Supervalu dismisses its CEO

I commented recently (here and for RetailWire) about the management turmoil at SuperValu and the likelihood that some of the company assets will be put into play. This week’s announcement about changes at the top won’t do anything to quiet the speculation. Here’s my comment:

Supervalu’s fundamental mistake years ago was to “go vertical” in the first place, and to extend its reach from its core distribution business to buy up several underperforming grocery chains nationwide. (And anyone who has shopped at Star Market in Boston or Jewel in Chicago knows that these stores have slipped considerably from their heyday.) As I noted in my last comment about Supervalu, its biggest return to its investors at this point might be an asset sale to better operators — not another round of price cuts, which will invariably be beaten by Walmart and others. Time will tell whether Mr. Herkert was standing in the way and whether Mr. Sales is the man for the job.

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