The Tribune

By NEIL HARTNELL Tribune Business Editor THE SUPERVALUE supermarket chain saw a more than 20 per cent year-over-year increase in its Christmas sales figures, its owner and president telling Tribune Business yesterday the company was likely to invest a further $500,000 on store upgrades during the 2012 first quarter. Rupert Roberts said the Yuletide holiday top-line "could have done 10 per cent better" had it not been for customer service problems caused by hiring additional staff late in 2011 to cope with the holiday rush. He added that Supervalue had invested some $1 million since last summer in upgrades across the 11 store chain, focusing on providing more check-out aisles and cash registers, plus enhanced generator equipment. "Christmas was very good. It was above last year," Mr Roberts told Tribune Business. "It was surprised, because I thought last year would be better than 2011, but it wasn't. Around September/October time it looked like the economy had slowed a little, but it came through for Christmas. We were up over 20 per cent on the top line." The Supervalue chief said one factor behind the Christmas sales growth was the fact 2011 had seven shopping days immediately before Christmas, compared to six says in the 2010 run-up. "The last day was the big day. That alone could make you 20 per cent," he added. "We've been growing, expanding off our competitors. While there was a fall-off as a result of the recession, we've been growing at the expense of our competitors." Mr Roberts said the market share lost by City Markets as a result of its financial woes was likely to have been spread between the other major players, such as himself, and the neighbourhood food store chains. He added that Supervalue, and others in the industry, appeared to have been fortunate in that the "80 per cent" who continue to have jobs and incomes were demanding more than when consumers were at "100 per cent". The "20 per cent decline" are those consumers who have lost jobs, become underemployed or seen incomes cut sharply. "We're still the low price leader, and that's why I think we still did well," Mr Roberts added. "We typically bought our ham and turkey in August. Last year, to get the price, we bought them in April. Things like that allowed us to stay ahead of the market, and get the price we could then pass on to consumers." Supervalue's growth, and the extra business it was attracting, had a knock-on impact on service standards, as it forced the company to hire additional staff in the run-up to Christmas without necessarily having the time to fully train them. Mr Roberts acknowledged that service standards were "not there to out satisfaction", but the hiring of front-of-store hostesses had "eased the pain". Service issues, he added, were set to be fully addressed by the end of March. Referring to the company's investments in extra store space at outlets such as Top-of-the-Hill Mackey Street, and extra check out and specialty food lines, Mr Roberts told Tribune Business: "Not all of it will turn to profits in the next three months, but it will turn into profits for the last nine months of the year. "In the last three months we've put an extra $500,000 into the business, and by the time we get it completed by the end of March, it could be closer to $1 million." Since summer 2011, Mr Roberts said Supervalue had been working to replace old and inefficient refrigeration equipment throughout its 11 stores with more modern systems that consumed less energy. Supervalue is paying "just under $400,000" per month to BEC to cover its electricity costs, and Mr Roberts said the chain had also added an extra stand-by electricity generator at its four largest stores to provide "extra insurance" for their $250,000 perishable inventories. Supervalue also retains three additional generators at its warehouse, and has two mobile generators that can be deployed as needed. "From summer to now we've invested $1 million in equipment, and there's $500,000 to go to complete what we're trying to do, which is mainly to give better service, and make the stores more spacious and accommodating," Mr Roberts told Tribune Business. Emphasising that 2012 was expected to be "a little better", once consumers got through a January when they were concentrating on paying their bills, Mr Roberts said Supervalue's $6 million warehouse inventory - together with the $6 million spread between its 11 stores - provided a counterweight to any immediate increase in global food prices.