Supervalu Not Such a Supermarket

Stock quotes in this article: KR , SVU  

Supervalu (SVU Quote) is raising a red flag, warning first-quarter earnings will be significantly below expectations.

The dreary news sent shares of the supermarket chain plunging 12% to $13.77 in afternoon trading.

Despite price cuts and higher level of promotions -- and the intuitive sense that it would perform well in a slumping economy; its name, after all, combines the words "super" and "value" -- cutbacks by consumers are taking a toll on the grocery chain.

Analysts forecast a profit of 65 cents a share for the quarter ended June 20.

While Supervalu is feeling strained, rival Kroger(KR Quote) is having more success. The nation's largest grocer posted a posted 12% gain in first-quarter earnings on Tuesday and reaffirmed its full-year outlook in the range of $2 and $2.05 a share.

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