On Wednesday Supervalu made an announcement that was not exactly promising: an earnings drop of more than a third meant suspension of dividends, a quarter-billion dollars of new cutbacks and a possible sale of the company. Thursday the markets responded. To the tune of a 49 percent drop in the company’s share price.
Supervalu’s
big debt seems to make the chances of finding a buyer pretty slender.
So the company may be faced with trying to improve its competitive
prospects while making its debt more manageable. Price reductions and
cutbacks may
be the key ingredients to part one of that formula. As for part two,
Bloomberg reports Supervalu is working to arrange loans that would allow
it to restructure its debt.
Supervalu has grocery stores across the country and the $250 million worth of cutbacks will happen over a two-year period. But with 67 Cub Foods stores in Minnesota, the company’s home state would seem to be a candidate for some closings.
Dire
straits at one of the largest companies in the state may not be welcome
news, but at least there’s a silver lining for those of us who buy
groceries. To keep up with its low budget competitors, Supervalu is looking not just at putting things on sale but at lower prices period.
45°
Mostly Clear in Minneapolis 
Ars Technica
Mashable
New York Times
