mark gross supervaluJust a few months after it closed the sale of its discount banner Save-A-Lot, Eden Prairie, Minn.-based Supervalu Inc. followed through on its pledge to focus on its wholesale business by announcing it plans to purchase Unified Grocers.

The purchase, valued at $375 million, gives Supervalu a bigger foothold on the West Coast. To date Supervalu had only one distribution center, in Tacoma, Wash.

Once the acquisition is complete, Supervalu will have 24 distribution centers serving 3,000 stores in 46 states, according to an article in the Minneapolis Star-Tribune.

Supervalu president and CEO Mark Gross said, at the close of the sale of Save-A-Lot in December that the company wanted to focus on its core wholesale business.

“With the successful completion of the Save-A-Lot sale, we are well positioned for the future with a stronger balance sheet, the opportunity to more strategically invest in our business, and the ability to more keenly focus on our core business as a leading grocery wholesaler,” he said, in a news release.

About the Unified Grocers acquisition, Gross had this to say:

“The ever-growing competitiveness of the (grocery) business will drive smaller distributors and regional self-distributing retailers to take a hard look at their cost structure and what they do best and come to the conclusion — on the retail side — that they should really focus on being merchants and that gives us an opportunity to add business, including merger and acquisition opportunity,” he said. “I think this is the beginning of our ability to accelerate the growth of our wholesale business, which we began last year.”

Unified Grocers gives Supervalu the scale it needs to be a better competitor, he said:
 

“The infrastructure necessary to support a wide variety of different formats is very expensive and what you see across the country is the challenge of scale,” he said. “I think what we bring in combining the two companies is that ability to take scale to this volume so you have right array of profitability and support to investment in the business.”

The transaction is expected to close in mid-to-late summer.

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