Leading grocery chain
) is cutting its headcount by 1,100. This follows the sale of
five of its supermarkets as a part of its strategic initiatives
to streamline operations and increase efficiency across its three
lines of business.
The labor force reduction is to be spread over nearly all of the
company's offices and department stores. While several current
positions will be eliminated, Supervalu has stated that several
open positions will not be filled up as a part of this layoff
The store level and Save-A-Lot section of employees are exempt
from the current work force reduction program of the company.
Management commented that only redundant workers are to be
retrenched for a pared-down company. It expects that the move
will help Supervalu remain more focused and also maintain
As a part of broad-based strategic alternatives, Supervalu will
sell Albertson's, Jewel-Osco, Acme, Shaw's and Star Market
chains, all of which combined come to about 877 stores. These go
to private equity firm Cerberus Capital Management LP, for $3.3
Only three business units, namely, Independent Business,
Save-A-Lot and five strong regional retail banners remain with
Management commented that it wanted to streamline its operations
in order to focus on Save-A-Lot discount stores, as well as its
smaller regional chains - Cub, Farm Fresh, Shoppers, Shop 'n Save
Earlier this month, Supervalu reshuffled its management team.
Michael Moore, the present chief marketing officer, was replaced
by Mark Van Buskirk, from Supervalu's rival grocery chain
The Kroger Company
). He has taken up the responsibility of executive vice president
of merchandising and marketing in the company.
The restructuring also brought in two new entrants: Randy
Burdick (former chief information officer at
]) as executive vice president and chief information officer, and
Michele Murphy as executive vice president, human resources and
corporate communications in its executive team.
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SUPERVALU INC (SVU): Free Stock Analysis
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Supervalu's third-quarter earnings dropped below year-ago levels
and also missed estimates for the quarter. Moreover, the company
reported negative identical store sales successively for the past
four years. The trend has continued in the first half of fiscal
Now, in order to combat four successive years of negative
identical store sales and re-position the company for growth,
Supervalu intends to expand its private brand portfolio and step
up cost-reduction initiatives.
These are expected to reduce administrative and operational
expenses by an additional $250 million by fiscal 2014.
We believe that the reduction of its workforce and executive
management turnaround could prove beneficial to Supervalu's
bottom line. The U.S. government's decision not to furlough
United States Department of Agriculture (USDA) meat inspectors is
a positive not just for Supervalu (because it ensures continuous
supply of meat products to the grocery chain), but also for meat
Sanderson Farms Inc.
Currently, Supervalu carries a Zacks Rank #3 (Hold).