Despite this move, Supervalu is committed to retail operations as a core element of the company's new platform for growth, says Jeff Noddle, Supervalu president, chief operating officer, and incoming chief executive officer. The company plans to grow retailsquare footage by about 5% for the current fiscal year.
Supervalu is ramping up the growth of Save-A-Lot -- the company's limited assortment chain -- by adding another 100 to 120 new stores this year. The company also will open 10 to 15 price superstores in unspecified key retail markets.
In addition, the company is substantially increasing remodeling activity across its retail network, including upgrading stores throughout its Cub superstore chain in Illinois and Wisconsin. This move "leverages our position within key markets and shouldhelp generate quick and profitable growth," Noddle says.
Supervalu will close its 19-store Laneco group of supermarkets and supercenters, operating in the Lehigh Valley area of Pennsylvania and New Jersey, and 11 Cub Foods stores in central Indiana, seven of which are in Indianapolis. Supervalu is working with a number of potential buyers, both food retailers and non-food retailers, for the affected stores. The stores are expected to close in the next 30 to 60 days. The closings will affect about 2,250 Supervalu employees.
"By concentrating on markets where we have the best opportunity to succeed and by improving overall returns, we are building a stronger retail organization that will generate long-term growth and improved shareholder value," Noddle says.
Supervalu operates a total of 1,194 stores including licensed locations. At year end, Supervalu operated 207 price superstores under the Cub Foods, Shop 'n Save, Shoppers Food Warehouse, Metro and bigg's banners; 905 limited assortment stores, including 727licensed locations that operate under the Save-A-Lot banner; and 82 other supermarkets, including Farm Fresh, Laneco, Scott's Foods, and Hornbacher's stores.
Supervalu also serves as primary supplier to about 3,200 supermarkets and 55 Cub Foods franchised locations, while serving as secondary supplier to about 2,250 stores.
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