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Schnucks to buy 19 Shop ‘n Saves from Supervalu

Distributor pushes ahead with plans to exit grocery retailing

Russell Redman

September 18, 2018

4 Min Read
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Schnuck Markets has agreed to acquire 19 Shop ‘n Save supermarkets in the St. Louis market from Supervalu Inc.

Financial terms of the deal, announced late Monday, weren’t disclosed. Schnucks and Supervalu said the sale of the stores — 14 in Missouri and five in Illinois — will be staggered and start on Oct. 7. The transaction is expected to close in late October.

Also under the deal, Schnucks will acquire four of Shop ‘n Save’s seven fuel centers as well as 16 Shop ‘n Save pharmacies. Fifteen of the pharmacies are inside Shop ‘n Save stores, and the other is a stand-alone pharmacy in Union, Mo. Schnucks is also buying the prescription files for 10 other Shop ‘n Save in-store pharmacies and will transfer those prescriptions to nearby Schnucks stores.

In connection with the sale, Schnucks also has entered a primary distribution agreement with Supervalu for nine current Schnucks supermarkets in northern Illinois, Iowa and Wisconsin.

“Schnucks is proud to be growing in our hometown of St. Louis, excited about the opportunity to serve new customers and looking forward to welcoming the employees at these 19 stores to Schnucks,” Todd Schnuck, chairman and CEO of St. Louis-based Schnuck Markets, said in a statement. “We want longtime customers of each store to know that we are eager to earn your business, and we’ll be working closely with Supervalu and Shop ‘n Save to ensure a smooth and successful transition.”

Related:Schnucks plans store on former Shop ‘n Save site

The Shop’n Save locations and pharmacies will be converted to the Schnucks banner. Schnucks said it expects to close each store about two-and-a-half days for the conversions, which include posting new signs and fixtures, switching out point-of-sale systems and restocking merchandise.

Plans call for all bargaining-unit Shop ‘n Save employees to be offered jobs with Schnucks at the same wage rate, working a comparable number of hours and doing comparable work, Schnucks said, adding that eligible employees will also get health care coverage and pension contributions consistent with union agreements. Over the next week, Schnucks is slated to interview all Shop ‘n Save store directors, assistant store directors, pharmacy managers and pharmacists.

“Our intention is to make a strong offer to the Shop ‘n Save employees at these 19 stores in hopes they choose to join the Schnucks team,” Schnuck commented. “They know their stores and their communities and will be an integral part of the conversion process.”

Schnucks_store_banner.pngWhen the acquisition closes, Schnucks will have 118 supermarkets, 110 pharmacies and nine specialty pharmacies in Missouri, Illinois, Indiana, Wisconsin and Iowa. Schnucks last month opened a new store — a former Shop ‘n Save — in Maplewood, Mo., and the retailer is currently building a new store in Warrenton, Mo., that’s scheduled to open later this fall.

Related:Supervalu ends proxy fight

For Supervalu, the sale to Schnucks furthers plans to exit the grocery retailing and focus on growing its wholesale business as part of United Natural Foods Inc., which in late July announced a deal to acquire the Minneapolis-based company for $2.9 billion. That transaction is expected to be finalized in the fourth quarter, pending regulatory and shareholder approvals and other closing conditions.

The 17 remaining Shop ‘n Save stores will operate as usual as Supervalu seeks one or more buyers, but the company said it will close the stores later this year if no purchasers are identified. Founded in 1979, Kirkwood, Mo.-based Shop ‘n Save has about 2,800 employees and has served the St. Louis market area for nearly 40 years.

Supervalu noted that it also plans to close its distribution center on Hazelwood Avenue in St. Louis later this year. The facility, which mainly serves Shop ‘n Save stores, is slated to remain in operation until the completion of the sale to Schnucks and any sales or closures of the remaining Shop ‘n Save locations.

“Since announcing plans to pursue the sale of our Shop ‘n Save banner earlier this spring, the team has worked diligently and successfully to put this agreement together,” said Supervalu President and CEO Mark Gross. “This transaction is an important step in the continued transformation of our business. Schnucks is an excellent retailer in the St. Louis area, and we’re pleased that these stores will become a part of their operation, including continuing to serve the communities and providing jobs to many of our employees.”

The sale of Shop ‘n Save leaves Supervalu with 111 supermarkets under the Cub Foods, Hornbacher’s and Shoppers banners. Supervalu had announced plans to divest Shop ‘n Save in May, after unveiling deals to sell 21 Farm Fresh stores to Harris Teeter, The Kroger Co. and Food Lion the previous month. In August, Supervalu shareholders approved a plan to adopt a holding company structure to facilitate the sale of the retail assets.

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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