Capital spending is projected to be approximately $700 million, which will include 65 to 70 major store remodels, 25 to 30 minor remodels, opening three new traditional supermarkets and 45 to 55 new limited assortment stores, including 30 licensed stores. However, it still plans to close 25 stores annually. The decision to cut capital expenditures was driven by inadequate returns on new and renovated stores, said Craig Herkert, the company's new CEO.
"Our focus is on execution, not on the physical condition of our stores," Herkert said.
In addition, the company has agreed to sell 36 Albertsons units, the majority of its presence in Utah, to Associated Food Stores, which will rename the stores. In the state, Supervalu retains and continues to operate three stores in St. George and is looking for buyers for two Albertsons units each in Orem and West Jordan.
Net sales were $12.7 billion, down from $13.3 billion in the first quarter 2009. Identical-store sales were down 3.2%. Net earnings were $113 million, vs. earnings of $162 million in the year-ago period.
Supervalu has 2,500 retail grocery locations, including nearly 900 in-store pharmacies.
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