In the acquire-or-merge trend that is sweeping through the retail space, the need to grow to compete has seen another acquisition. This time, Minnesota-based grocery store Supervalu expects to dramatically expand its footprint along the West Coast with its acquisition of member-based Unified Grocers for $390 million.
The acquisition, announced in April, was completed in June, creating one of the nation’s largest grocery wholesalers.
While Unified has six distribution centers primarily in California and serves independent retailers through a member-based system, Supervalu operates 18 distribution centers across the country. Unified has declared losses for the past four years and posted sales worth $3.76 billion in 2016 compared to Supervalu which reported sales figures of $9.57 billion in the current fiscal year.
Expectations from the companies’ leadership is that the merger will result in lower operating costs, an increase in the distribution center network and the optimization of underutilized DCs, especially in the Pacific Northwest.