Dive Brief:

• Save A Lot has finished converting to a pure play wholesale model following the completion of a program under which it sold almost 300 corporate-owned stores to local operating groups, the discount grocery chain said in a press release on Thursday.
• The retailer will hold onto 18 locations in its home market of St. Louis, which it plans to use to test "new innovations and programs."
• The transition is part of a multi-year initiative by Save A Lot to improve its financial position and revitalize its brand.

Dive Insight:

Save A Lot's decision to place control of nearly all of its approximately 900 stores across 32 states in the hands of independently owned licensees heralds the start of a new chapter for the grocery company, which faces intense competition from other supermarket chains that are also focused on low prices.

The retailer transferred ownership of the locations in batches through 34 deals with existing store operators and 15 new ownership groups, which will continue to run the locations under the Save A Lot brand. The transactions include the sale of 33 locations in the Orlando, Florida, region to Ascend Grocers, which Save A Lot announced last month, and the December acquisition by Ohio-based Fresh Encounter of 51 Tampa, Florida-area locations.

Save A Lot, which has been working to reorganize its finances and reduce debt, is working with the owners on a drive to refresh all of the chain's locations by 2024. The company said its partners finished last year 200 of the remodeling projects, under which stores are receiving updates including wider aisles, better lighting and a more convenient layout.

"This re-licensing program positions our company to better serve our Retail Partners as they support their customers and communities," Save A Lot Executive Vice President and Chief Financial Officer Mark Hutchens said in a statement. "We've entered 2022 with strong momentum and improved financials that will help fuel the growth of the business in the years ahead.”

Save A Lot's change in course also includes the appointment of a new chief executive from outside the company. Leon Bergmann, who will arrive at the retailer Feb. 21 and has more than two decades of experience in the grocery and wholesale industries, is taking over from interim CEO Craig Herkert. Herkert assumed the role last July after Save A Lot's previous leader, Kenneth McGrath, left the retailer to return to Lidl.

Save A Lot is also engaged in an advertising campaign designed to draw consumer attention to its low prices and brightened stores. The effort, launched last summer, features a music video intended to help the chain distinguish itself from "the sea of sameness that's taken over the industry as of late."

The company has also retooled its logo and developed updated packaging for more than 55 private label brands to add "vivid color and personality."