Minnesota-based Supervalu Inc. said Wednesday it plans to close 60 underperforming stores nationwide including eight in the Puget Sound area. Five of those eight are in the South Sound.
Among those stores are Save-A-Lots at 9820 Pacific Ave. in Tacoma and in Port Orchard. The Save-A-Lot at 1105 Martin Luther King Jr. Way in Tacoma’s Hilltop business district will remain open, said Save-A-Lot spokeswoman Chon Tomlin.
The chain will also close Albertsons supermarkets in Lacey, Sumner, Auburn, Kent, Marysville and Kirkland, said Albertson’s spokeswoman Lilia Rodriguez. The workers in those stores, most covered by union contracts, will receive severance benefits or bumping rights to other stores as specified in their labor agreements.
The closure is an attempt by the Eden Prairie, Minn. grocery concern, the nation’s third largest, to turn around its struggling business.
“These decisions are never easy because of the impact a store closure has on our team members, our customers and our communities,” said Wayne Sales, Supervalu’s president, chief executive officer and chairman. “Today’s announcement reflects our commitment to move with a greater sense of urgency to reduce costs and improve shareholder value.”
The company’s first-quarter profits, reported in June, fell by half, and the company replaced CEO Craig Herkert with Sales. Sales had been serving as Supervalu’s chairman.
The nation’s traditional large grocery chains such as Supervalu have been faced with new competition from discount chains such as Walmart and Target and even drug stores that now are offering convenience store-sized grocery sections in their stores.
Supervalu’s Tacoma distribution center is not expected to be affected by the closures.
The company says it expects the store closures to result in a noncash, pre-tax charge of $80 million to $90 million for its fiscal 2013. The closures are expected to generate $35 million in cash in the next year and between $80 million and $90 million in the next three years.
The 60 stores scheduled to close are a small fraction of the 4,400 stores Supervalu operates under half-a-dozen brand names across the nation.
Supervalu shares rose 2 cents to close at $2.26.
john.gillie@thenewstribune.com
253-597-8663
blog.thenewstribune.com/business
• UPDATE: Albertson's clarifies which four South Sound stores are closing
JOIN THE DISCUSSION | Register here
We welcome comments. Please keep them civil, short and to the point. ALL CAPS, spam, obscene, profane, abusive and off topic comments will be deleted. Repeat offenders will be blocked. Thanks for taking part — and abiding by these simple rules. A thorough explanation of rules of conduct can be found in our Terms of Service. If you have any questions, including why your comment may not be showing immediately after you submit it, be sure to visit the commenting FAQ.