Supervalu Files Plans to Spin Off Save-A-Lot Division

Supermarket chain Supervalu Inc. on Thursday filed with regulators plans to spin off its hard-discount division Save-A-Lot as a public company, the latest move for Supervalu as it struggles to cope with big changes reshaping the food-retail sector.

Supervalu said last summer it was considering spinning off Save-A-Lot in a bid to help investors better understand and value the low-price, no-frills chain. In Thursday's filing with the Securities and Exchange Commission, Supervalu said its shareholders would own at least 80% of the newly public Save-A-Lot company.

Supervalu didn't set a deadline for taking Save-A-Lot public, and a company spokesman said there is no assurance the spin off will occur.

Save-A-Lot has been a rare bright spot for Supervalu as it attracted cost-conscious consumers while specialty chains led by Whole Foods Market Inc. have lured wealthier shoppers. That has left many traditional grocers, including Supervalu's other grocery chains, in an unappealing middle ground. Some grocers have responded by acquiring other stores, and others have gone out of business.

Last summer, Supervalu Chief Executive Sam Duncan said splitting off Save-A-Lot could enable Supervalu to focus on its other 200 grocery stores, like Farm Fresh and Cub Foods, and its wholesale business, which is one of the largest in the country. He said such a move could help Save-A-Lot become more competitive.

Write to Ilan Brat at [e-mail]

(END) Dow Jones Newswires

January 07, 2016 15:15 ET (20:15 GMT)

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