What now, SuperValu?

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pseudo3d
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What now, SuperValu?

Post by pseudo3d »

With the rise of prominence of SuperValu when it created New Albertsons, and subsequent fall (ruining a good bit of the Albertsons brands, many markets, and bigg's, the hypermarket), what will be SuperValu's future? I read most recently that they are trying to spin off Sav-a-Lot, which was odd as I thought that was a large part of their remaining bread and butter.

There's slightly more recent news that they sold off another half dozen County Market stores to an independent operator (who will continue to operate 'em), but I'm curious as to what SuperValu's end game is. Thanks to the spoils from the Albertsons buyout, like Wild Harvest, they now have a semi-decent store brand selection, but their distribution network is questionable (who, exactly, are their customers again?) and they've been seemingly just shutting down things.

Personally, I think that their best move is to stick with Cub Foods (which still makes money and is their best chance right now) and run it like a local supermarket (after all, SVU is also Minnesota based), while selling off Shoppers Food & Pharmacy (which I heard ran into trouble as SVU tried to make it more upscale) and Farm Fresh, as well as Shop N Save.
wnetmacman
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Re: What now, SuperValu?

Post by wnetmacman »

pseudo3d wrote:There's slightly more recent news that they sold off another half dozen County Market stores to an independent operator (who will continue to operate 'em)
If you're referring to Covington Foods in Indiana/Illinois, they weren't owned by Supervalu, only supplied by them. And the operator that bought them (Niemann Foods) has had their eye on those 6 stores for a long time, because they operated stores all the way around that group.

Supervalu has tried many times to operate stores, but has only been successful in supplying them. They should stick to that.
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Re: What now, SuperValu?

Post by pseudo3d »

wnetmacman wrote:
pseudo3d wrote:There's slightly more recent news that they sold off another half dozen County Market stores to an independent operator (who will continue to operate 'em)
If you're referring to Covington Foods in Indiana/Illinois, they weren't owned by Supervalu, only supplied by them. And the operator that bought them (Niemann Foods) has had their eye on those 6 stores for a long time, because they operated stores all the way around that group.

Supervalu has tried many times to operate stores, but has only been successful in supplying them. They should stick to that.
I don't know, until post-Albertsons, I had heard that bigg's was run okay, though SuperValu and the initial partners were never successful in expanding the format. The Albertsons acquisition clearly wasn't working out, though I remember reading an article that made NAI impossible to integrate with the rest of their stores (not the existing line-up were big winners).

SuperValu seems to want to keep Cub Foods even in the face of Hy-Vee's invasion, but unless they want to make that the core business (which is plausible), they should consider selling it off to a bigger fish (Kroger or Albertsons)
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Re: What now, SuperValu?

Post by storewanderer »

SuperValu's original stores are/were actually not bad. I've been to Shoppers in DC and Shop N Save in MO and they are okay stores. I felt Shoppers in DC was better; seemed to have a stronger mix and better pricing going on, and busier stores. Shop N Save in MO ran clean stores, okay pricing, okay quality... Schnucks just seemed to have a lot more depth of product mix, higher quality perimeter, and nicer looking stores and Shop N Save felt lost despite that there wasn't anything explicitly wrong with the stores, but nothing really good about them either.

I'm very curious about Supervalu's two corporate owned stores in Washington under the County Market banner that were divested in the Safeway/Albertsons merger. Also, that they did not go after any stores in the Haggen mess makes me question their commitment to have two corporate owned stores in Washington so far from the others. They could have justified buying some of the Haggen Stores in an effort to keep that supply business.

With talk of spinning off Save a Lot and losing the Albertsons wholesale/private label supply business I am starting to wonder what exactly are the customers Supervalu has left?
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Re: What now, SuperValu?

Post by pseudo3d »

Much of the Save-a-Lots are already franchised, spinning off the rest probably comes with still supplying them, and of course, the centers went back with Albertsons. The 2012 factbook of SVU (still up somewhere on the web, found it earlier this week) shows SVU-supplied stores heavily concentrated in the Eastern United States (most of those definitely not Albertsons-owned stores).
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Re: What now, SuperValu?

Post by bm10k »

As I am now employed by SuperValu through Hornbacher's I can Tell you that it's the only division that is doing well they just opened 2 new stores within the past year (new built store in Moorhead and an acquired store in Grand Forks)
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Re: What now, SuperValu?

Post by pseudo3d »

bm10k wrote:As I am now employed by SuperValu through Hornbacher's I can Tell you that it's the only division that is doing well they just opened 2 new stores within the past year (new built store in Moorhead and an acquired store in Grand Forks)
SuperValu was in the news again as part of a wave of retailers hit with problems regarding deflation. Unlike Sprouts and Kroger who are doing well otherwise, SuperValu isn't, and things are deteriorating at SVU. With SuperValu's new CEO wanting to go back to wholesaling, it seems now is the crunch time for SuperValu and its chains, they need to recommit and save them or sell them off when they still have value. I wonder if Kroger would be interested in Cub Foods.
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Re: What now, SuperValu?

Post by storewanderer »

I don't know who Supervalu will sell wholesale to. Their customer base has been shrinking as more and more small regionals go away. Haggen was a supposed addition in OR/WA and now that is no longer going to be buying from SVU. Albertsons will stop using SVU as the agreements run out in the coming years. SVU needs to go find more customers.
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Re: What now, SuperValu?

Post by marshd1000 »

As for Supervalu and Haggen, I am under the impression that the original stores never really had shifted over to Supervalu. When I had been in a legacy Haggen, I saw the typical mix of Haggen brands, Topco/Top Care/Food Club and Western Family. When I see that, it tells me that, it lets me know that the store was probably had the majority of their supplies come from Unified. During the ill fated Haggen expansions, the acquired stores in the Northwest had mostly been supplied by Supervalu, with the legacy stores to follow.
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Re: What now, SuperValu?

Post by pseudo3d »

SuperValu's return to wholesaling isn't going to work, they can't just pretend NAI never happened. To me, getting rid of Save-a-Lot is a huge mistake for both companies. SAL wants to expand but if a spin-off sticks them with a bunch of debt, that's not happening, and SVU raising cash off of SAL will end up getting burned if they let their traditional retail operations sink in their markets. The wholesale route might work if they cultivate good relationships with viable small local chains (like Associated), but SuperValu hasn't shown much progress in that regard. Good luck to Cub Foods, et. al., they're going down with the ship.
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