SUPERVALU PLANS REALIGNMENT OF BACK-OFFICE FUNCTIONS

MICHAEL GARRY

MINNEAPOLIS -- In a cost-cutting move aimed at reducing its back-office system and personnel expenses at its regional operations, Supervalu, based here, has announced a "regional realignment" of resources.

The move will affect "several hundred" employees who will either be relocated or lose jobs through attrition or termination, said Polly Deane, spokeswoman for Supervalu, which employs about 57,800 nationwide.

The targeted functions include finance, in-store systems support, category management and human resources. Supervalu plans to shift those functions from three of its seven regional offices into three other regional offices, leaving the Central region, based in Xenia, Ohio, unchanged.

The consolidation will affect the following regions:

The Northern region, in Minneapolis, will take over those functions from the Northwest region, Tacoma, Wash.

The Midwest region, Pleasant Prairie, Wis., will take over for the Southeast region, Atlanta.

The Eastern region, Mechanicsville, Va., will take over for the New England region in Andover, Mass.

The seven regional offices were formed as a result of a consolidation of 25 divisions that took place in 1995.

The streamlining is part of Supervalu's strategy to become the "undisputed low-cost supplier," helping the company and its retail customers become more competitive, said Deane, who declined to divulge the cost savings expected or the equipment affected.

In addition to supplying its own 1,260-store network, Supervalu is the primary supplier to about 2,750 supermarkets and 31 Cub Foods franchised locations, while serving as secondary supplier to about 1,500 stores. Over the past year, the company has stepped up its efforts to become more efficient in distribution, adding a data warehouse, a Web-based portal and new picking technology (see Page 71).

Deane said that other "key touchpoints" at the Northwest, Southeast and New England regional offices will remain unchanged, including basic distribution center functions, marketing support and merchandising for perishables and nonperishables.

Other large food retailing companies, including Kroger and Albertson's, have been making similar moves to streamline their operations and "become more productive," noted Jonathan Ziegler, San Francisco-based managing director, Deutsche Banc Alex. Brown, New York.

Deane said the changes will take place over "a matter of months."