GloucesterTimes.com, Gloucester, MA

Top Stories

January 11, 2013

Shaw's stores sold aid Supervalu deal

NEW YORK — Supervalu Inc., the parent company of Shaw’s Supermarkets, is selling off five of its grocery chains, including Shaw’s and Albertson’s, after years of being squeezed by intensifying competition.

The nation’s No. 3 traditional supermarket operator announced Thursday that the sale of 877 stores to an investor group led by Cerberus Capital Management will also include Albertson’s, Acme, the Jewell-Osco pharmacy chain, and Star Market. Cerberus already owns about 200 Albertson’s in the South and Southwest.

Following the sale, Supervalu will focus on its Save-A-Lot discount stores, as well as its smaller regional chains Cub, Farm Fresh, Shoppers, Shop ‘n Save and Hornbacher’s. It will also keep its wholesale business that distributes groceries to stores.

The investor group will pay $100 million in cash for the stores, and the new company will assume $3.2 billion in existing debt. Cerberus will also offer to buy up to 30 percent of the remaining Supervalu for $4 per share after the deal closes.

There was no word Thursday on what the pending deal will mean for any of the chains, including the Shaw’s string of superarkets that include two stores in Gloucester — one on Railroad Avenue and the other off Eastern Avenue. Both Gloucester stores have continued to operate despite the intensified competition brought on by the 2009 opening of the Market Basket as an anchor to Gloucester Crossing, nestled just a mile from the Eastern Avenue Shaw’s.

A representative for the buyers noted that the transaction is still subject to approvals and declined to say whether any job cuts were planned for the newly acquired Albertson’s, or whether the other chains would retain their current names.

Supervalu has struggled for years to turn around its business. The broader supermarket industry has been facing growing competition from big-box retailers such as Target, drugstore chains and dollar stores. While bigger chains such as Kroger Co. have adapted by tweaking store formats and improving discount programs and product offerings, Supervalu has scrambled to keep pace.

Text Only | Photo Reprints
Top Stories

Pictures of the Week
Your news, your way
AP Video
Raw: 2 Shells Hit Fuel Tank at Gaza Power Plant Raw: Massive Explosions From Airstrikes in Gaza Giant Ketchup Bottle Water Tower Up for Sale Easier Nuclear Construction Promises Fall Short Kerry: Humanitarian Cease-fire Efforts Continue Raw: Corruption Trial Begins for Former Va Gov. The Carbon Trap: US Exports Global Warming UN Security Council Calls for Gaza Cease-fire Traditional African Dishes Teach Healthy Eating 13 Struck by Lightning on Calif. Beach Baseball Hall of Famers Inducted Israel, Hamas Trade Fire Despite Truce in Gaza Italy's Nibali Set to Win First Tour De France Raw: Shipwrecked Concordia Completes Last Voyage Raw: Sea Turtle Hatchlings Emerge From Nest Raw: Massive Dust Storm Covers Phoenix 12-hour Cease-fire in Gaza Fighting Begins Raw: Bolivian Dancers Attempt to Break Record Raw: Israel, Palestine Supporters Rally in US Raw: Air Algerie Flight 5017 Wreckage