Supervalu To Lay Off 40 Shoppers’ Associates; Merchandising To Shift To Cub Foods

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Two months after Supervalu announced it would close or sell its Farm Fresh corporate store retail unit, the company said it would shift merchandising and administrative responsibility for its Retail-East operation (51 Shoppers Food & Pharmacy supermarkets in Baltimore-Washington and 22 former Food Lions which trade as Shop ‘n Save stores in Western Maryland, Central Pennsylvania and West Virginia) into its Retail-West division (Cub Foods and Hornbacher’s) based in Stillwater, MN, which also serves as Cub’s headquarters.

The move becomes effective in early July and affects about 40 Shoppers associates including much admired division president Bob Gleeson, who’s been with Shoppers for 34 years and has served as top man at the discount merchant since 2013.

A Supervalu spokesman said all Shoppers stores will stay open and that personnel charged with operational responsibility will remain with the company. Jeff Bleichner, who has been with Shoppers for more than 35 years and currently serves as VP-operations, will oversee Shoppers once the restructuring has been completed. No decision at this time has been made as whether the company’s regional headquarters in Bowie, MD will stay open. The spokesman did say that a regional merchandising coordinator will remain based at Shoppers and serve as a liaison between Bowie and Stillwater.

Trade observers were hardly surprised by the move given the fact that Shoppers hasn’t built a new store in more than decade and has received little cap-ex support from Supervalu. Moreover, several retailers and vendors we spoke to believe this is the first step to ultimately selling the former warehouse retailer, whose roots go back to 1939 when the company was founded by Kenneth and Irving Herman as Jumbo Food Stores.

In fact, this merchandising and administrative move follows the pattern established last year when Supervalu laid off about 20 Farm Fresh associates in Virginia Beach, VA and shifted merchandising responsibility to Shoppers’ offices in Bowie. A year later, 24 of the remaining 38 Farm Fresh stores were sold.

Supervalu chief executive Mark Gross has not stated that most or all of its corporate retail stores are on the sale block, but he’s made it clear in several discussions with financial analysts that building the company’s wholesale business is top priority. Additionally, Gross did announce last month that Supervalu’s Shop ‘n Save stores (36 units in the St. Louis market along with the 22 former Food Lions) are up for sale.