MINNEAPOLIS -- Supervalu last week said it will close its Bloomington, Ind., wholesale food division early this spring. The move is part of Supervalu's consolidation of facilities since its acquisition of St. Louis-based Wetterau in October 1982. The Bloomington unit became part of Supervalu in that deal. The 120 independently owned supermarkets in Indiana and Illinois served by the Bloomington operation will be serviced by Supervalu's J.M. Jones division in Champaign, Ill., the company said.
The Bloomington shutdown will improve efficiencies, reduce operating costs and lead to better service for the stores, according to a Supervalu statement.
"When we acquired Wetterau, there were very few areas of overlap," a Supervalu spokeswoman told SN. "Unfortunately, Bloomington was one of those."
In an earlier consolidation resulting from the Wetterau acquisition, last June Supervalu combined its two Western Pennsylvania units into a new entity called the Pittsburgh division. The two units combined were Supervalu's Charley Bros. operation in New Stanton, Pa., and Wetterau's operations in
Belle Vernon, Pa. That consolidation has been proceeding on schedule, and those units are in the process of splitting functions along lines like groceries and perishables, said the Supervalu spokeswoman.
The Bloomington division's president, John Abrell, has headed that operation since 1985. The Supervalu spokeswoman said it wasn't known if he would be offered another role. The Bloomington unit has about 350 employees, most of whom will be terminated, the spokeswoman said. The unit supplies some 13,000 grocery and related items to its customers.
Supervalu has now eliminated virtually all the overlapping operations resulting from the Wetterau acquisition, according to the spokeswoman.
However, Gary Giblen, a securities analyst with PaineWebber, New York, noted that more consolidations may be needed in the New England market following Supervalu's agreement last month to purchase wholesaler Sweet Life Foods, Suffield, Conn. At risk is the future of some of the Wetterau facilities in New England now operated by Supervalu. "New England is a big unknown now," he said. "Supervalu got a large and more modern facility in the Sweet Life deal, so my best guess is that it's time to start digging a grave for some of those Wetterau facilities there."
Supervalu's efforts to improve the performance of the Wetterau operations helped push its third-quarter earnings far above what was expected.