Supervalu to shutter 60 stores to cut costs

Faced with stiff competition from big-box retailers, traditional grocery chains are struggling to survive. Here's the list of stores that will close.

By Jonathan Berr Sep 6, 2012 11:31AM
Image: Grocery clerk (Corbis/SuperStock)Faced with fierce competition from such larger rivals as Wal-Mart (WMT) and Target (TGT), Supervalu (SVU), the third-largest grocery chain, will shutter 60 stores in a cost-cutting move. Shares of the Eden Prairie, Minn., company rose on the news.

Supervalu is planning to close 27 Albertsons stores -- the bulk of which are in Southern California -- 22 Save-A-Lots and 4 Acme stores. The list of closures is below. Most of these stores are expected to close before Dec. 1, the end of the company's fiscal 2013 third quarter. The company expects to record a pre-tax charge of $80 million and $90 million.

Since I live in the Philadelphia area, I am particularly interested in the Acme stores, a 117-store chain whose roots date back to 1891. Acme, or as locals pronounce it, "the Ack-a-me," is as much a part of the region as the Liberty Bell, Rocky and Tastykakes. Unfortunately, it has been in decline for a long time. My wife and I cut back on our Acme purchases when Target began offering groceries. We also patronize Costco (COST), and found that the prices at these larger rivals are usually far cheaper than Acme. They are also much more pleasant places to shop. Last year, Acme laid off 900 part-time workers.

The Acme near my home has skated on thin ice for years, but managed to escape the axe Thursday. One of the workers there once told me as much when she was assisting me with my groceries. The employee said that Acme wanted to be known for its service. Clearly, she was worried about her job, and with good reason. Her store is in a blue-collar area that has seen better days. 

My experience is not unique. Supermarkets accounted for 66% of grocery sales in 2000. The figure today is 51%, according to UBS. Supervalu's struggles will continue for a while and the future seems especially bleak for Acme.

No. 2 chain Safeway (SWY) is in a similar position. The Pleasanton, Calif., company, which is planning an IPO of its gift-card business, reported disappointing quarterly results in July. But Kroger (KR), the largest chain, seems to be holding its own. The company is set to report quarterly results Friday and analysts are expecting revenue to grow a respectable 4.8%.

Investors are not too enthused about Kroger, however. Shares of the Cincinnati company are down more than 5% this year. Safeway is off about 21% and Supervalu has slumped more than 71%.

Here are the Supervalu stores that will close:

California Albertsons
Mesmer & Jefferson, Culver City (already closed)
7th & Redondo, Long Beach
Harbor & Garden Grove Blvd., Garden Grove
Harbor Blvd. & Imperial Hwy., Fullerton
Dale & La Palma, Buena Park
Brookhurst & Katella, Anaheim
Baldwin Hills, Los Angeles
Central & Chevy Chase, Glendale
Devonshire & Reseda, Northridge
Van Nuys & Sherman, Van Nuys
Bear Valley & Amethyst Roads, Victorville
Pigeon Pass & Ironwood, Moreno Valley
Colima & Fairway Drive, Rowland Heights
Hamner Ave & Hidden Valley Pkwy., Norco
Grove Ave & Walnut Street, Ontario
Limonite & Clay, Riverside
Colima Road, Hacienda Heights
Amar & Nogales, Walnut
Azusa & Cypress, Covina

Oregon Albertsons
La Grande
Corvallis

Washington Albertsons
North Marysville
Juanita, Kirkland
Benson & 208th, Kent
Lacey
North Auburn, Auburn
Bonney Lake, Sumner

Acme stores
545 West Trenton Ave, Morrisville, Penn.
1130 Chester Pike, Sharon Hill, Penn.
731 North Delsea Drive, Glassboro, N.J.
1169 Shopping Center Road, Stevensville, Md.

Jewel-Osco stores
Michigan City, Ind.

Save-A-Lot stores
S. Eufaula Rd., Eufaula, Ala.
2252 Mount Meigs, Montgomery, Ala.
1548 S. Hwy 231, Ozark, Ala.
E. Battle Street, Talladega, Ala.
69044 Palm Canyon, Cathedral City, Calif.
525 Bankhead Hwy, Carrollton, Ga.
3157 Elm St. NE, Covington, Ga.
2324 Lake Harbin Rd., Morrow, Ga.
Watson Blvd, Warner Robins, Ga.
148 W 79th Street, Chicago, Ill.
6858 S. Aberdeen Street, Chicago, Ill.
6250 Raytown Tfcwy, Raytown, Mo.
200 Gateway, Cottage Grove, Ore.
S. Santiam Hwy, Lebanon, Ore.
6828 SE Foster, Portland, Ore.
17420 SE Division St, Portland, Ore.
4223 Main, Springfield, Ore.
1218 West 6th St., The Dalles, Ore.
1700 Mile Hill, Port Orchard, Wash.
9820 Pacific Ave., Tacoma, Wash.

--Jonathan Berr is long Target.  Follow him on Twitter@jdberr.

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