Supervalu Assesses Portfolio

So far, Supervalu executives has assessed about half of the stores acquired in the Albertsons deal, and they say that the rest will be evaluated by September. They have identified that they will close about 25 under-performing stores acquired in the transaction. Stores in the Albertsons chain the were acquired include units under the Albertsons, Acme Markets, Bristol Farms, Jewel-Osco, Shaw's Supermarkets and Star Market banners.

Supervalu's results for the first quarter ended June 17 did not include stores acquired in the Albertsons deal. Same-store sales across its 1,391units, including Cub Foods, Save-A-Lot and other chains, fell 1.8% year over year. Management blames heavy competition in the Cincinnati and Fort Wayne, IN, markets, for the drop.

Net retail sales also fell, to $2.9 billion, from $3.2 billion during the same period last year. The downturn was attributed to the sale of 26 Cub Foods stores in Chicago, 20 Shop 'n Save stores in Pittsburgh and 138 discount Deals units.

Meanwhile, Supervalu is opening 45 big-box and 35 small-format stores across its brands this year. The company also has 80 store remodels in its pipeline.

Executives say they expect same-store sales for the remainder of the year to come out flat, after slightly positive comps from the Albertsons units are factored in during later quarters. "I certainly expect us to be reporting improved comps over the next couple of years," Noddle says.