SUPERVALU enters the growing natural and organic foods market

20/10/05 SUPERVALU has announced its plans to enter the growing natural and organic foods market with the launch of Sunflower® Market, a value-priced organic foods retail outlet. The first Sunflower Market is scheduled to open in Indianapolis in January 2006.

The company announced the new retail format today at its 2005 Investor Conference. In addition, SUPERVALU updated its same store sales guidance for corporate-owned Save-A-Lot stores. The company now expects positive same- store-sales comparisons for the remainder of the year.

Sunflower Market is SUPERVALU's response to the rapidly growing market for natural and organic foods in the U.S. According to SUPERVALU's consumer research, 96 percent of consumers use fresh organic produce at least occasionally. Research also indicates that while 66 percent of the U.S. population seeks organic products that offer nutritional, appetizing solutions for themselves and their families, the cost of organic foods is the most common obstacle for consumers.

SUPERVALU brings 135 years of grocery retail and supply chain experience to the launch of Sunflower Market. With the Sunflower Market format, SUPERVALU is leveraging its experience in operating its successful Save-A-Lot chain, which is known for its targeted approach, small-box design and limited assortment strategy. Sunflower Market's typical footprint is expected to range from 12,000 to 15,000 square feet, and the banner will stock from 8,000 to 12,000 store keeping units (SKUs) of natural and organic products. All Sunflower Market stores will be operated by SUPERVALU.

In addition, with its significant range of capabilities, SUPERVALU has the ability to develop and launch its new banner, as well as source a large percentage of Sunflower Market's produce through W. Newell & Co., SUPERVALU's specialty produce company. Additionally, over 100 private label items, marketed under the newly launched "Nature's Best" brand, will be deployed through SUPERVALU warehouses, and Sunflower Market will utilize SUPERVALU's standardized information technology backbone for merchandising systems, store systems and operations support.

Sunflower Market will offer value-priced products of the highest quality available: organic wherever possible, minimally processed, with no artificial colorings, sweeteners, flavors or preservatives. The stores will contain: grocery, frozen and dairy departments; produce and bulk foods; deli and cheese; all-natural bakery and café; hormone- and antibiotic-free meat and seafood; beer and wine; and wellness departments.

Sunflower Market will serve an ever-increasing segment of the American market with significant growth potential in coming years.

To leverage the new Nature's Best brand, SUPERVALU will make this private label program available to its corporately owned and operated retail banners as well as to the nearly 2,200 independent retailers to which SUPERVALU is a primary distributor.