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Supervalu Stays in Northwest, Licenses Grebe Bakery Products

MINNEAPOLIS - Supervalu, Inc. yesterday confirmed that it will continue to operate its Tacoma, Wash. distribution facility to support its strong base of independent retailers and extensive military business served by the Tacoma location.

"The decision to remain in Tacoma comes after a thorough and disciplined evaluation and analysis undertaken as a result of the transition of the Haggen Foods business, which will occur in mid-October," said Jeff Noddle, Supervalu chairman and c.e.o. "We have assessed the marketplace and believe the opportunity exists for our distribution business to continue to grow in the region."

During the recent transition, the company has worked closely with its union partners; it recently settled contracts with employees in both Tacoma and Spokane. In addition, Supervalu plans to reconfigure and resize its Tacoma operation, to enhance productivity and keep pace with the changing business environment.

"Supervalu remains committed to serving both new and existing customers in the Northwest and to continuing to provide a vibrant business offering," said Noddle. "We feel that the changes we have in process will positively position us for future growth."

Supervalu reaffirmed its earnings per share in the range of $2.75 to $2.90 for the fiscal year ending Feb. 26. This range includes the 50-cent diluted earnings per share impact from the net after-tax gain on the sale of the company's minority interest in WinCo and three-cent diluted earnings per share impact from the early retirement of debt, both of which occurred in the first quarter.

In other Supervalu news, Grebe Bakery and the retailer/wholesaler have reached an agreement in which Grebe Bakery is licensed as the exclusive manufacturer and distributor of Crestwood Bakery products in Wisconsin and parts of Michigan and Illinois.

Financial terms of the transaction were not released, but the transition will begin immediately and is expected to be completed by late fall.

Under the agreement Grebe -- which serves approximately 300 grocery and convenience stores in Wisconsin from its West Allis facility -- will integrate Crestwood's wide array of fresh bakery products and custom-made cakes into its own extensive selection of products and services that it offers.

Grebe also will add the Sentry Foods stores to its customer base and begin providing bakery products and services to those locations.

"At Grebe Bakery, we are very excited about this opportunity," said Jim Grebe, owner of Grebe Bakery. "As we add the popular Crestwood products to our offering, we remain committed to maintaining the high standards of customer service and product availability and variety that we've always offered. Shoppers can expect the same delicious baked goods and exceptional customer service as before."

"This is a great partnership for Supervalu and our Sentry Foods store owners," said Mark Anderson, president of Supervalu's Midwest region. "The Crestwood name has a long history of quality, and Grebe Bakery will ensure that the tradition of quality and service that Crestwood Bakery brought to Southeast Wisconsin continues."

During its nearly 50 years of operation, the Crestwood Bakery has been a mainstay in the Sentry Foods stores, offering fresh bakery products and custom-made cakes to more than 40 Sentry Foods stores throughout Southeast Wisconsin. Crestwood Bakery became a part of Supervalu in September of last year as part of Supervalu's asset exchange agreement with C&S Wholesale Grocers in Battleboro, Vt.
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