Supervalu returns to Q4 profit

Minneapolis Supervalu's cost-cutting efforts helped the grocer return to a fourth-quarter profit, but the operator of the Albertsons and Save-A-Lot chains says a number of challenges still lie ahead and forecast 2011 results mostly below expectations.

"This is a long-term process for us," Supervalu CEO Craig Herkert told investors during a call Tuesday. "There is no one-quarter fix."

Supervalu suffered when the recession hit because it was slow to respond to shoppers' new demands and faced stiffer competition, according to the Associated Press. The company has since brought in new leadership, cut costs, trimmed stores, reduced inventory and increased its focus on lower prices and its discount Save-A-Lot stores to improve business.

Supervalu said some of those moves are paying off and reported that it earned $97 million during the fourth quarter.

The results are up sharply from the year-ago quarter, when the grocer reported a loss of $201 million.

However, revenue fell 15% to $9.21 billion as fewer stores, lighter customer traffic and a shorter quarter cut into sales.

Supervalu said it continues to struggle with many of the same big-picture issues it has faced for several quarters: Shoppers are still feeling the pressure of the weak economy and continue to look to coupons and low-priced goods to save on essentials. The company still is up against tough competition from other supermarkets and discounters, which makes it difficult to raise prices.

The company said it will continue to emphasize lower prices but is launching a number of new stores, store remodels and eventually, a new effort to improve the shopper's experience in the stores, to drive future growth.

Herkert also said Supervalu will continue to reduce its debt and keep strict control over costs to position it for growth into 2012.

In addition, the company is restructuring its board, slashing membership to 12 directors from 50 and adding two new directors to bring fresh perspective to the group.