals, and desserts.Banquet was founded in 1953, with the introduction of frozen meat pies. Banquet first hit the store shelves in 1955, offering frozen dinners. Soon after that,...
, Chef Boyardee
Chef Boyardee
Chef Boyardee is a brand of canned pasta products sold internationally by ConAgra Foods. Named after its founder, Italian-American immigrant Ettore Boiardi, the company began production in the United States in the 1920s...
, Pringles
Pringles
Pringles is a brand of potato and wheat based snacks originally developed by Procter & Gamble. Pringles are sold in more than 140 countries and have yearly sales of more than...
, Oscar Mayer
Oscar Mayer
Oscar Mayer is an American meat and cold cut production company, owned by Kraft Foods, known for its hot dogs, bologna, bacon and Lunchables products.-History:...
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:
- Kaskey's - soups
- Coburn Farms - dairy
- Bubba - sodas
- Fairgrounds - deli meats
- J. Higgs - salty snacks
- Kurtz - condiments
- Malone's - canned meats and beans
- Mantia's - pasta and Italian
- Nature Trails - wholesome snacks
- Port Side - seafood
- Portman's - salad dressing
- Skillet Masters - meal mixes
- Today - various products
- World's Fair - frozen desserts
- Wylwood - canned vegetables
Licensed owners
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
Kentucky
The Commonwealth of Kentucky is a state located in the East Central United States of America. As classified by the United States Census Bureau, Kentucky is a Southern state, more specifically in the East South Central region. Kentucky is one of four U.S. states constituted as a commonwealth...
, Tennessee
Tennessee
Tennessee is a U.S. state located in the Southeastern United States. It has a population of 6,346,105, making it the nation's 17th-largest state by population, and covers , making it the 36th-largest by total land area...
, Michigan
Michigan
Michigan is a U.S. state located in the Great Lakes Region of the United States of America. The name Michigan is the French form of the Ojibwa word mishigamaa, meaning "large water" or "large lake"....
, Indiana
Indiana
Indiana is a US state, admitted to the United States as the 19th on December 11, 1816. It is located in the Midwestern United States and Great Lakes Region. With 6,483,802 residents, the state is ranked 15th in population and 16th in population density. Indiana is ranked 38th in land area and is...
, Ohio
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...
, Western Pennsylvania
Western Pennsylvania
Western Pennsylvania consists of the western third of the state of Pennsylvania in the United States. Pittsburgh is the largest city in the region, with a metropolitan area population of about 2.4 million people, and serves as its economic and cultural center. Erie, Altoona, and Johnstown are its...
, and Western New York
Western New York
Western New York is the westernmost region of the state of New York. It includes the cities of Buffalo, Rochester, Niagara Falls, the surrounding suburbs, as well as the outlying rural areas of the Great Lakes lowlands, the Genesee Valley, and the Southern Tier. Some historians, scholars and others...
.
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.
In 2010, Save-A-Lot expanded its presence into the Caribbean
Caribbean
The Caribbean is a crescent-shaped group of islands more than 2,000 miles long separating the Gulf of Mexico and the Caribbean Sea, to the west and south, from the Atlantic Ocean, to the east and north...
with licensed stores in San Nicolas, Aruba
San Nicolas, Aruba
San Nicolaas is southeast of Oranjestad, and is Aruba's second largest city. As of 2008 it has a population of 18,126, most who originate from the British Caribbean. Known as the island's Sunrise Side, San Nicolaas was once a bustling company town, when Lago Oil and Transport operated its oil...
and Roseau, Dominica.
Major licensees include Houchens Industries
Houchens Industries
Houchens Industries, is an American employee-owned company, in business since 1918 when it began as a small grocery operated by founder Ervin Houchens in rural Barren County, Kentucky. The company is headquartered in Bowling Green, Kentucky. The company runs about 425 grocery and convenience stores...
of Bowling Green, KY, Alliance Foods of Coldwater, Michigan
Coldwater, Michigan
Coldwater is a city in the U.S. state of Michigan. As of the 2010 census, the city population was 10,945. It is the county seat of Branch County....
, and Saver Group of Campbellsville, Kentucky
Campbellsville, Kentucky
Campbellsville is a city in Taylor County, Kentucky, United States. The population within city limits was 10,498 at the 2000 census. It is the county seat of Taylor County, and the home of Campbellsville University...
.
Nascar
At select races during the 2008 and 2009 NascarNASCAR
The National Association for Stock Car Auto Racing is a family-owned and -operated business venture that sanctions and governs multiple auto racing sports events. It was founded by Bill France Sr. in 1947–48. As of 2009, the CEO for the company is Brian France, grandson of the late Bill France Sr...
Nationwide Series Save-A-Lot sponsored the #60 Roush Fenway Ford Fusion driven by 2007 Champion Carl Edwards
Carl Edwards
Carl Michael Edwards, II is a NASCAR driver. He currently drives the #99 Fastenal/Aflac Ford Fusion in the Sprint Cup Series and the #60 Ford in the Nationwide Series for Roush Fenway Racing...
. Save-A-Lot ended its sponsorship of Edwards in 2010 to focus on other marketing campaigns.