David Livingston

'Good is Not Enough' for Cub Foods

August 31, 2010

FROM RETAILWIRE:
Cub Foods is a household name in the Minneapolis/St. Paul area, but its history has not prevented shoppers from seeking cheaper grocery alternatives. What are the primary challenges faced by Cub Foods and what are the answers to overcome those?      [more...]

One of the biggest challenges for Cub is the fact that is it owned by Supervalu, a company that is deeply in debt, has laid off employees, cut its dividend and seen its stock price plummet -- not exactly the best position to be in when facing an onslaught of new Wal-Marts and Super Targets. It probably doesn't matter if the new president has grocery experience or not at this point.

While Cub is still the market share leader in the Twin Cities, that market share is slowly eroding as the competition continues to undercut Cub with pricing. It's very difficult for Cub to respond with all the cliche responses, such as better service and higher quality perishables, since their financial situation has weakened.

We've seen Cub close stores by the bushel all over the country during the past few years, unable to compete with the supercenters. In the Twin Cities, they still have the home field advantage. For how long we can only guess.