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updated: 3/27/2013 6:41 AM

Supervalu eliminating about 1,100 positions

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  • Supervalu is eliminating about 1,100 positions nationwide less than a week after the supermarket operator completed the sale of five of its grocery chains, including Jewel-Osco.

      Supervalu is eliminating about 1,100 positions nationwide less than a week after the supermarket operator completed the sale of five of its grocery chains, including Jewel-Osco.
    DAILY HERALD

 
Associated Press

NEW YORK -- Supervalu is eliminating about 1,100 positions nationwide, or about 3 percent of its workforce, less than a week after the supermarket operator completed the sale of five of its grocery chains.

The company said Tuesday that sale of the five grocery chains -- including Jewel-Osco -- means that the remaining business will need "significantly fewer" corporate and store support roles and functions.

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Supervalu has struggled for years to turn around its business. The broader supermarket industry has been facing growing competition from big-box retailers such as Target, drugstore chains and dollar stores. While bigger chains such as Kroger Co. have adapted by tweaking store formats and improving discount programs and product offerings, Supervalu has scrambled to keep pace.

The reductions at Supervalu will include current jobs and open positions that won't be filled. The job eliminations will occur at nearly all company offices and across most departments.

But store-level employees and the Save-A-Lot chain are generally not affected by the reductions, with more emphasis on corporate and store support center offices.

Supervalu has about 3,470 stores in the U.S. and approximately 35,000 employees. The company said that the final working dates for employees whose positions are being eliminated will vary, as it depends on the needs of the business and the areas they support. Those workers whose jobs are eliminated will be offered severance and outplacement services.

President and CEO Sam Duncan said in a statement that it was a difficult decision for the company to make, but a necessary step toward rebuilding the business.

"This move is an important part of our strategy to be more focused and efficient in our operations, including how we staff and support our three business units going forward," he said.

Supervalu shares fell 26 cents, or 5.2 percent, to $4.79 in premarket trading.

On Thursday Supervalu completed on the sale of Albertson's, Jewel-Osco, Acme, Shaw's and Star Market to an investor group led by Cerberus Capital Management. Supervalu announced the sale in January, at which time it said that after the sale it would focus on its Save-A-Lot discount stores, as well as its smaller regional chains Cub, Farm Fresh, Shoppers, Shop `n Save and Hornbacher's. It will also keep its wholesale business that distributes groceries to stores.

As part of the deal, the investor group agreed to pay $100 million in cash for the stores, and assume $3.2 billion in existing debt. Cerberus also offered to buy up to 30 percent of what's left of Supervalu for $4 per share after the deal closed.

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