Save-a-Lot is a discount supermarket chain, and subsidiary of SUPERVALU. Headquartered in Earth City, Missouri, Save-A-Lot stores carry most typical grocery products, but they feature considerably less variety than conventional supermarkets. They do offer a good selection of private brands that more than make up the difference.
Save-a-Lot was founded in 1977 by Bill Moran as a convenient, value alternative to larger supermarkets. He opened the first Save-A-Lot store in Cahokia, Illinois and remained with the company until his retirement in 2006. Moran oversaw the expansion of his company from one store in 1977 to more than 1,000 locations across the country. He was succeeded as President and CEO by Bill Shaner, then 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 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, Save-A-Lot added 50 new locations in the Mid-South region and a warehouse in Jackson, Tennessee in 1980 alone.
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 Save.
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 centers from Jewel 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 and Scott’s Food & Pharmacy at the time. The acquisition opened up Save-A-Lot’s licensee opportunities to conventional Supervalu supplied operators such as Niemann Foods 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.
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 implement more general merchandise into its grocery stores. The company experimented with hypermarkets which combined the discount grocery and merchandise concepts under one roof. This eventually lead 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 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.
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 States. Save-A-Lot plans to open a new distribution center in Davidson County, North Carolina 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 and South Texas 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 chain Rite Aid became a licensed Save-A-Lot operator when it converted ten of its existing pharmacy locations in the Greenville, South Carolina 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.
Save-A-Lot employs a limited assortment concept in its production selection which resulted 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-Cola, Little Debbie, Banquet Foods, Chef Boyardee, Pringles, Oscar Mayer 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 such as Walmart has done with their Great Value private-label products and also offers a 100% money back guarantee.
A majority of Save-A-Lot stores are owned and operated by independent licensees. Save-A-Lot supplies much of 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.
After the announcement to 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 until early 2011.
At select races during the 2008 and 2009 Nascar Nationwide Series Save-A-Lot sponsored the #60 Roush Fenway Ford Fusion driven by 2007 Champion Carl Edwards. Save-A-Lot ended its sponsorship of Edwards in 2010 to focus on other marketing campaigns.
Headquarters: Earth City, Missouri
No. of Stores: approximately 1,250 stores in the United States (2010)
No. of Employees: unknown
Revenue: over $4 billion in annual sales (2010)
Geography: The distribution of licensed stores is spread across the contiguous United States. Most of these stores are located in small rural communities in Kentucky, Tennessee, Michigan, Indiana, Ohio, Western Pennsylvania, and Western New York. In 2010, Save-A-Lot expanded its presence into the Caribbean with licensed stores in San Nicolas, Aruba and Roseau, Dominica.
Special Services: Dairy, deli, frozen foods, general grocery, meat, produce, snacks, liquor, general merchandise
Caskey’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
World’s Fair – frozen desserts
Wylwood – canned vegetables