Supervalu Considering Options in Milwaukee

MINNEAPOLIS -- Supervalu here said Friday it is seeking strategic alternatives for its 15 Jewel-Osco stores in the Milwaukee market. The company said it is in discussions with Roundy's Supermarkets there to acquire five locations -- two in Milwaukee and single units in Glendale, New Berlin and West Allis, Wis. It also said it is in discussions with several local retailers -- reportedly its own independent customers -- regarding potential alternatives for the other 10 locations. Jeff Noddle, chairman and chief executive officer of Supervalu, said the company is constantly reviewing its store portfolio “to identify opportunities to strengthen [the] overall store base, [and] when necessary, we must consider the divestiture of some stores to effectively compete in the marketplace. According to David Livingston, principal at DJL Research, Milwaukee, “It's been uncomfortable for Supervalu's independents to have to compete with Supervalu corporate stores.” If a Jewel-Osco store is operating close to a Supervalu independent, “it may make sense for the independent to close his existing store, buy the Jewel and move his operation there,” he indicated. Although Jewel has been in this marketplace for about 10 years, it was never able to achieve more than a 10% market share, Livingston said. -- Elliot Zwiebach