retail news in context, analysis with attitude

The Chicago Sun Times offers some analysis of the Cerberus deal to acquire five of Supervalu's retail chains - Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market stores and related Osco and Sav-on in-store pharmacies - for $3.3 billion, plus the right to acquire up to 30 percent of Supervalu's common stock at $4 per share.

Some analysts believe that this is primarily a real estate play, and that the private equity group will look to maximize profits by selling stores or entire chains.

Others suggest that "Jewel will become a stronger competitor once freed from the Supervalu connection. Jewel has to buy its wholesale goods from Supervalu and now can shop for better deals that will reduce prices at the checkout counter, the source said."
KC's View:
I think that Cerberus is going to sell real estate where it can, getting rid of dead weight, but that it is unlikely that it will sell of entire chains. The goal will be to make both the Cerberus holdings and Supervalu slimmer, trimmer, and more manageable. I just hope that the folks involved focus on being more effective, not just more efficient.