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SUPERVALU (SVU) Inks Supply Agreement with Fresh Market

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Grocery retailer SUPERVALU Inc. has inked a long-term supply agreement with Greensboro, NC-based specialty retailer, The Fresh Market, Inc.

SUPERVALU, which currently holds a Zacks Rank #3 (Hold), will supply Marsh Supermarkets and O’Malia Food Markets with traditional products such as meat, deli, bakery, seafood, grocery, frozen foods and dairy. SUPERVALU will serve as The Fresh Market’s primary distributor by fall 2016 and also intends to take on additional stores as the transition continues.

We believe that this is a win-win deal for both the parties as SUPERVALU will gain access to 176 stores in 24 states across the U.S. where Fresh Market presently operates. On the other hand, Fresh Market’s customers will gain from SUPERVALU’s popular grocery brands like Wild Harvest, Culinary Circle and Essential Everyday.

SUPERVALU INC Price and EPS Surprise

SUPERVALU INC Price and EPS Surprise | SUPERVALU INC Quote

Notably, SUPERVALU recently entered into several strategic agreements with several supermarkets in order to strengthen its position in the grocery retail industry. On Jul 6, it inked a long-term supply deal 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. (Read: SUPERVALU's Marsh Supermarkets Deal Drives Stock)

 

These deals come 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 over 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 and Fresh Market may turn things around for SUPERVALU.

Other Stocks that Warrant a Look

Other favorably placed stocks in the food/ miscellaneous sector include The Kraft Heinz Company (KHC - Free Report) , Pinnacle Foods Inc. and Cal-Maine Foods Inc. (CALM - Free Report) . All these stocks hold a Zacks Rank #2 (Buy).

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