Supervalu Cutting 2,500 More Jobs in Albertson's Stores

I've posted a couple of previous stories about layoffs in the Supervalu grocery chain, but this is the biggest one yet. Bloomberg has the details:

Supervalu Inc. (SVU), the third-largest U.S. grocery store chain, plans to eliminate as many as 2,500 positions at its Albertsons unit.

The reductions, which represent about 13 percent of staff across all 247 Albertsons stores in California and Nevada, will begin the week of June 17 and should be completed near July 1, according to a statement today. Albertsons is the biggest retail chain in Supervalu’s family of grocery stores.

Supervalu, which also operates the Shaw’s and Shop ‘n Save chains, is cutting costs while expanding its private-label brands. The retailer is lowering prices on some food to draw customers from discounters including Wal-Mart Stores Inc. (WMT) The company reduced prices by as much as 20 percent on about 200 produce items earlier this year.

“They’re just in a bad cycle,” Scott Mushkin, a New York- based analyst at Jefferies & Co., who recommends holding the shares, said in an interview. “When your sales are declining you need to cut expenses, so you start cutting store labor.”

While reducing workers may help in the short run, it “further hampers sales” long term, Mushkin said.

Supervalu slipped 0.9 percent to $4.49 at the close in New York. The shares have dropped 45 percent this year.

As of February, Supervalu had about 130,000 employees, according to regulatory filings. Revenue at the Eden Prairie, Minnesota-based company has declined for three straight years and is projected to fall 2.4 percent to $35.2 billion in its fiscal 2013, according to data compiled by Bloomberg.
“A decision of this nature is never easy, but it is the necessary step for us to take to help improve our business and accelerate our turnaround,” said Dan Sanders, president at Albertsons Southern California division.

Love that quote from Jefferies & Co. analyst Scott Mushkin. Notice how there is no suggestion that the chain might instead cut the pay of the CEO and the other idiots in senior management who are driving the company into the ground? Perish the thought.

Albertsons Closing 13 Florida Grocery Stores, 1,100 To Be Laid Off

There have been an awful lot of grocery store closings during the past year since I started doing this blog. Here is the latest such story from the Bradenton Herald:

Albertsons grocery store chain is closing 13 stores in Florida including its Manatee Avenue location in Bradenton and its Lockwood Ridge Road location, leaving only four stores operating in the state.

An estimated 1,100 employees will be affected, said Albertsons Public Affairs Director Christine Wilcox. Of those, 77 are located in the Manatee Avenue store, which has been operating since 1982.

"We've had to make a strategic decision in Florida to go with the stores that are doing the best," Wilcox said. The four remaining stores are located in Clearwater, Altamonte Springs, Oakland Park and Largo.

So, you "had to go with the sores that are doing the best?" You mean the mere four out 17? Sounds to me like the other four won't be around for that much longer either.


Bonus: They just keep them hanging on

Buying Generic Groceries Doesn't Save Shoppers As Much As It Used To

Here is an interesting story from the Consurmerist about the effects of the Great Recession on American grocery shopping habits:

Used to be, back in the days of yore, shoppers looking for a deal in the grocery store could go for a generic store brand item instead of the more expensive name brands. But lately the gap between those two options has been narrowing, to the point where store brands sometimes even cost more than their previously pricier counterparts.

Many consumers turned to the tactic of store brands during the recession, to the point that now, a lot of us actually prefer our generic items for the basics at the grocery store and have become loyal to those brands instead.

According to the Wall Street Journal (via Time), stores have caught on and are raising the prices of their private-label goods, to the tune of 5.3% on nonperishables and a whopping 12% for perishables. Name brand prices aren't rising at the same pace, at only 1.9% and 8% on those respective categories, but still cost on average about 29% more than generic brands.

Stores have caught on and updated their boring, bland brand labels and created more exciting, attractive packaging for their products. And they're not afraid to price those items above their name brand counterparts. For example, Target's Archer Farms line of snacks and drinks are easily recognizable and loved by customers for their pretty logos and familiar branding.

So, it will probably just be a matter of time before some company starts marketing a GENERIC generic line of grocery products. No wonder long time beloved brands like Hostess and Kraft are reeling these days.


Bonus: This song is so Low Budget that it's still on vinyl!

Supervalu Cutting 800 Corporate and Regional Jobs

Once in awhile, the corporate flacks really tie themselves up in knots with these layoff announcements Here is the Minneapolis -St. Paul Business Journal with the details:

Supervalu Inc. said Tuesday it is eliminating 800 jobs from its corporate and regional offices nationwide as part of its yearlong effort to cut costs and offer more competitive grocery prices.

Supervalu said in a news release the cuts include layoffs of current employees and open jobs that won't be filled. The grocer expects most of the cuts to be done by Feb. 25, the end of the company's fiscal year.

About 200 jobs are being cut at the company's Eden Prairie headquarters, representing about 7 percent of its headquarters staff.

So far, pretty standard stuff, but check this out:

"These reductions are necessary to help further strengthen and accelerate Supervalu's business turnaround in a very competitive marketplace," Supervalu CEO Craig Herkert said in the news release.

A month ago, Supervalu said its turnaround plan was still on course despite reporting a widening loss in the third quarter. Sales were down 4 percent for the quarter that ended Dec. 3.

There's only one thing proper reaction to that: Dooooooooh!

Food Lion to Close 113 Supermarkets, Lay Off Nearly 5,000

I found this story of interest primarily because most of the Food Lion locations in Northern Virginia seem to have already vanished. Clearly the chain is in deep trouble, as reported by a local television station in South Carolina:

The company that owns the Food Lion grocery store chain announced Tuesday that it will close 113 under-performing stores throughout the country, including 10 in the western Carolinas.

Delhaize America said its actions were to strengthen its American portfolio by closing under-performing stores in areas that do not have as many Food Lion stores, retire the Bloom banner, convert some of the remaining Bloom and Bottom Dollar Food stores to Food Lion stores while closing some of the underperforming ones.

The company said all affected stores will close within 30 days, and store conversions will begin immediately.

As a result of the closings, the company said approximately 4,900 associates will be without jobs. They said they will provide severance to eligible associates and will work with government officials to assist with transition support.

Yeah, Delhaize, because we all know that the way you "strengthen your brand" is by having less of it around. That was one of the lamer corporate FlackSpeak excuses I've read in awhile.

The trend these days seems to be a split between high end, fancy, yuppie catering supermarkets in wealthier areas and deep discount, generic product-selling supermarkets in poorer communites. Chains like Food Lion that cater to the middle between those extremes have been getting sqaushed. At least that is this layman's observation.


Bonus: Now it's the supermarket itself that is lost