On March 14, Supervalu announced it had entered into three separate definitive agreements to sell 21 of its 38 Farm Fresh Food and Pharmacy stores for approximately $43 million in cash to three different retailers. The company also said it was exploring potential transactions to sell the remaining Farm Fresh stores to current and prospective wholesale customers and certain Farm Fresh employees.
Harris Teeter will acquire 10 stores including six in-store pharmacies and three fuel centers, Kroger’s Mid-Atlantic Division will buy eight stores which include eight in-store pharmacies and four fuel centers and Food Lion will be sold three stores including three in-store pharmacies.
“Over the past two years, we’ve been working diligently and rapidly to transform our business to become the wholesale supplier of choice for grocery retailers across the United States,” said Mark Gross, President and CEO, Supervalu. In 2016, Supervalu sold Save-A-Lot and approximately 1,350 of its retail locations. In 2017, they acquired Unified Grocers and Associated Grocers of Florida. Gross said the combined organic growth added more than $5 billion in run rate sales to bring Supervalu’s core wholesale business to nearly $13 billion.
“Exiting the Farm Fresh banner will enable us allocate greater resources and energy toward the strategic growth of our wholesale business. We also continue to aggressively pursue other important initiatives, including the monetization of real estate through sale leaseback transactions and cost reduction across the company,” Gross said. He added the decision was in the best long-term financial and strategic interest of the company.