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MINNEAPOLIS - Supervalu Inc. announced on Wednesday it has reached an agreement to acquire Deal$ - Nothing Over a Dollar, LLC, a 45-store general merchandise retailer specializing in single price point merchandise with current annualized revenues of approximately $75 million. The acquisition is expected to close in May.
"Today's announcement is the culmination of a year-long effort to develop a general merchandise strategy to support the next phase of expansion at Save-A-Lot," said Jeff Noddle, Supervalu president and CEO. "By introducing general merchandise product into Save-A-Lot, and following the same disciplined approach that secured Save-A-Lot's leadership position, we can positively influence the growth of our extreme value retail business over the long term. We are pleased to find the right 'deal' to accelerate our Save-A-Lot growth plans."
Bill Moran, CEO of Save-A-Lot added, "As we celebrate our 1,000th store opening in Waterbury, Conn., and the acquisition of Deal$, we simultaneously recognize our past accomplishment and mark an important strategic step forward. Deal$ is a young company that has effectively competed in the dollar store marketplace. The experienced retail management at Deal$ will complement our team at Save-A-Lot. Over the next few months, we will finalize a new Save-A-Lot protoype that represents a combination store of grocery and general merchandise. Save-A-Lot is well-positioned for its next phase of growth as this nation's number one extreme value grocery retailer."
Save-A-Lot's store expansion plans will be accelerated with the acquisition of Deal$. Network expansion will approximate 150 stores in Fiscal 2003 compared to approximately 100 in Fiscal 2002. Over the course of the next few years, it is expected that Save-A-Lot will retrofit its store network to include more general merchandise.
Deal$ is a St. Louis-based extreme value general merchandise retailer operating 45 stores in eight states, which are supported by one primary distribution center in Illinois. With an average store footprint of approximately 9,000 square feet, the company offers an assortment of highly consumable general merchandise and food items. Deal$ opened its first store in 1999 and opened 10 stores so far in calendar 2002. The Deal$ management team, with retail experience spanning several decades, developed its dollar price point format after successfully running other retail operations in Missouri and Illinois. The Deal$ organization will be part of the Save-A-Lot organization.
As of February 23, 2002, Supervalu's retail store network consisted of 1,260 stores in 39 states, including 998 Save-A-Lot extreme value food stores, of which 764 were licensed stores; 202 price superstores including Cub Foods, Shop 'n Save, Shoppers Food Warehouse, Metro and bigg's stores; and 60 conventional supermarkets including Farm Fresh, Scott's Foods, and Hornbacher's stores.