Supervalu focusing on record number of food stamp recipients
Food stamps account for 40 percent of sales at Supervalu's Save-A-Lot stores.
Eden Prairie-based Supervalu is one of a handful of grocery chains changing the way it operates to accommodate the record number of food stamp recipients.
From opening supermarkets at midnight, when government benefits are loaded onto food-stamp cards, to promoting higher-priced bulk items earlier in the month, the new strategies show that the number of people using EBT cards to feed themselves has grown too large for groceries not to take notice.
According to a Bloomberg report, EBT cards account for 40 percent of sales at Supervalu's Save-A-Lot chains. As food stamp benefits dwindle later in the month, Save-A-Lot promotes smaller-sized items to accommodate customers with dwindling EBT balances.
As of November, 511,343 Minnesotans were on food stamps -- more people than live in Minneapolis and Duluth combined. The number of Minnesotans on food stamps increased 15.8 percent from September 2010 to last September, representing the third-highest jump in the country.
In the Bloomberg report, Supervalu CEO Craig Herkert is quoted as saying his stores are learning how to market to people using EBT cards. "You have to merchandise to it, and in some cases, run your stores to it," he said.
Supervalu's focus on low-income customers is part of the company's turnaround plan. With just over $38 billion in revenue in 2010, the company ranked as the fourth largest in Minnesota. But Supervalu was the only company out of the state's 15 largest to experience a revenue decrease from 2009 to 2010 (from $42 to $38 billion).
So while food-stamp recipients might not buy high-margin items, it appears that after a rough 2010, Supervalu is taking steps to better understand the plight of many of its customers and respond accordingly. It's a way to turn a profit even in the midst of a stagnating economy.
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