NEW YORK (Dow Jones)–Inflation looks to be the biggest challenge for supermarket company Supervalu Inc. (SVU) as it tries to bring prices back down in line with competitors to win customers back.
"With all of our major vendors announcing their intentions to pass along rising costs, we expect store prices to rise throughout the calendar year," anywhere from 3% to 14%, said Chief Executive Craig Herkert during an earnings conference call Tuesday.
"We are passing these on to our customers," Herkert added. "But where possible, we'll leverage our scale to mitigate increases." In the third quarter, Supervalu saw 100 basis points of inflation.
The company, which owns supermarket chains including Albertsons and Shaw's, has been caught between cutting prices too much and competitors holding the line on what they charge, while vendors are seeking higher payments.
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