Supervalu stock plunged more than 9.5 percent in Thursday morning trading following news that it would cut its full-year outlook.
 
Previously, the Eden Prairie-based food conglomerate and owner of Cub Foods expected its adjusted earnings to fall 1.5 percent year-over-year. Instead, the company now believes the drop will be closer to 5 percent.
 
Supervalu said a number of factors played into the outlook drop, one of which is “competitive openings and a challenging sales and operating environment.” In the Twin Cities, new grocery stores have been popping up on a regular basis, particularly this year with the addition of several Hy-Vee stores. (TCB looked into the food fight going on between Minnesota grocers back when Hy-Vee was still preapring to enter the Twin Cities scene.)
 
Supervalu’s discount grocery chain Save-A-Lot has also been negatively impacted by deflation, the company said. In the last year, Supervalu has made numerous efforts to spin off its Save-A-Lot brand, including the filing of potential spin-off documentation with the SEC and strategic hirings of executives that specialize in shepherding spinoffs.
 
Additionally, Supervalu noted that drops in SNAP (colloquially referred to as “food stamps”) benefit spending contributed to the cut in its full-year outlook.
 
The company’s second quarter will end on September 10.
 
In its previous quarter, Supervalu reported diminished sales and profits compared to the prior year’s results.