As Save A Lot started 2023, the grocery chain is putting the final touches on its transformation that included selling all corporate stores and completing a refinancing that its CEO Leon Bergmann said eliminates uncertainty, lowers the cost of borrowing and sets the company up for growth.
During the recent FMI Midwinter Executive Conference in Orlando, Bergmann spoke with Store Brands about the year ahead for his company, the impact Save A Lot continues to have on the communities it serves and the importance of private label products in the grocer’s assortment.
STORE BRANDS: As we look ahead, what major initiatives are in the offing?
LEON BERGMANN: We are always looking for ways to improve and this includes a continual review of our categories. For example, we just launched a new own-brand line of fresh sausage as we are working with a new manufacturer. We are also redoing our line of pizza and bringing in a new line of HBC products. It’s all pretty exciting. We also updated our POS back office suite, which was a wise investment as our prior system was dated. We also rationalized our distribution network with the closure of two facilities. We’ve removed fixed costs out of the system but we still have plenty of capacity to grow.
SB: What impact do the fiscal decisions that have been made have on shoppers?
LB: What we do is so important for the communities we serve. If Save A Lot was not here, there would be 250 additional food deserts in the U.S. We have a model that can serve underserved communities and do so sustainability. We provide a great service and great value to our customers, and also being able to make a profit means we’re going to be here for the long term.
SB: How important is Save A Lot’s assortment of private label products in helping serve your customers?
LB: About 70% of our sales come from private label products. The good news with our assortment is that the items we carry are at or above the national brand equivalent in terms of quality. Currently, our private label assortment features 55 brands.
SB: Is there more marketing Save A Lot can do to further raise the profile of its private label assortment?
LB: We do market our store brands, but we do need to do better, which is an initiative this year. But our customers also trust us and know what to expect from our products. While we get credit from our existing customer base, we can do a better job of getting more credit from first time shoppers.
SB: Sustainability remains a major talking point for grocers and retailers. How does this issue impact Save A Lot?
LB: This is an issue that is very much top of mind. In April, we will publish our first ESG (Environmental, Social & Governance) report. For us, a lot of what we do currently plays into the ‘S’ part of ESG. I think the big question related to this issue going forward is how much extra is the consumer willing to pay for items that are sustainable.