Cub rebuilding damaged stores on Lake, Broadway; being spun off into stand-alone unit

The Cub Foods stores on Lake Street and Broadway Avenue, both damaged in the violence that followed the killing of George Floyd in Minneapolis police custody, will be rebuilt by the end of the year.

But starting July 8 on Lake Street and later in the month on Broadway, temporary structures in the parking lots will sell fresh produce, meat, dairy and dry goods, Cub Foods and franchisee Jerry's Foods were to announce on Friday. They also will include pharmacies.

"The thought all along was to rebuild," said Mike Stigers, chief executive of Cub. "We were never going to abandon our communities."

Both stores closed on May 28, three days after Floyd's death.

Stigers also confirmed that owner United Natural Foods Inc. (UNFI) plans to spin off the Cub and Shoppers supermarket chains into a stand-alone unit.

COVID-19 pandemic complicated plans to sell the two chains.

UNFI officials said in a conference call earlier this month that the company would not sell the chains for two years.

Because of the plan to sell the chain, some had speculated that Rhode Island-based UNFI might not rebuild the Minneapolis stores.

Stigers, though, said Thursday that UNFI "wants Cub to be the best it can be" to make it an attractive asset for potential buyers.

"In fiscal 2021-2022 we'll have remodels and potential new sites," said Stigers, although he wouldn't say how many new stores. He said he expects four to six locations to be remodeled per year.

"With the spinoff we can separate from UNFI systems and technology. With less dependency, we'll be doing more on our own as a stand-alone in the future," said Stigers.

The transition could take up to a year, he said.

UNFI executives made clear when they purchased Supervalu for $2.9 billion in 2018 that the company prefers to focus on the wholesale side of the business over retail.

Sales at the Cub stores have stayed strong after the sale and especially since the pandemic spread in the United States.

Cub still maintains the No. 1 market share in the Twin Cities, and its market share has even started to rebound in the last year as Hy-Vee, Aldi, Target and Costco nip at its heels, according to Nielsen.

"We're pleased with the cash being generated by Cub and happy to have the flexibility to sell Cub's owned real estate at a more advantageous time," said UNFI Chief Financial Officer John Howard during a conference call this month.

Cub operates 78 stores in Minnesota and one in Illinois. Shoppers has 24 stores mostly in the Washington, D.C., area.

Renovations on the Lake Street store should be completed by the end of the year. The Broadway store will likely reopen by early October, Stigers said.

The temporary structures will be 13,000 square feet, significantly smaller than the permanent structures, will be heated or cooled depending on the weather and will include a service desk. Curbside pickup will be available as well.

To help residents facing a food desert with stores such as Cub, Target and Aldi still closed after extensive damage, Cub will launch free, dedicated bus service at each location starting on Friday. Social distancing precautions will be taken.

At the 2850 S. 26th Av. location (just off Lake Street), buses will pick up shoppers and take them to the Quarry store at 1540 New Brighton Blvd.

Buses at the Broadway location will take customers to the Crystal store at 5301 N. 36th Av. Hours are from 10 a.m. to 6 p.m.

The Aldi store in the former Rainbow Foods on 26th Avenue will reopen in September, a company spokesperson said.

John Ewoldt • 612-673-7633