Office workers of the struggling grocery giant Supervalu Inc. will see an end to merit pay, 401(k) matches and, for some, a shift from weekly to monthly paychecks, the company said in a letter to workers this week.
The changes take effect in early 2013 and are not expected to affect hourly store employees.
The cutbacks at Supervalu come after four years of falling grocery revenue and a stock price that has plummeted from $8 a share in January to $2.50 at Friday's close.
"As we have stated during our last two earnings calls, we need to immediately take costs out of the business in order to fund our growth plans. As a result, Supervalu today announced changes to team member compensation and benefits, as they are the largest administrative expense," said Supervalu spokesman Mike Siemienas.
Most of the changes will affect salaried office workers who perform administrative functions for Cub Foods, Jewel-Osco, Shaw's, Albertsons, Acme and other grocers.
Most benefit changes will not affect cashiers, stock workers and other store and union employees, Siemienas said.
Eden Prairie-based Supervalu has 125,000 workers nationwide, and roughly 80,000 of them are union members.
The company has 44 Cub Foods stores that it owns and operates in Minnesota. Another 26 franchise stores are not affected by the company's compensation changes, officials said.
In the letter sent to "All Supervalu team members," Dave Pylipow, company executive vice president for human resources, wrote that merit pay increases will end for all salaried workers and for those non-salaried workers in corporate and distribution offices.
Additionally, some salaried workers will see their paydays change from weekly to either biweekly or once a month. Hourly store workers won't see that change.
That relieved Jennifer Christensen, secretary-treasurer for Local Union 1189.
"We would certainly object if they went to a monthly pay system. When [workers] are living paycheck to paycheck, going to monthly pay would be impossible for folks to live on. They need their check on Friday so they can get gas to get to work on Saturday," she said.
Other changes might affect union workers, depending on their collective bargaining agreements.
Supervalu said it is discontinuing its employee anniversary award program and reducing company 401(k) matches for hourly store employees. Their match will be reduced from 5 percent to 3.5 percent, where allowed by the union contract.
However, the 401(k) match is being cut entirely for all salaried workers and for hourly workers in the corporate, support and warehouse offices.
Siemienas said that benefits will be continue to be evaluated against future financial performance.
The benefit cuts announced this week are the latest in a spate of changes for the struggling grocery chain that is exploring selling off pieces or all of its business.
Earlier this month, Supervalu said it was laying off 700 employees, or 4 percent of the workforce, at its Shaw's grocery chain in New England.
In September it said it is closing 60 stores nationwide, none of which are Cub Foods. In June, it announced 2,500 job cuts, or 13 percent of the workforce, at its Albertsons outlets in Southern California and Nevada. Albertsons is its largest chain.
Supervalu also cut at least 200 jobs at its corporate offices in Eden Prairie this year. Last year, it laid off 200 part-time employees at Cub and 900 at its Acme chain in the Philadelphia area.
Dee DePass • 612-673-7725