Supervalu pushing pharmacies to front of store

MINNEAPOLIS —Supervalu is testing a new store format that places pharmacies near the front entrance, instead of at the back of the store.

“We want pharmacies to be right up front,” said Supervalu Retail Midwest president Kevin Tripp at a Jan. 24 investor’s conference with analysts. “We want them to be a billboard that tells people we’re in the business.”

Tripp said the new format is now in place at several Jewel-Osco stores in the Chicago area and at a handful of Cub Foods and Albertsons-Sav-On stores. And he said the new location reflects the fact that pharmacy is considered a key element in the chain’s new Premium Fresh & Healthy format.

Tripp said Supervalu, currently with more than 900 pharmacies, ranks as the seventh-largest pharmacy retailer in the country in terms of revenue and has the ninth-largest number of storefronts. But he said customers often don’t think of Supervalu as a drug store destination because of the location of the pharmacy.

“Pharmacies at Supervalu and in supermarkets in general tend to be buried in the back of the store. So a lot of people never even see them,” Tripp said. “But pharmacies are a key element in our Fresh & Healthy format, and we want everyone to know that they’re there.”

He added that pharmacy “drives trips to stores,” and that customers who use the pharmacy at Supervalu visit more than twice as often as other customers and spend more per trip. He also said pharmacies at Supervalu stores are placing a great emphasis on education this year, with programs that inform customers about such long-term health problems as diabetes and blood pressure.

At the same investors conference, Supervalu chief executive officer Jeff Noddle said the 2,450-store chain plans to ramp up its remodel program during this year and remodel up to 165 stores compared with 125 in 2007.

“We’re pleased with our early remodel performance and plan to maintain our commitment to the remodel program,” Noddle said.

In other news, Supervalu announced that it’s closing its 2-year-old Sunflower Markets chain and shuttering all five stores in three states. “Ultimately, the format did not meet our goals,” said Supervalu spokeswoman Haley Meyer.

The smaller-format stores emphasized organic foods and all-natural products, and were seen as an alternative to such grocers as Whole Foods and Trader Joe’s. Three of the stores are located in Columbus, Ohio, and the other two are in Chicago and Indianapolis. The first store opened in early 2006, and Supervalu planned to open up to 50 stores, if the format proved successful.