Supervalu Inc. posted stronger than expected quarterly profit as cost cuts outweighed weaker sales, a sign the grocery chain, among the worst-performing food retailers since the 2008-09 recession, is making progress with a turnaround effort.

Identical-store sales fell 3.9% during the three months ended June 18, Eden Prairie, Minn.-based Supervalu said in a July 26 statement: That’s an improvement from a 5% decline in the previous quarter.

Supervalu posts better-than-expected profit amid cost cutsOver the past two years, Supervalu closed or sold about 100 locations and reduced the number of items offered per store as the grocer struggled to keep customers amid high unemployment and fierce competition from discounters such as Wal-Mart Stores.

Craig Herkert, Supervalu’s chief executive officer, said the company is on track to meet prior sales forecasts for the full year, noting that a “hyper-local” focus in its stores is paying off. Still, a weak job market and expensive gasoline continued to take a toll, Herkert said.

“It’s clear that consumer demand is being affected by a slowing economic recovery and high fuel prices,” Herkert said during a conference call following the release of quarterly results. That’s accelerated “trade-down,” as consumers sought cheaper foods, he said.

Supervalu said identical-store sales in the 12-month period that began in late February are expected to fall 1.5% to 2.5%, excluding fuel, from the previous year, Supervalu said, repeating a forecast from April.

By comparison, Kroger Co., the largest U.S. supermarket chain, in June said identical-store sales during its most-recent quarter rose 4.6%, excluding fuel, from a year earlier. Kroger expects identical-store sales to rise 3.5% to 4.5% this year. Identical-store sales are a closely-followed gauge of retailer performance and typically reflect locations open at least one year.

For the three months ended June 18, Supervalu’s fiscal 2012 first quarter, the company posted net income of $74 million, up 10% from $67 million a year earlier, according to the statement. Net sales fell 3.5%, to $11.1 billion.

Supervalu operates more than 2,300 U.S. stores under about a dozen branded retail chains, including Albertsons, Cub Foods, Jewel-Osco and Save-A-Lot.