Up to 2,500 positions will be eliminated at all 247 stores in California and Nevada. No stores are being closed, and the number of jobs cuts are likely to be small at each location. Not that big a surprise - Albertsons parent Supervalu lost $424 million in the fourth quarter. "They're just in a bad cycle," analyst Scott Mushkin told Bloomberg. "When your sales are declining you need to cut expenses, so you start cutting store labor." From press release:
"A decision of this nature is never easy, but it is the necessary step for us to take to help improve our business and accelerate our turnaround," said Dan Sanders, president, Albertsons Southern California Division. "Our goal is to more effectively serve the marketplace by scheduling associates more appropriately to serve customers at the times they shop. I am confident our team will embrace these changes and help us to compete more effectively in a rapidly changing marketplace."
Supervalu has been working to get its everyday pricing as low as bigger players, including Kroger, Safeway and Wal-Mart Stores Inc, amid fierce competition and higher food costs. At the same time, it has been paying off debt from its $12.4 billion acquisition of more than 1,100 Albertsons stores in 2006. That burden has hampered Supervalu's ability to compete more aggressively and stand out from rivals.