Supervalu Turning Away From Retail and Towards Wholesale Says CEO
BLOOMINGTON, MN - Supervalu is going 'all in' with its wholesale business division, company CEO Sam Duncan revealed during Supervalu's annual shareholders' meeting at the Hilton Hotel in Bloomington. Duncan talked at some length about Supervalu's earlier purchase of 18 Rainbow Food stores, something he characterized as a “wholesale play.” His most revealing statement however came later:
“We are going to be a great wholesaler,” Duncan said. “That is our focus. It is more than half of the company, and we are darned good at it…I have no desire to be a big retailer.”
So far it has been revealed that 10 of the 18 former Rainbow stores will be reopened as Cub Foods locations. Supervalu's wholesale customers such as Jerry's Foods and Lunds are expected to play a big part in many of the remaining stores.
That wholesale has become the majority of Supervalu's revenue is no accident. When Supervalu sold four of its biggest supermarket operations earlier this year for $3.3 billion, it left its much smaller Cub grocery store line as its largest remaining retail chain. Annual revenue fell to about $17 billion in the wake of this deal, a majority of which now came from Supervalu's wholesale operations.
Duncan hopes the shift in focus will help his company halt the downward path its sales numbers and stocks had taken prior to his installment as CEO in late 2013. So far he's been successful, with Supervalu stock up 7% as of Wednesday, $6.83 higher than it's 30 year low at $2 per share in 2012.
“We have got a heck of a lot accomplished,” Duncan told shareholders. “But we have a lot more to do.”
Supervalu however, with Duncan at the helm, is confident that it is on the right path.