Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Deborah Weinswig - Citigroup.
Deborah Weinswig - Citigroup
Pam, you stated that part of the issue as regards the SG&A side of things is the fact that SuperValu did not appropriately cut back labor hours. Is there a new labor scheduling software that you’re going to be using or are new disciplines going to be put in place? How are you going to be achieving lower hours in light of the sales performance?
Pamela K. Knous
I think it was really just a question of adjusting to the new sales levels. Clearly there is an inflation component of those sales in relationship to units, and I think it really was just a question of forecasting. We would not say that a new tool is necessary but that just greater focus on sales performance, [inaudible], so that is something that we’re on top of and we’ve really got rectified already as we move into the third quarter.
Jeffrey Noddle
I’ll comment on that further too. We really have a state-of-the-art labor scheduling system and software. That really isn’t the issue. As we commented, the disappointment we had in sales was really at the end of the quarter and I don’t think we had fully adjusted to the effective inflation and that we’re handling less tonnage of goods on our front ends for example. We adjusted that opportunity and most of that correction is already in place and we should see some in the third and certainly a lot more in the fourth.
Deborah Weinswig - Citigroup
On the urban fresh format, and obviously it’s still early days, but can you talk about the strategy and how you’re thinking about this format going forward?
Jeffrey Noddle
We’re very excited. We took a location that we had in the Lincoln Park area of Chicago, which if you’re familiar with it is on the near North side and very much surrounded by young professionals and very urban commuters as we talked about, and we wanted to experiment. We had really planned this for quite some time though I know a lot of people are trying smaller format stores, we just thought this was the location that lent itself to that.
We took our [Jewel-Osco] team which is very creative and innovative in this regard and we said, ?Let’s create something together,? and we put in a lot of ideas, a lot of food-to-go, a lot of meal solutions, very limited, I wouldn’t call it completely limited dry grocery and staple items but a good enough selection of the important items. But we really emphasized something that I think is attractive to the foodies, a lot of organic and certainly a lot of prepared meals, different entrees and things during the lunch hour that varies by day of the week and the same for dinner.
- To read the full transcript on Seeking Alpha, click here »
