PORTLAND, Ore. -- Supervalu Inc., one of the nation's largest grocers, says it will revamp its strategy to draw consumers whose shopping habits may forever be changed.

After reporting another brutal blow to its bottom line, the company said it plans to double the number of Save A Lot discount stores it operates, cut prices in all its stores and reorganize its operations.

"Times are tough ... but we cannot and will not use the overall economy as an excuse," Supervalu CEO Craig Herkert said. "Supervalu must transform itself into a business that is customer-focused, dynamic and agile enough to meet the evolving needs of customers, whatever the environment. Clearly we have not done that recently."

Supervalu said weak consumer spending, deep discounts on top of lower prices that it passed along to consumers pushed its fiscal second-quarter profit down 42 percent.

The Minneapolis, Minn.-based company said it earned $74 million, or 35 cents per share, down from $128 million, or 60 cents per share, in the same quarter last year.

Revenue fell 7.5 percent to $9.46 billion.

"My sense is the American consumer's shopping habits have changed probably forever, certainly for a long time, and I don't think we are going to wake up in a few months and everybody will be back to 2006," said Herkert, a former Wal-Mart Stores Inc. executive who took the helm at Supervalu last spring.

Supervalu said shoppers came into its stores less often, bought fewer items, continued to trade down to less expensive items and clearly adhered to shopping lists and avoided discretionary purchases during the quarter.

Supervalu, whose chains nationwide include Albertsons and Jewel-Osco as well as Save-A-Lot, said it will return its focus to price-conscious consumers and being a neighborhood grocer.

The company will reevaluate which brands work in which markets, cut prices to draw customers, reduce inventory to control costs, make other internal cuts and emphasize its discount chain, Save-A-Lot.

Supervalu cut its dividend by half to free up cash for this retooling.

Herkert said fixing the company will take time and conditions will remain difficult, given the uncertain economy.

The company now expects to earn between $1.95 per share and $2.05 per share in 2010, compared with its earlier estimate of $1.95 per share to $2.15 per share.

"I'm being realistic when I say there is much need for improvement in our everyday execution; this will be a near-term imperative as we work on getting the basics right," Herkert told investors in a conference call.

The quarterly results beat the expectations of analysts polled by Thomson Reuters for 33 cents per share on revenue of $9.65 billion.

Shares of Supervalu rose 15 cents to $17.08 in early afternoon trading Tuesday.