Supervalu Feels Heat from Target DC

Supervalu Inc. has offered buyouts to 57 employees of its distribution operations in Illinois after Target Corp. recently expanded its distribution center in Iowa.

Minneapolis-based Supervalu distributes products for other retailers and has serviced Target stores from its distribution center in Urbana, Ill., and the W. Newell & Co. specialty produce center in neighboring Champaign, the Minneapolis/St. Paul Business Journal reported.

Target has been expanding its grocery operations, so the Minnesota-based discount chain shifted some business to its Iowa center as it beefs up its distribution network while continuing to contract with Supervalu in other areas.

Supervalu’s buyout offer – a one-time, lump-sum payment – were made this past week, and employees reportedly have until early in the week of Feb. 6 to decide. The Urbana center has about 500 employees; the Champaign location employs 130.

Target announced last fall that it planned to expand its 400,000-square-foot Iowa distribution center, opened in 2009, which specializes in perishable food and supports the company’s “P-Fresh” stores, opened in 2009.