Supervalu Closes 20 Stores, Offers Unpaid Time Off

In a push that aims to cut costs and start the next fiscal year on a stronger note, Supervalu is closing 20 unprofitable stores and offering unpaid time off to some employees.

Supervalu, Inc., last week announced plans to close 20 underperforming stores by the end of its fiscal year.

The store closures will affect Eden Prairie-based Supervalu's Shoppers, Acme, Shaw's, Farm Fresh, and Albertsons chains, company spokesman Mike Siemienas said Friday. Affected stores are unprofitable locations primarily concentrated on the East and West coasts.

As of September 11, Supervalu had 2,364 retail grocery locations across the country. Supervalu's Cub Foods stores, which are mostly located in the Twin Cities metro area, will not be affected by the closures.

Siemienas told Twin Cities Business that the closures are in an attempt to “eliminate negative operating costs for a healthier start to the new [fiscal] year,” which begins on February 27.

In addition to closing some stores, Supervalu is also attempting to cut costs another way. During the week of Christmas, the grocery chain told corporate and office employees that they could take unpaid time off-with their managers' consent-through the end of the fiscal year.

Siemienas said he didn't know how many employees chose to take advantage of that option but made clear that no employees were required to take time off. The move aims to provide “cost savings for the final quota of the fiscal year,” he said.

Supervalu has struggled in recent years amid tightened consumer spending. In October, it reported a net loss of $1.47 billion on $8.7 billion in net sales for the second fiscal quarter. Supervalu CEO Craig Herkert said at the time that the company's “sales performance continues to reflect a difficult operating environment.” Supervalu's same-store sales have declined for the past 10 consecutive quarters.

Supervalu lowered its full fiscal year guidance in October, indicating that it projects a net loss in the range of $5.74 to $5.94 per share for fiscal 2011-or earnings of $1.40 to $1.60, excluding impairment charges and other costs.