Grocery retailer SUPERVALU Inc. has seen an 8.48% rally in share price on Jul 6, after it inked a long-term supply agreement with Indianapolis, IN-based grocery wholesaler Marsh Supermarkets. Under the agreement, which is scheduled to be completed by the end of September, SUPERVALU will provide certain professional services to the grocery chain.

SUPERVALU, a Zacks Rank #2 (Buy) stock, will supply Marsh Supermarkets and O’Malia Food Markets with traditional products such as meat, deli, bakery, seafood, grocery, frozen foods and dairy. Additionally, SUPERVALU will lend merchandising support to Marsh Supermarkets through advanced merchandise planning, retail pricing analysis and shelf management programs.

We believe that this is a win-win deal for both the parties as SUPERVALU will gain access to 70 supermarkets across Indiana and Ohio as well as 38 pharmacy locations where Marsh Supermarkets presently operates. On the other hand, Marsh Supermarket’s customers will advantage from SUPERVALU’s popular grocery brands like Wild Harvest, Culinary Circle and Essential Everyday.

Also, the deal comes at a good time as SUPERVALU is scheduled to dispose off of its Save-A-Lot stores this fall. SUPERVALU has been reporting lower earnings for the past few quarters due to a substantial reduction in profits. The company's sales have also been declining due to lower comps. However, the recent contract with Marsh Supermarkets may turn around things for SUPERVALU.

SUPERVALU INC Price

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Other Stocks that Warrant a Look

Other favorably ranked stocks in the food/ miscellaneous sector include The J. M. Smucker Company (SJM Quick QuoteSJM - Free Report) , Post Holdings Inc. (POST Quick QuotePOST - Free Report) and United Natural Foods Inc. (UNFI Quick QuoteUNFI - Free Report) , all sporting a Zacks Rank #1 (Strong Buy).

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