SuperValu to close distribution center

//September 12, 2008

SuperValu to close distribution center

//September 12, 2008

SuperValu Inc. will leave its distribution center in Harrisburg by summer
2010, a company spokeswoman said.

The closure is part of a three-year consolidation plan that
will merge three of the company’s distribution facilities into its
1.4-million-square-foot facility in Denver, Lancaster County, said Rebekah
Fawcett, supply-chain communications manager for the Minnesota-based grocery
retailer and distributor.

About 370 Harrisburg
employees will be affected. They will be transferred to the company’s Denver facility, or they
will work out exit agreements with the company, Fawcett said.

The consolidation will reduce

SuperValu’s workforce, but Fawcett would not say by how
much. She would not say how many employees would transfer from its Harrisburg location.

“We have offered (employees) the ability to move,” Fawcett
said. “The company recognizes that some associates will be personally affected
by this transition, and SuperValu is committed to assisting these individuals
during this time.”

SuperValu sold its Harrisburg
property at 3900 Industrial Road
in April. The buyer is an affiliate of Conshohocken, Montgomery County-based
real estate investment group, KTR Capital Partners, according to KTR’s Web
. KTR is a private-equity firm specializing in real estate investment.

SuperValu sold the property for $30.3 million, according to
the Dauphin County Recorder of Deeds office. SuperValu is leasing back the
space at the facility, which was built in 1985. It’s not clear exactly how big
the facility is. Fawcett wrote in an e-mail that the facility is 850,000 square
feet, and KTR’s Web site lists it as 735,600 square feet.

SuperValu will merge its Harrisburg,
Easton, and Perryman,
Md., facilities into the seven-year-old Denver location within
the next year and a half, she said. The Lancaster County
facility will be outfitted with new automation equipment as the phase-out of
the other locations takes place.

is a facility that is close to key markets and capable of handling the volume
of our regional business,” Fawcett said.

SuperValu owns a retail network of more than 2,500 stores
and reaches more than 5,000 retailers through its supply chain, according to
the company’s Web site.

SuperValu purchased its Harrisburg distribution center in 1999 as
part of its acquisition of grocery distributor Richfood.

Harrisburg Mayor Stephen R. Reed said the facility will
probably still serve as a distribution center. Its infrastructure and location,
near Interstate 81, would lend itself for continuing that use, he said.

 “It’s an
already-built facility, and it’s 1,000 times more convenient to move to an
already existing facility,” Reed said. “There is high demand for quality
assembly and distribution facilities. There will be no net loss to the city.”