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MINNEAPOLIS AND MILWAUKEE -- Roundy's Supermarkets Inc. yesterday said it has agreed to sell the distribution business for approximately 50 independent retail locations to Supervalu Inc.
The multi-banner accounts currently served by Roundy's Stevens Point and Oconomowoc, Wis., distribution centers will starting next month be supplied by Supervalu's Green Bay and Pleasant Prairie, Wis., depots. The deal excludes independently owned and operated Pick 'n Save retailers, which will continue to be supplied by Roundy's. The banners affected by the change are Village Market, Quality Foods, and Hansens, as well as many customers that fly the IGA banner.
Although terms of the transaction were not disclosed, the financial impact of the new business is included in Supervalu's fiscal 2006 earnings guidance.
In the first quarter of 2005, Roundy's sold distribution centers in Lima, Ohio, and Westville, Ind., and associated business to Nash Finch Co. of Minneapolis for $225 million, in order to concentrate further on its retail operations.
Vivian King, Roundy's director of public affairs, told Progressive Grocer the latest deal with Supervalu "represents another move in the direction of our strategic plan to help us become more retail focused."
Robert Mariano, chairman and c.e.o. of Roundy's, echoed King's sentiments, noting that the transaction "is consistent with our strategy to concentrate our resources on growing our own retail stores, and independently owned and operated Pick 'n Save retailers."
Jeff Noddle, Supervalu's chairman and c.e.o., said his organization "is pleased to welcome this group of highly regarded retailers to our Midwest Region, and we look forward to establishing new partnerships with these experienced business owners."
With annual sales in excess of $3.8 billion and 21,000 employees, Roundy's Supermarkets, Inc., is a Fortune 500 company and operates 132 retail grocery stores under the Pick 'n Save, Copps and Rainbow Foods banners in Wisconsin, Minnesota and Illinois.
With annual revenues of approximately $20 billion, Supervalu supplies 1,555 retail grocery locations including licensed Save-A- Lot locations. Its diverse supply chain network provides distribution and related logistics support services across the nation's grocery channel.