Shaw’s Supermarkets, a wholly owned subsidiary of the grocery chain Supervalu Inc. ( SVU - Analyst Report ) , recently reopened two stores, in Auburn and Lewiston, Maine. The supermarket had closed these stores in early 2009. The reopening of the stores is a part of the revamp initiatives taken up by the company.

The stores have been renovated to provide more space for shopping and also accommodate larger varieties of fresh produce, meat and locally made goods.

As a part of Fresh Rescue Food Donations program under Supervalu’s ‘zero waste’ program, Shaw’s Supermarkets donated food to the largest hunger relief organization in Maine, Good Shepherd Food-Bank. The donations program plays key a part in the company’s waste diversion efforts.

In 2006, Supervalu had acquired Shaw’s and Star Market, along with other regional chains such as Acme Markets, Jewel and Jewel-Osco from Albertsons. However, due to poor sales reported by Shaw’s Supermarkets, many stores have closed since 2006.

In order to improve the performance of the Shaw’s chain, Supervalu has remodeled many of its stores and also increased marketing efforts partnering with the New England Patriots and the Boston Red Sox Radio Network.

Poor First Quarter Earnings

Supervalu recently reported first quarter fiscal 2013 earnings per share of 19 cents, sharply lower than the Zacks Consensus Estimate of 38 cents and the prior-year quarter earnings of 35 cents a share.

The lower-than-expected results were due to the disappointing same-store sales during the quarter coupled with disposition of several fuel centers owned by the company.

Revamp Initiatives

However, the company has undertaken several initiatives like ‘fair price plus promotion strategy,’ cost-reduction program, reduction of capital expenditures and also decided to suspend the quarterly dividend in order to be at par with its competitors, be financially flexible as well as have a strong balance sheet.

The Zacks Consensus Estimate is pegged at 21 cents for the second quarter of fiscal 2013 and 83 cents for the full year fiscal 2013.

Supervalu, along with its subsidiaries, operates retail and wholesale food stores in the United States and has its headquarter in Eden Prairie, Minnesota. The company faces stiff competition from Wal-Mart Stores Inc. ( WMT - Analyst Report ) , The Kroger Co. ( KR - Analyst Report ) and Safeway Inc. ( SWY - Analyst Report ) .

Currently, the stock carries a Zacks #5 Rank (short-term Strong Sell rating).