Event Brief of Q3 2003 Supervalu Inc. Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

CORPORATE PARTICIPANTS

. Yolanda Scharton, SUPERVALU INC., VP, Corporate Communications,

Investor Relations . Jeffrey Noddle, SUPERVALU INC., Chairman, President, CEO . Pamela Knous, SUPERVALU INC., EVP, CFO

OVERVIEW

Although hurt by costs incurred closing Denver operations as well as a St. Louis strike, SVU reported 3Q04 net sales of $4.7b and net earnings of $48.6m. Mgt. maintained its FY04 EPS guidance of $2.04-2.10 per share, with earnings in 4Q04 expected to be $0.67-0.73 per share. FY05 is expected to be in the range of $2.30-$2.45. Q/A Focus: Retail Distribution

FINANCIAL DATA

A. Key Data From Call 1. 3Q04 Net Sales = $4.7b 2. 3Q04 Net Earnings = $48.6m. 3. 4Q04 EPS = $0.67-0.73 4. FY04 EPS = $2.04-2.10 5. FY05 EPS = $2.30-2.45

PRESENTATION SUMMARY

S1. 3Q04 Business Highlights (J.N.) 1. 3Q was a landmark quarter; initiatives had advanced ability to improve sales, earnings, and return on investment capital. 2. Net sales = $4.7b and net earnings = $48.6m. 1. Diluted EPS = $0.36, including $0.16 per share with costs associated with previously announced events, including sale and exit of Denver operations, early bond redemption, taxes

due for C&S asset exchange, and the 28 day St. Louis strike.

2. Earnings results included restructure and other charges of

$0.03 per share associated with employee benefit related

costs. 3. Underlying strength of core business evident across the board. 1. Strong retail sales performance with comp sales performance of 3%, including strike impact. 2. Excluding the strike impact, 4.3%. 3. Return to historical profitability in distribution.

4. Assimilation of new business drove productivity levels. 4. Co. disposed of 2.9m sq. ft. of underperforming assets with exit

of New England and Denver operations. 1. Progress in new service logistics business platform and continued reduction in debt levels, with debt-to-cap ratio of 47.5%. 5. Business strategy has remained constant: focusing on core strengths in retail and logistics as well as efficient mgt. of existing assets.

S2. 3Q04 Business Accomplishments (J.N.) 1. In retail, top-line sales grew by 6.5%; driven by comp sales growth and new store openings.

1. Comparable store sales growth = 3%; excluding the strike

impact, sales growth = 4.3%. 2. Continued positive comp store sales at Sav-A-Lot, enhanced by dollar general merchandise.

3. Conversion of Baltimore Metro banner to Shoppers Food Warehouse is perfect example of investing in key markets to drive comp sales performance. 2. Co. also had good sales performance and momentum in Minnesota, where there was a month-long celebration of Cub Food's 35th anniversary. 1. Store network is now nearing 60 stores in Minnesota. 3. In anticipation of Hurricane Isabel, Farm Fresh operation in Virginia delivered best-in-class service. 4. Commitment to store remodel program has contributed to comp

sales performance in quarter. 1. As of 3Q, approx. 80% of regional banners are new or newly remodeled in the last seven years.

2. Co. expects to complete a total of 50 remodels this year.

3. Comps were also aided by the elimination of underperforming

Denver store comps. 5. Co. saw some modest inflation during the quarter, slightly above 1% on market basket of goods. 6. 4Q comps = 1-2%, while still absorbing approx. same level of in-market store expansion impact. 7. During quarter, co. opened new stores.

1. YoverY net sq. ft. grew 1.1%. 2. Sq. ft growth includes impact of exit from Denver market. 3. Excluding these nine stores, net sq. ft. increased 3.1%. 8. Save-A-Lot sq. footage including licensees grew approx. 7% YoverY.

S3. 3Q04 Store Network Overview (J.N.) 1. Total retail store network including licensees increased by 77 stores, reflecting the addition of 88 Extreme Value stores. 1. Partially offset by a reduction in regional banner stores, again primarily reflecting the exit of the Denver market. 2. Co. is on track to open approx. 85 new limited assortment stores and 8 regional banner stores this year. 2. Save-A-Lot continues to accelerate the mix of combination stores to the overall store network through new store growth and

conversions of existing stores. 1. As of the end of 3Q, co. has 169 combination food and general merchandise stores in the extreme value retail niche including licensees. 2. That represents an increase of 70 combination stores, new or converted, since 2Q. 3. Since last year, co. has added 153 combination stores, new or converted, to the network. 3. Since general merchandise strategy began, co. has tested and evaluated a number of combination store formats. 1. Pleased with results and will focus on both Save-A-Lot branded and Deal$ branded combination stores avg. 15,000 sq. ft. 2. Majority of new storing in FY05 will be back-filling existing

markets to fully leverage existing infrastructure.

S4. Distribution Business Overview (J.N.) 1. Co. pleased with business momentum within distribution business, which reflects both improved productivity and volume throughput across the entire network.

1. Sales in 3Q grew by 1.7% to $2.3b, and operating earnings as a percent of sales was 2.6%, up 70 bp from last year. 2. Performance was driven by the consolidation of newly-affiliated and acquired volume into existing facilities. 3. Efficiency initiative implemented during the course of the prior year continued to drive metrics this year. 2. Co. quickly absorbed Fleming's Midwestern operations acquired through asset exchange with C&S. 1. Efforts were not unlike addition of approx. $600m of annualized affiliated business primarily from Fleming that was gained earlier in the year. 2. Co. began to immediately service new retailers through own facilities and absorbed inventory …