Supervalu to close stores, offer unpaid time off

  • Article by: MIKE HUGHLETT , Star Tribune
  • Updated: January 6, 2011 - 9:37 PM

Supervalu Inc. announced this week that it's closing 20 underperforming grocery stores nationwide, while the struggling supermarket chain hopes to save money by allowing some employees to take unpaid vacation.

Eden Prairie-based Supervalu, which has more than 2,000 retail outlets nationwide, will close 20 unprofitable stores in chains primarily centered on the East and West coasts. Supervalu's Cub Foods, the Twin Cities' largest grocery chain, is not affected by the closures.

Also, just before Christmas, Supervalu informed corporate and office employees that they could take unpaid leave -- with their manager's consent -- through Feb. 26, the end of Supervalu's fiscal year, spokesman Mike Siemienas said.

No one is being required to take time off, he said.

Supervalu, while profitable, has suffered 10 consecutive quarters of declining same-store sales, the result of a weak economy and intense competition. And the forecast is still cloudy, according to two stock analyst reports issued earlier this week.

Morgan Stanley downgraded Supervalu to "Underweight," questioning the company's shift in strategy to cut prices to get more in line with its peers at the same time food inflation is rising.

BMO Capital Markets lowered its price target on Supervalu's stock due to the "challenging environment and [Supervalu's] inability to drive traffic."

Supervalu shares closed down 1 cent at $9.20, compared with about $17 last spring.

Mike Hughlett • 612-673-7003

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