Supervalu Inc. is in a food fight with Wal-Mart in St. Paul, accusing the retailing behemoth's University Avenue store of violating its lease by offering too many grocery items.

The Eden Prairie company sued last week, along with landlord DDR MDT Midway Marketplace, alleging that Wal-Mart is using more than 7,500 square feet of its space at the Midway Marketplace shopping center to sell groceries. Supervalu's Cub Foods also has a store at the University Avenue center.

Supervalu and DDR say Wal-Mart's lease limits food sales at the store to 7,500 square feet and 10 percent of shelf space. In the suit filed in Ramsey County District Court, Supervalu said Wal-Mart may be over the 10 percent mark, too.

Wal-Mart denied the accusations. "We believe the sales of the St. Paul store are appropriate, allowed and authorized under the lease," said Greg Rossiter, a Wal-Mart spokesman.

Arkansas-based Wal-Mart is the nation's largest grocery retailer. Its Supercenters, which include full-scale grocery stores, have for years been eating into the business of traditional supermarket companies like Supervalu.

But Wal-Mart has also been adding grocery offerings at its conventional stores over the past five years or so, said Charles Cerankosky, a supermarket stock analyst at Northcoast Research. "It's a part of their overall strategy."

Since opening in 2003, the Midway Marketplace Wal-Mart -- as is typical of conventional Wal-Mart outlets -- has sold some grocery items, Supervalu acknowledges in the suit. But Wal-Mart has recently made modifications to the Midway store, and Supervalu alleges that it is now over its food sale limits.

Supervalu and DDR also allege that Wal-Mart is violating its lease by selling fresh-baked goods, frozen meat and various dairy products at the Midway Marketplace outlet.

On May 3, DDR gave Wal-Mart written notice that it was in default of its Midway Marketplace lease, the suit says. DDR demanded that Wal-Mart immediately reduce space devoted to food and stop selling fresh-baked goods, frozen meat and dairy products.

Mike Hughlett • 612-673-7003