SuperValu plans on closing down at least 60% of its grocery stores according to market surveys. SuperValu operates a number of grocery stores around America including Shop ’n Save, Albertsons, and Save-A-Lot. The company has over 4,400 stores around the country. Closing 60% of the stores will result in serious accounting pain and long-term financial problems. On the other hand, this will result in long-term financial savings for the company as a whole. Most of the locations planned for shut down are expected to be completely shut down over the next three months.

The positive side about this planned shutdown is the fact that the company will experience savings of up to $35 million within the next year. The company will also be able to save between $80 million and $90 million in tax fee over the next three years. This is very good news considering the company has been posting ten figure losses in each of the last two financial years. In an effort to maintain liquidity, the company suspended its most recent dividend offer.

Most of the investors and stakeholders are still not sure whether this was the smartest or perfect move to make, considering the market trend and consumer attachment. The closing of some of the stores may result in the loss of some loyal customers. Some of the customers may even opt to buy other products within the production range. This may, in the long run become a big disadvantage for the company as a whole. The company needs to carry out adequate market research to ensure that there are no adverse effects for the whole company