SuperValu may spin off Save-A-Lot into separate company
SuperValu said Tuesday that it may spin off its discount grocer Save-A-Lot into a separate publicly traded company as competition in the industry intensifies.
Shares of SuperValu Inc. jumped nearly 16 percent Tuesday.
The company says the split will help each company focus on finding ways to grow. SuperValu Inc. has been getting smaller in recent years, selling its Albertson's, Jewel-Osco and other chains.
Rival chains have been combining. Last month, the owner of Stop & Shop and Giant stores said it will merge with the parent company of Food Lion to operate 6,500 stores around the world. And discounter Dollar Tree completed its deal to buy Family Dollar earlier this month, bringing its store count to about 13,000.
Create a More Connected Minnesota
MPR News is your trusted resource for the news you need. With your support, MPR News brings accessible, courageous journalism and authentic conversation to everyone - free of paywalls and barriers. Your gift makes a difference.
Save-A-Lot has more than 1,300 stores around the country, selling fresh meat, vegetables and other groceries. The company has plans to open 100 new Save-A-Lot stores by early next year, some in new markets. It will open its first Las Vegas store later this summer. SuperValu said it doesn't have a timeline for when the Save-A-Lot separation may happen.
"Save-A-Lot is a business with great growth prospects," said SuperValu CEO Sam Duncan in a conference call Tuesday, adding that the new stores will help it compete with other discount retailers.
Based in Eden Prairie, SuperValu distributes grocery items to nearly 3,600 stores and also operates the Cub Foods, Shop 'N Save and Hornbacher's chains.
SuperValu shares rose $1.17, or 15.9 percent, to $8.53. Its shares are down about 9.3 percent in the last 12 months.