Dive Brief:
- Mark Gross will step down as chief executive officer of Supervalu following the completion of its merger with United Foods International Inc., as outlined in an 8-K form filed with the Securities and Exchange Commission and first reported by Winsight Grocery Business.
- Gross, who was appointed Supervalu CEO in 2016, will be prohibited from “engaging in activities relating to the grocery wholesale business and Supervalu’s grocery retail businesses” for a period of two years, according to the filing.
- Before joining Supervalu, Gross headed up consulting firm Surrey Investment Advisors for a decade. Prior to that, he worked at C&S Wholesale Grocers for 10 years, serving briefly as the company’s co-president in 2005.
Dive Insight:
Gross came to Supervalu as an expert in mergers and acquisitions, having guided grocery retailers through several billion-dollar acquisitions during his decade at Surrey Investment Advisers, a firm he started.
Prior to that, he rose through the ranks at C&S Wholesale Grocers, contributing to a period of marked growth in its wholesale and retail holdings. In 2005, the year he served as C&S’s co-president, the company acquired wholesale facilities across the Southeast and established the Southern Family Markets chain.
Gross put his experience to work at Supervalu. He guided the company through the $1.4 billion sale of its Save-A-Lot discount chain — a deal the retailer/wholesaler had been exploring when it hired him. Last year, he put his stamp on Supervalu when he oversaw two large acquisitions: Unified Grocers and Associated Grocers of Florida.
The Unified deal expanded Supervalu’s wholesale presence along the West Coast and gave it Market Centre, a specialty distributor that had contracts with key retailers. The AG of Florida deal, meanwhile, was Supervalu’s entry point into a state that’s seeing a rush of new grocery competitors.
Despite his experience and focus on boosting Supervalu’s wholesale business, Gross struggled to overcome the shortcomings of the company’s retail division. As Supervalu’s share price continued to drop, activist investor Blackwells Capital stepped in and began publicly pressuring the company to sell off assets and to explore a sale of the entire business.
UNFI plans to sell off Supervalu’s remaining retail stores, including its Cub Foods, Hornbacher’s and Shoppers Food & Pharmacy banners. Experts are also hailing the merger’s potential to boost efficiencies for both companies and to provide better prices and availability on a wide range of products, from conventional to natural and organic offerings.
Others have expressed concerns about leverage — UNFI is smaller than Supervalu and will finance the deal substantially with debt — and about the difficulties both companies have faced with rising costs. Supervalu is also still in the process of digesting its Unified and AG of Florida deals.
“Supervalu has taken on a lot of acquisition activities, and UNFI is going to have to do a lot of that integration work,” Ajay Jain, senior research analyst with Pivotal Research Group, told Food Dive in an interview.
