Save-A-Lot

An American Discount Grocery Store

Susan Chrusniak
Renee Kristellar
Amy Thompson
Maryam Zangeneh
Table of Contents

Executive Summary....................................................................................................................................... 3
Business Description ..................................................................................................................................... 3
The Market .................................................................................................................................................... 3
Development and Production ....................................................................................................................... 4
Sales and Marketing...................................................................................................................................... 4
Management................................................................................................................................................. 4
Financials....................................................................................................................................................... 4

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Executive Summary

Business Description
Save-A-Lot is an American discount supermarket chain headquartered in Earth City, Missouri, near St.
Louis. The company comprises more than 1300 stores across 36 states in the United States with over $4
billion in annual sales.

Pending financial approvals of each individual applicant, Save-A-Lot offered to provide a

minimum of $200,000 in capital assistance per new store. The program began in late 2009 and

was in effect through early 2017. A majority of Save-A-Lot stores are owned and operated by

independent licensees. Save-A-Lot supplies much of these stores with its exclusive branded

products, but the licensed owners have the freedom to sell other non-Save-A-Lot products at

their stores. Some licensees have added services beyond the traditional Save-A-Lot model that

includes bakeries, delis, liquor, tobacco, money transfers, and fuel services. The distribution of

licensed stores is spread across the contiguous United States. Most of these stores are located in

small rural communities in Kentucky, Tennessee, Michigan, Indiana, Ohio, Western

Pennsylvania, and Western New York.

The Market
Grocery retailing is a dynamic and highly competitive industry with very low profit margin and vast
dependability to the skilled human resource, and it’s becoming more so. Grocery retailing like many
other food businesses are strongly tied to the economy. Despite the fact that the U.S. economy
seemingly emerging from the downturn during the past few years, rising competition and changing
consumer preferences have threatened many operators including Save-A-Lot.

The affect of the German discount stores such as Aldi and Lidl, the health conscious of the

millenniums generation, the information technology era and renovation of online shopping, the

shift of American culture away from cooking and last but certainly not the least the entrance of

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the online shopping giant, Amazon in the grocery industry are the major forces upon the current

businesses.

From the factors that are threatening the grocery industry, online shopping and health conscious

customers do not impact the discount supermarkets with mainly low income, value seeking,

mostly government funded customers. The Giant retailers such as Walmart and German discount

store Aldi are imposing the biggest threat for Save-A-Lot to compete. Aldi which also has

entered the US market 40 years ago has been developing much stronger brand than Save-A-Lot.

At the corporate level, the new leadership has already launched the first wave price cut by

reducing about 69 different products. They are also aggressively in negotiating process to work

with new suppliers to reduce the price of milk, egg, paper and cheese. They are also in process of

introducing beer and wine to all of their stores planogram to increase the basket value of each

customer.

Development and Production

Sales and Marketing

Management

Financials