Ten of the stores will be sold to Kroger’s Harris Teeter brand, eight will go to the Kroger Mid-Atlantic Division and three will be sold to Food Lion. Supervalu said it is exploring potential transactions to sell the remaining stores to wholesale customers and certain Farm Fresh employees.

“Exiting the Farm Fresh banner will enable us to allocate greater resources and energy toward the strategic growth of our wholesale business,” said Mark Gross, president and CEO of Supervalu. “This decision was not taken lightly, given the impact on our employees and the communities we serve, but we strongly believe this decision is in the best long-term financial and strategic interest of our business.”

Supervalu expects the buyers to offer positions to Farm Fresh employees, the company said. If not, it will offer severance to eligible workers. All 38 Farm Fresh locations employ approximately 3,300.

Food Lion said the three locations it purchased will remain open as Farm Fresh stores until the transaction is complete, which is expected in May. Pharmacies at all locations will also remain open through the transition and will be operated by Food Lion upon completion of the transaction. 

“Over the past two years, we’ve been working diligently and rapidly to transform our business to become the wholesale supplier of choice for grocery retailers across the United States,” Gross said. “In 2016, we sold Save-A-Lot and its network of approximately 1,350 retail locations. Last year, we acquired Unified Grocers and Associated Grocers of Florida, which when combined with substantial organic growth, added more than $5 billion in run rate sales to bring our core wholesale business to nearly $13 billion ... We also continue to aggressively pursue other important initiatives, including the monetization of real estate through sale leaseback transactions and cost reduction across the company. We are confident our efforts are driving growth and enhancing our competitive position.”