Jewel Spiffs Up Stores, Anticipates Wal-Mart

By Kevin Robinson in Food on Feb 24, 2009 5:20PM

As Wal-Mart gets ready for Round Two of the Retail Wars in Chicago, Supervalu, which owns Jewel-Osco, is remodeling 25 local stores to stay competitive in the market, Crain's is reporting.

Supervalu Inc. will spend as much as $125 million in the next year to remodel 25 local Jewel stores, analysts estimate. Including those remodeled over the past year, about a third of Supervalu's 186 Jewel stores will have gotten a face-lift and expanded offerings by the time the effort concludes.

Jewel is betting that new, shiny displays and bigger meat, produce and deli departments will stem the loss of customers to Wal-Mart, which offers groceries for as much as 15% less.

"Supermarkets can't compete with Wal-Mart on price, so their only alternative is to try to improve the ambiance and selection," says Mitch Corwin, an analyst in Chicago with Morningstar Inc. "Jewel is clearly playing defensive against Wal-Mart."

No word yet on whether the Jewel-Osco makeover includes hardline union-busting tactics or forced overtime.

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