10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended February 28, 2004

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from                     to                     

Commission file number: 1-5418

SUPERVALU INC.

(Exact name of registrant as specified in its charter)

Delaware	41-0617000
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
11840 Valley View Road Eden Prairie, Minnesota (Address of principal executive offices)	55344 (Zip Code)

Registrant’s telephone number, including area code: (952) 828-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, par value $1.00 per share	New York Stock Exchange
Preferred Share Purchase Rights	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes  x    No  ¨

The aggregate market value of the voting stock held by non-affiliates of the Registrant as of September 6, 2003 was approximately $3,257,057,854 (based upon the closing price of Registrant’s Common Stock on the New York Stock Exchange on September 5, 2003).

Number of shares of $1.00 par value Common Stock outstanding as of April 24, 2004: 135,328,998.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of Registrant’s definitive Proxy Statement filed for the Registrant’s 2004 Annual Meeting of Stockholders are incorporated by reference into Part III, as specifically set forth in Part III.

PART I

ITEM 1.    BUSINESS

General Development

SUPERVALU is one of the largest companies in the United States grocery channel. SUPERVALU conducts its retail operations under three retail food store formats: extreme value stores primarily under the retail banner Save-A-Lot; price superstores, under the regional retail banners of Cub Foods, Shop ’n Save, Shoppers Food Warehouse and bigg’s; and supermarkets, under the regional retail banners of Farm Fresh, Scott’s and Hornbacher’s. As of the close of the fiscal year, the company conducted its retail operations through 1,483 stores, including 821 licensed extreme value stores. SUPERVALU also provides food distribution and related logistics support services across the United States retail grocery channel. As of the close of the fiscal year, the company served as the primary grocery supplier to approximately 2,470 retail food stores in 48 states, in addition to its own regional banner store network, and as a secondary supplier to approximately 660 stores.

SUPERVALU is focused on retail growth through targeted new store development, remodel activities, licensee growth and acquisitions. During fiscal 2004, the company added 66 net new stores through new store development. The company’s plans also include leveraging its distribution operations by providing logistics and service solutions through an efficient supply chain, which will allow it to affiliate new independent customers and expand its recently launched Advantage Logistics third party logistics business. Consolidation opportunities in the food distribution industry may provide another avenue for growth.

In September 2003, the company acquired certain grocery distribution operations in the Midwest, formerly owned by Fleming, in exchange for its New England operations, pursuant to an Asset Exchange Agreement with C&S Wholesale Grocers (the “Asset Exchange”). Overall revenues declined as a result of the Asset Exchange, but the efficiency of the company’s operations were enhanced as the new business was absorbed by the company’s existing Midwestern facilities. The company has estimated that the Asset Exchange will benefit full year fiscal 2005 earnings by $0.07 to $0.10 per share.

SUPERVALU INC., a Delaware corporation, was organized in 1925 as the successor to two wholesale grocery firms established in the 1870’s. The company’s principal executive offices are located at 11840 Valley View Road, Eden Prairie, Minnesota 55344 (Telephone: 952-828-4000). Unless the discussion in this Annual Report on Form 10-K indicates otherwise, all references to the “company,” “SUPERVALU” or “Registrant” relate to SUPERVALU INC. and its majority-owned subsidiaries.

The company makes available free of charge at its internet website (www.supervalu.com) various corporate governance materials, its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission. Information on the company’s website is not deemed to be incorporated by reference into this Annual Report on Form 10-K.

The company will also provide its SEC filings free of charge upon written request to the Corporate Secretary, SUPERVALU INC., P.O. Box 990, Minneapolis, MN 55440.

Additional description of the company’s business is found in Part II, Item 7 of this report.

Financial Information About Reportable Segments

The company’s business is classified by management into two reportable segments: Retail food and food distribution. Retail food operations include three retail food store formats: extreme value stores, regional price superstores and regional supermarkets. The retail formats include results of food stores owned and results of

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sales to extreme value stores licensed by the company. Food distribution operations include results of sales to affiliated food stores, mass merchants and other customers, and other logistics arrangements. Management utilizes more than one measurement and multiple views of data to assess segment performance and to allocate resources to the segments. However, the dominant measurements are consistent with the consolidated financial statements. The financial information concerning the company’s operations by reportable segment for the years ended February 28, 2004, February 22, 2003 and February 23, 2002 is contained on page F-5.

Retail Food Operations

Overview.    At February 28, 2004, the company conducted its retail food operations through a total of 1,483 retail stores, including 821 licensed extreme value stores. Its principal retail food formats include extreme value stores, regional price superstores and regional supermarkets. These diverse formats enable the company to operate in a variety of markets under widely differing competitive circumstances. Based on revenues, the company was the 11^th largest grocery retailer in the United States as of February 28, 2004. In fiscal 2005, the company anticipates opening approximately 110 to 140 new extreme value stores and eight to 10 regional banner stores and continuing its store remodeling program.

Extreme Value Stores.    The company operates extreme value stores primarily under the Save-A-Lot banner. Save-A-Lot holds the number one market position, based on revenues, in the extreme value grocery-retailing sector. Save-A-Lot food stores typically are approximately 15,000 square feet in size, and stock approximately 1,250 high volume food items generally in a single size for each product sold. At a Save-A-Lot store, the majority of the products offered for sale are custom branded products. The specifications for the Save-A-Lot custom branded product emphasize quality and characteristics that the company believes are comparable to national brands. The company’s attention to the packaging of Save-A-Lot products has resulted in the company registering a number of its custom labels.

After the company’s fiscal 2003 acquisition of a small dollar store general merchandise operator, Deal$ Nothing Over A Dollar (“Deals”), the company started testing several new prototypes of an extreme value combination store, offering both food and dollar-priced general merchandise. During fiscal 2004, the company converted or opened 166 combination stores.

At fiscal year end, there were 1,225 extreme value stores located in 37 states, of which 821 were licensed. These stores are supplied from 16 dedicated distribution centers.

Price Superstores.    The company’s price superstores hold the number one, two or three market position in most of their markets. The price superstore focus is on providing every day low prices and product selection across all departments. Most of the company’s price superstores offer traditional dry grocery departments, along with strong perishable departments and pharmacies. Price superstores carry over 45,000 items and generally range in size from 45,000 to 100,000 square feet with an average size of approximately 64,000 square feet.

At fiscal year end, the company owned and operated 199 price superstores under the Cub Foods, Shop ’n Save, Shoppers Food Warehouse and bigg’s banners in 12 states; an additional 29 stores were franchised to independent retailers under the Cub Foods banner. In-store pharmacies are operated in 176 of the price superstores.

The owned Cub Food stores operate primarily in the Minneapolis/St. Paul and Chicago markets; Shop ’n Save operates primarily in the St. Louis and Pittsburgh markets; Shoppers Food Warehouse operates in the Washington D.C. and Baltimore markets; and bigg’s operates primarily in the Cincinnati market.

Supermarkets.    The company’s traditional supermarkets hold the number one or two market positions in their principal markets. This format combines a grocery store that offers traditional dry grocery and fresh food departments, and a variety of specialty departments that may include floral, seafood, expanded health and beauty care, video rental, cosmetics, photo finishing, delicatessen, bakery, as well as an in-store bank and a traditional

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drug store that includes a pharmacy. A typical supermarket carries approximately 32,000 items and generally ranges in size from 30,000 to 65,000 square feet with an average size of approximately 50,000 square feet.

At fiscal year end, the company operated 59 supermarkets under the Farm Fresh, Scott’s and Hornbacher’s banners. The Farm Fresh stores operate primarily in the Virginia Beach, Virginia market; the Scott’s stores operate in the Fort Wayne, Indiana market; and the Hornbacher’s stores operate in the Fargo, North Dakota market. In-store pharmacies are operated in 29 of the supermarkets.

Food Distribution Operations

Overview.    SUPERVALU provides logistics and service solutions to retailers for food and non-food products and is the largest public company food wholesaler in the nation. At February 28, 2004, the company was affiliated with approximately 2,470 stores as their primary supplier, excluding the company’s own regional banner store network, and approximately 660 additional stores as a secondary supplier. SUPERVALU’s customers include single and multiple grocery store independent operators, regional and national chains, mass merchants and the military. Such customers are located in 48 states, and range in size from small convenience stores to 200,000 square foot supercenters.

Products Supplied.    The company offers and supplies its distribution customers with a wide variety and selection of food and non-food products, including groceries, meats, dairy products, frozen foods, deli, bakery, fresh fruits and vegetables, health and beauty aids, general merchandise, seasonal items and tobacco products. Such products include national and regional brands, the company’s own lines of private label products and the private label products of its independent customers. The company has no significant long-term purchase obligations and considers that it has adequate and alternative sources of supply for most of its purchased products.

SUPERVALU offers two tiers of private label products to its customers: first quality products under such private labels as CUB, FLAVORITE, HOMEBEST, IGA, RICHFOOD, SHOP ’N SAVE, SUPERCHILL, HEALTHY GENERATIONS, DAILY SOURCE, NUTRIPLAN and CHEF’S CIRCLE; and economy products under the private label of SHOPPERS VALUE. SUPERVALU supplies private label merchandise over a broad range of products in the majority of departments in the store. These products are produced to the company’s specifications by many suppliers.

Logistics Network.    The company has established a network of strategically located distribution centers utilizing a multi-tiered logistics system. The network includes facilities that carry slow turn or fast turn groceries, perishables, general merchandise and health and beauty care products. The network comprises 24 distribution facilities. The company believes that its multi-tiered distribution network increases buying scale, improves operating efficiencies and lowers costs of operations. The company is continuing to work on business initiatives that will deliver lower costs of operations. Deliveries to retail stores are made from the company’s distribution centers by company-owned trucks, third party independent trucking companies or customer-owned trucks. In addition, many types of meats, dairy products, bakery and other products purchased from the company are delivered directly by suppliers to retail stores under programs established by the company.

The company also offers third party logistics solutions, primarily to the grocery industry, through its Advantage Logistics operation which was formed in 2002.

Trademarks

The company offers some customers the opportunity to franchise a concept or license a service mark. This program helps the customer compete by providing, as part of the franchise or license program, a complete business concept, group advertising, private label products and other benefits. The company is the franchisor or licensor of certain service marks such as CUB FOODS, SAVE-A-LOT, DEAL$ NOTHING OVER A DOLLAR,

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ADVANTAGE LOGISTICS, SENTRY, FESTIVAL FOODS, COUNTY MARKET, SHOP ’N SAVE, NEWMARKET, IGA, FOODLAND, JUBILEE, SUPERVALU and SUPERVALU PHARMACIES. The company registers a substantial number of its trademarks/service marks in the United States Patent and Trademark Office, including many of its private label product trademarks and service marks. See “Retail Food Operations—Extreme Value Stores” and “Food Distribution Operations—Products Supplied” for further information. The company considers certain of its trademarks and service marks to be of material importance to its business and actively defends and enforces such trademarks and service marks.

Competition

The company’s retail food and food distribution businesses are highly competitive. The company believes that the success of its retail food and food distribution businesses are dependent upon the ability of the company’s retail food operations, and the retail food stores with whom it is affiliated as a supplier, to compete successfully with other retail food stores in a consolidating market. Principal competition comes from local, regional and national chains operating under a variety of formats that devote square footage to selling food (i.e. supercenters, supermarkets, extreme value stores, membership warehouse clubs, dollar stores, drug stores, convenience stores, various formats selling prepared foods, and other specialty and discount retailers), as well as from independent food stores. The company believes that the principal competitive factors that face its owned stores, as well as the stores owned by retailers it supplies, include the location and image of the store, the price, quality and variety of products, and the quality and consistency of service.

The food distribution business competes directly with a number of food wholesalers. The company believes it competes in this supply chain on the basis of product price, quality and assortment, schedule and reliability of deliveries, the range and quality of services provided, service fees, and the location of distribution facilities.

Employees

At February 28, 2004, the company had approximately 55,200 employees. Approximately 23,600 employees are covered by collective bargaining agreements. During fiscal 2004, 15 collective bargaining agreements covering 3,500 employees were re-negotiated. The only work stoppage in fiscal 2004 was a 28-day strike in the third quarter in the St. Louis market where the company operates 21 regional banner stores. In fiscal 2005, 22 collective bargaining agreements covering approximately 9,300 employees will expire. The company believes that it has generally good relations with its employees.

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ITEM 2.    PROPERTIES

Retail Food Operations

The following table is a summary of the corporate retail stores operated by the company under its principal retail formats as of February 28, 2004:

Retail Format	Banner	Location and Number of Corporate Stores	Square Footage Owned (Approximate)	Square Footage Leased (Approximate)
ExtremeValue Stores	Save-A-Lot1	Alabama (1), Arizona (2), Arkansas (1), California (19), Connecticut (5), Delaware (6), Florida (73), Georgia (17), Illinois (18), Louisiana (10), Maryland (12), Massachusetts (9), Mississippi (5), Missouri (10), New Jersey (11), New York (5), Ohio (31), Pennsylvania (24), Rhode Island (3), South Carolina (3), Tennessee (5), Vermont (1), Virginia (7), Wisconsin (2)	665,000	3,586,000
	Deals/Super Deals	Alabama (2), Arkansas (4), Georgia (3), Illinois (21), Indiana (9), Iowa (2), Kansas (6), Kentucky (9), Michigan (1), Missouri (28), Ohio (27), Oklahoma (3), Pennsylvania (1), Tennessee (6), West Virginia (1), Wisconsin (1)	—	1,244,000
	Save-A-Lot Distribution Centers	California (1), Florida (1), Georgia (1), Illinois (1), Indiana (1), Kentucky (1), Louisiana (1), Maryland (1), Michigan (1), Missouri (1), New York (1), Ohio (2), Tennessee (1), Texas (1), Wisconsin (1)	2,779,000	1,697,000
Price Superstores	Cub Foods2	Illinois (29), Iowa (3), Minnesota (35), Wisconsin (9)	2,547,000	2,807,000
	Shop ’n Save	Illinois (14), Missouri (21), Pennsylvania (19)	471,000	2,362,000
	Shoppers Food Warehouse	Delaware (1) Maryland (37), Virginia (20)	—	3,206,000
	bigg’s	Indiana (1), Kentucky (1), Ohio (9)	158,000	1,129,000
Supermarkets	Farm Fresh	Virginia (36)	—	1,736,000
	Hornbacher’s	Minnesota (1), North Dakota (4)	107,000	113,000
	Scott’s	Indiana (18)	293,000	680,000

¹ Excludes 821 Save-A-Lot stores that are licensed by independent retailers.

² Excludes 29 Cub Foods stores that are franchised by independent retailers.

The extreme value stores that are leased by the company generally have terms of 5 to 10 years plus renewal options. The price superstores and supermarkets that are leased by the company generally have terms of 15 to 25 years plus renewal options.

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Food Distribution Operations

The following table is a summary of the company’s principal distribution centers and office space utilized in the company’s food distribution operations as of February 28, 2004:

Region	Location and Number of Distribution Centers	Square Footage Owned (Approximate)	Square Footage Leased (Approximate)
Central Region	Indiana (1), Ohio (1), Pennsylvania (2), West Virginia (1)	2,159,000	372,000
Midwest Region	Illinois (2), Missouri (1), Texas (1), Wisconsin (2)	2,394,000	823,000
Northern Region	Minnesota (1), North Dakota (2)	2,132,000	90,000
Northwest Region	Montana (1), Washington (2)	1,557,000	—
Southeast Region	Alabama (2), Florida (1), Mississippi (1)	1,528,000	627,000
Eastern Region	Maryland (1), Pennsylvania (1), Virginia (1)	1,145,000	926,000

Additional Property

The company’s principal executive offices are located in a 180,000 square foot corporate headquarters facility located in Eden Prairie, Minnesota, a western suburb of Minneapolis, Minnesota. This headquarters facility is located on a site of 140 acres owned by the company. Other facilities allocated for corporate use, include approximately 189,000 square feet of leased office space located in Chanhassen, Minnesota, 53,000 square feet of owned office space located in Stillwater, Minnesota and 35,000 square feet of leased office space in Denver, Colorado.

Additional information on the company’s properties can be found on pages F-24 through F-26 in the Leases note in the accompanying Notes to Consolidated Financial Statements. Management of the company believes its physical facilities and equipment are adequate for the company’s present needs and businesses.

ITEM 3.    LEGAL PROCEEDINGS

In July and August 2002, several class action lawsuits were filed against the company and certain of its officers and directors in the United States District Court for the District of Minnesota on behalf of purchasers of the company’s securities between July 11, 1999 and June 26, 2002. The lawsuits have been consolidated into a single action, in which it is alleged that the company and certain of its officers and directors violated Federal securities laws by issuing materially false and misleading statements relating to its financial performance. On April 29, 2004, the District Court for the District of Minnesota granted preliminary approval to a stipulation of settlement between the company and plaintiffs. A hearing for final approval of the settlement is scheduled for August 16, 2004. The settlement will have no material impact to the company’s consolidated statement of earnings or consolidated financial position.

The company is a party to various other legal proceedings arising from the normal course of business activities, none of which, in management’s opinion, is expected to have a material adverse impact on the company’s consolidated statement of earnings or consolidated financial position.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There was no matter submitted during the fourth quarter of fiscal year 2004 to a vote of the security holders of the Registrant.

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EXECUTIVE OFFICERS OF THE REGISTRANT

The following table provides certain information concerning the executive officers of the company as of April 15, 2004.

Name	Age	Present Position	Year Elected to Present Position	Other Positions Recently Held With the company
Jeffrey Noddle	57	Chairman of the Board of Directors, Chief Executive Officer and President	2002	Director, Chief Executive Officer and President, 2001-2002; Director, President and Chief Operating Officer, 2000-2001; Executive Vice President, President and Chief Operating Officer, Wholesale Food Companies, 1995-2000
David L. Boehnen	57	Executive Vice President	1997
John H. Hooley	52	Executive Vice President; President and Chief Operating Officer, Retail Foods	2002	Senior Vice President; President and Chief Executive Officer, Cub Foods, 2000-2002; Vice President; President and Chief Executive Officer, Cub Foods, 1992-1999
Michael L. Jackson	50	Executive Vice President; President and Chief Operating Officer, Distribution	2001	Senior Vice President, Retail Food Companies, 1999-2001; President, Northwest Region, 1995-1999
Pamela K. Knous	50	Executive Vice President and Chief Financial Officer	1997
Robert W. Borlik	55	Senior Vice President, Chief Information Officer	1999
J. Andrew Herring	45	Senior Vice President; Executive Vice President, Retail Pharmacies	2002	Senior Vice President, Corporate Development 1999-2002; Vice President, Corporate Development and External Relations, 1998-1999
Gregory C. Heying	55	Senior Vice President, Distribution	1994
Sherry M. Smith	42	Senior Vice President, Finance and Treasurer	2002	Vice President, Corporate Controller, 1998-2002
Ronald C. Tortelli	57	Senior Vice President, Human Resources	1988
Leland J. Dake	47	Vice President, Merchandising, Distribution Food Companies	1998
Stephen P. Kilgriff	62	Vice President, Legal	2000	Associate General Counsel, 1996-2000
David M. Oliver	46	Vice President, Controller	2004

The term of office of each executive officer is from one annual meeting of the directors until the next annual meeting of directors or until a successor for each is elected. There are no arrangements or understandings between any of the executive officers of the company and any other person pursuant to which any of the executive officers were selected as an officer of the company. There are no family relationships between or among any of the executive officers of the company.

Each of the executive officers of the company has been in the employ of the company or its subsidiaries for more than five consecutive years, except for John H. Hooley and David M. Oliver.

Mr. Hooley was elected to his current position in April 2002. From November 2000 to April 2002, he was Senior Vice President and President and Chief Executive Officer, Cub Foods. From February 2000 to September

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2000, he was Executive Vice President of Partner Alliances, 24K.com, a loyalty marketing company and affiliate of the Carlson Companies, Inc. From November 1992 to September 1999, he was presient and Chief Executive Officer of Cub Foods.

Mr. Oliver was elected to his current position in April 2004. From November 1999 to April 2004, he was Chief Financial Officer, Arden Group, Inc. From August 1998 until joining Arden Group, Inc. in November 1999, he was an independent consultant.

DIRECTORS OF THE REGISTRANT

The following table provides certain information concerning the directors of the company as of April 15, 2004.

Name	Age	Present Position With the Company and Committees of the Board	Professional Background
Irwin Cohen	63	Director since 2003 Audit Committee Finance Committee	Retired; Partner with Deloitte & Touche LLP (a professional services firm, providing accounting, tax and consulting services), 1972-2003, Global Managing Partner of the Consumer Products, Retail and Services Practice of Deloitte & Touche LLP, 1997-2003, Managing Partner of Deloitte & Touche LLP’s U.S. Retail Practice, 1980-2002; Director of Phoenix House Foundation and Beall’s Inc.
Ronald E. Daly	57	Director since 2003 Executive Personnel and Compensation Committee Finance Committee	Chief Executive Officer and President of Oće USA Holding, Inc., a subsidiary of Oće N.V. (a supplier of digital document management technology services), 2002-present; President of RR Donnelley Print Solutions (a print solutions company), 1997-2002; President of RR Donnelley Telecommunications (a telecommunications industry printing company), 1995-2001; Board of Executive Directors of Oće N.V.
Lawrence A. Del Santo	70	Director since 1997 Director Affairs Committee Chairman Executive Personnel and Compensation Committee	Retired; Chief Executive Officer of The Vons Companies (a retail grocery company), 1994-1997; Director of PETsMART, Inc.
Susan E. Engel	57	Director since 1999 Audit Committee Executive Personnel and Compensation Committee	Chairwoman of the Board and Chief Executive Officer of Department 56, Inc. (a designer, importer and distributor of fine quality collectibles and other giftware products), 1997-present; Director of Wells Fargo & Company
Edwin C. Gage	63	Director since 1986 Director Affairs Committee Executive Personnel and Compensation Committee, Chairman	Chairman and Chief Executive Officer of GAGE Marketing Group, L.L.C. (an integrated marketing services company), 1991–present
Garnett L. Keith, Jr.	68	Director since 1984 Audit Committee, Chairman Finance Committee	Chairman and Chief Executive Officer of SeaBridge Investment Advisors, LLC (a registered investment advisor), 1996-present; Director of AEA Investors LLC, Whitecap Capital LLC, Pan-Holding Societe Anonyme and Phillippe Investment Management

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Name	Age	Present Position With the Company and Committees of the Board	Professional Background
Richard L. Knowlton	71	Director since 1994 Director Affairs Committee Executive Personnel and Compensation Committee	Chairman of the Hormel Foundation (a charitable foundation controlling 46.2% of Hormel Foods Corporation), 1995-present; Director of ING America Insurance Holdings, Inc.
Charles M. Lillis	62	Director since 1995 Audit Committee Finance Committee, Chairman	General Partner, LoneTree Capital Management (a private equity company), 2000-present; Chairman, President and Chief Executive Officer of MediaOne Group, Inc. (a broadband communications company), 1998-2000; Director of Charter Communications Inc. and Williams Companies, Inc.
Jeffrey Noddle	57	Director since 2000 Chairman of the Board, Chief Executive Officer and President of the Company, 2002-present Finance Committee	See table “Executive Officers of the Registrant” above; Director of Donaldson Company, Inc. and General Cable Corporation
Harriet Perlmutter*	72	Director since 1978 Executive Personnel and Compensation Committee Finance Committee	Trustee of the Papermill Playhouse (the State Theatre of New Jersey)
Marissa Peterson	42	Director since 2003 Director Affairs Committee Finance Committee	Executive Vice President, Worldwide Operations and Services and Chief Customer Advocate for Sun Microsystems, Inc. (a provider of hardware, software and services) 2002-present. Executive Vice President, Worldwide Operations 1998-2002; Director of Couisint, Lucille Packard Children’s Hospital and a member of the Board of Trustees of Kettering Univeristy
Steven S. Rogers	46	Director since 1998 Director Affairs Committee Audit Committee	Clinical Professor of Finance and Management at J.L. Kellogg Graduate School of Management at Northwestern University, 1995-present; Director of Duquesne Light, Inc. and S.C. Johnson & Son, Inc.

* In accordance with Board policies, Ms. Perlmutter is retiring from the Board of Directors on May 26, 2004.

PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The company’s common stock is listed on the New York Stock Exchange under the symbol SVU. As of April 24, 2004, there were 135,328,998 shares of common stock outstanding. At that date, there were 6,782 stockholders of record, excluding individual participants in security position listings. The information called for by Item 5 as to the sales price for the company’s common stock on a quarterly basis during the last two fiscal years and dividend information is found under the heading “Common Stock Price” in Part II, Item 7 below.

During the fiscal year ended February 28, 2004, the company issued 17,000 shares of unregistered restricted common stock as stock bonuses to certain employees. The issuance of such shares did not constitute a “sale” within the meaning of Section 2(3) of the Securities Act of 1933, as amended.

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ITEM 6. SELECTED FINANCIAL DATA

The information called for by Item 6 is found within the Five Year Financial and Operating Summary on page F-2.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

SUPERVALU is one of the largest grocery companies in the United States. We operate within two complementary businesses in the grocery food industry, grocery retail and food distribution. At February 28, 2004, we conducted our retail operations through a total of 1,483 stores, including 821 licensed locations. Principal formats include extreme value stores, regional price superstores and regional supermarkets. Our food distribution operations network spans 48 states and we serve as primary grocery supplier to approximately 2,470 stores, in addition to our own regional banner store network, as well as serving as secondary grocery supplier to approximately 660 stores.

For the past several years, the approximate $500 billion revenue grocery food industry has been consolidating. As a result, market share has been concentrated in the larger grocery food companies. We participated in that consolidation through selective acquisition activities and the exit of certain markets. Based on revenues today, we would be ranked as the largest extreme value food retailer, 11th largest grocery retailer, and largest public company food wholesaler in the United States.

In addition to consolidation activities, the grocery industry has experienced store saturation driven primarily by the continued increase in square footage devoted to food in supercenters, club stores, mass merchandisers, dollar stores, drug stores and other alternate formats as well as organic growth by traditional supermarket operators. As a result, same-store sales growth for the industry has been soft, pressuring profitability levels in the industry as operating costs continue to rise at a rate faster than sales growth. We expect this industry environment to continue for the foreseeable future.

In fiscal 2004, our businesses benefited from the bankruptcy of Fleming Companies, Inc., formerly one of our largest food wholesale competitors. By entering into an asset exchange with C&S, we were able to affiliate certain former Fleming distribution operations in the Midwest in exchange for our New England operations. Even though overall revenues declined, approximately $200 million on an annual basis, as a result of the Asset Exchange, the efficiencies of our remaining operations were greatly enhanced as volume was concentrated in our existing facilities. It is expected that this transaction will provide incremental net earnings per share in fiscal 2005 of $.07 to $.10 per share.

The grocery industry is also affected by the general economic environment and its impact on consumer spending behavior. In fiscal 2003, we experienced moderate deflation in our product costs in a weak economic environment. We would characterize fiscal 2004 as a year with a modestly improving economy and more normal levels of consumer spending and product cost inflation. For fiscal 2005, we expect a modest inflationary environment and further economic recovery.

In fiscal 2004, most US businesses, including the labor intensive grocery industry were impacted by another year of rapidly rising health care and pension costs. These rising costs impacted the overall profitability levels of the food industry and have become a pivotal issue in labor negotiations for unionized employees who bargain for health and retirement benefits in addition to wages. Approximately 42% of SUPERVALU’s employees are unionized. In the St. Louis market, where we operate 21 regional supermarkets, we experienced a 28-day strike in the third quarter of fiscal 2004 (the “St. Louis Strike”). Approximately 40% of our unionized workforce are represented by contracts that are up for renewal in fiscal 2005.

All of these industry factors impact our food distribution customer base. As a result, we continue to experience revenue attrition in our food distribution operations in a historical range of approximately 2% to 4%.

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All the above factors will continue to impact our industry and our company in fiscal 2005.

We believe we can be successful against this industry backdrop with our regional retail formats that focus on local execution, merchandising, and consumer knowledge. In addition, our operations benefit from our efficient and low-cost supply chain and economies of scale as we leverage our retail and distribution operations. Save-A-Lot, our extreme value format, has nationwide potential, and currently operates in 37 states. After our fiscal 2003 acquisition of Deals, we tested in fiscal 2004 several new prototypes of an extreme value combination store, offering both food and dollar general merchandise. We are pleased with the performance of the new prototypes and the majority of our new extreme value food stores will be a type of combination store in the future. We plan to expand regional retail banner square footage through selective new store growth in key markets where we have significant market share. In addition, we will supplement regional retail store growth with continued focus on remodel activities. Given the life cycle maturity of our distribution business with its inherent attrition rate, future growth in food distribution will be modest and primarily achieved through serving new independent customers, net growth from existing customers and further consolidation opportunities. We will remain committed to streamlining our operations and improving our return on invested capital through a variety of initiatives.

RESULTS OF OPERATIONS

Highlights of results of operations as reported were as follows:

	February 28, 2004 (53 weeks)					February 22, 2003 (52 weeks)					February 23, 2002 (52 weeks)
	(In millions)
Net sales	$	20,209.7		100.0	%	$	19,160.4		100.0	%	$	20,293.0		100.0	%
Cost of sales		17,372.4		85.9			16,567.4		86.5			17,704.2		87.2
Selling and administrative expenses		2,220.4		11.0			2,020.2		10.5			2,037.7		10.1
Restructure and other charges		15.5		0.1			2.9		—			46.3		0.2
Operating earnings	$	601.4		3.0		$	569.9		3.0		$	504.8		2.5
Interest expense		165.6		0.8			182.5		1.0			194.3		1.0
Interest income		(19.1	)	(0.1	)		(20.6	)	(0.1	)		(21.5	)	(0.1	)
Earnings before income taxes	$	454.9		2.3		$	408.0		2.1		$	332.0		1.6
Income tax expense		174.8		0.9			151.0		0.8			133.7		0.6
Net earnings	$	280.1		1.4	%	$	257.0		1.3	%	$	198.3		1.0	%

In fiscal 2003, the company adopted Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets”, which required it to cease amortizing goodwill and test annually for impairment. Goodwill amortization of $48.4 million was included in fiscal 2002.

Comparison of fifty-three weeks ended February 28, 2004 (2004) with fifty-two weeks ended February 22, 2003 (2003):

In fiscal 2004, the company achieved net sales of $20.2 billion compared with $19.2 billion last year. Net earnings for fiscal 2004 were $280.1 million and diluted earnings per share were $2.07 compared with net earnings of $257.0 million and diluted earnings per share of $1.91 last year. Fiscal 2004 was a 53 week fiscal year, resulting in an extra week in the fourth quarter, which generated approximately $360.0 million in net sales and contributed approximately $.07 to diluted earnings per share. Fiscal 2004 operating results include the impact of the Asset Exchange, the sale or closure of its Denver based operations that included nine retail stores and a food distribution facility (the “Denver Disposition”) and the St. Louis Strike.

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Net Sales

Net sales for fiscal 2004 were $20.2 billion, an increase of 5.5 percent from last year. Retail food sales were 52.2 percent of net sales for fiscal 2004 compared with 51.4 percent last year. Food distribution sales were 47.8 percent of net sales for fiscal 2004 compared with 48.6 percent last year.

Retail food sales for fiscal 2004 increased 7.1 percent compared with last year, primarily reflecting new store openings, increases in same-store sales and the benefit of the extra week. Same-store retail sales for fiscal 2004 were positive 2.1 percent.

Fiscal 2004 store activity, including licensed units, resulted in 107 new stores opened and 41 stores closed, including the sale or closure of our Denver based stores, for a total of 1,483 stores at year end. Total square footage increased approximately 3.8 percent over the prior year.

Food distribution sales for fiscal 2004 increased 3.7 percent compared with last year, primarily reflecting the impact of new customer affiliations and the benefit of the extra week, which more than offset customer attrition, and the net revenue loss as a result of the Asset Exchange.

Gross Profit

Gross profit (calculated as net sales less cost of sales), as a percent of net sales, was 14.1 percent for fiscal 2004 compared with 13.5 percent last year. The increase in gross profit, as a percent of net sales, primarily reflects improved merchandising execution for retail, including the expansion of general merchandise in the extreme value format, and the growing proportion of our retail food business, which operates at a higher gross profit margin as a percentage of net sales than does the food distribution business.

Selling and Administrative Expenses

Selling and administrative expenses, as a percentage of net sales, were 11.0 percent for fiscal 2004 compared with 10.5 percent last year. The increase in selling and administrative expenses, as a percent of net sales, primarily reflects increases in employee benefit and incentive related costs, costs associated with the Denver Disposition, including related reserves for closed stores, $10.8 million in additional reserves for non-operating properties and approximately $5 million in net litigation settlements.

Restructure and Other Charges

In fiscal 2004, the company incurred $15.5 million, or 0.1 percent of net sales, in pre-tax restructure and other charges, consisting of $8.5 million for changes in estimates on exited real estate in certain markets for food distribution and $7.0 million for increased liabilities associated with employee benefit related costs from previously exited food distribution facilities.

Operating Earnings

Operating earnings for fiscal 2004 increased 5.5 percent to $601.4 million compared with $569.9 million last year. Fiscal 2004 operating earnings include $15.5 million in pre-tax restructure and other charges. Fiscal 2003 operating earnings include $2.9 million in pre-tax restructure and other charges. Retail food operating earnings for fiscal 2004 increased 1.7 percent to $444.0 million, or 4.2 percent of net sales, from last year’s operating earnings of $436.5 million, or 4.4 percent of net sales. The increase in retail food operating earnings was primarily due to growth of new stores, improved merchandising execution and the benefit of the extra week which were substantially offset by increases in employee benefit and incentive related costs, costs associated with the Denver Disposition, including related reserves for closed stores and the impact of the St. Louis Strike. Food distribution operating earnings for fiscal 2004 increased 29.6 percent to $222.5 million, or 2.3 percent of net sales, from last year’s operating earnings of $171.6 million, or 1.8 percent of net sales. The increase in food distribution operating earnings primarily reflects the increase in sales volume, benefits of efficiency initiatives implemented during the course of the prior year and the benefit of the extra week.

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Net Interest Expense

Interest expense was $165.6 million in fiscal 2004 compared with $182.5 million last year. The decrease primarily reflects lower borrowing levels that more than offset $5.8 million in pre-tax costs related to the early redemption of $100 million of debt at a price of 103.956 percent in the third quarter of fiscal 2004. Interest income was $19.1 million in fiscal 2004 compared with $20.6 million last year.

Income Taxes

The effective tax rate was 38.4 percent and 37.0 percent in fiscal 2004 and fiscal 2003, respectively. The increase in the effective tax rate in the current year was due to $7.6 million of taxes due on the Asset Exchange.

Net Earnings

Net earnings were $280.1 million, or $2.07 per diluted share, in fiscal 2004 compared with net earnings of $257.0 million, or $1.91 per diluted share last year.

Weighted average diluted shares increased to 135.4 million fiscal 2004 compared with 134.9 million shares last year, reflecting the net impact of stock option activity and shares repurchased under the treasury stock program.

Comparison of fifty-two weeks ended February 22, 2003 (2003) with fifty-two weeks ended February 23, 2002 (2002):

Net Sales

Net sales for 2003 were $19.2 billion, a decrease of 5.6 percent from 2002. Retail food sales were 51.4 percent of net sales for 2003 compared with 47.1 percent for 2002. Food distribution sales were 48.6 percent of net sales for 2003 compared with 52.9 percent for 2002.

Retail food sales for 2003 increased 3.1 percent compared to 2002, primarily as a result of new store growth. Same-store retail sales for 2003 were negative 1.1 percent, impacted by approximately 1.2 percent of planned in-market expansion. Other factors contributing to the decline in same store sales performance include a weakened economy and a more intense promotional environment.

Fiscal 2003 store activity, including licensed units, resulted in 198 new stores opened and acquired, including the acquisition of 50 Deals stores and 41 stores closed or sold for a total of 1,417 stores at year end. Total square footage increased approximately 6.6 percent over the prior year.

Food distribution sales for 2003 decreased 13.3 percent compared to 2002, primarily reflecting customers lost in 2002 including the exit of the Kmart supply contract and the loss of Genuardi’s as a customer and sales losses from restructure activities, which accounted for approximately eight percent, three percent and one percent, respectively, of the decrease in food distribution sales.

Gross Profit

Gross profit (calculated as net sales less cost of sales), as a percentage of net sales, was 13.5 percent for 2003 compared to 12.8 percent for 2002. The increase in gross profit, as a percentage of net sales, reflects the growing proportion of the company’s retail food business, which operates at a higher gross profit margin as a percentage of net sales than does the food distribution business, including the higher gross profit margin of the recently acquired and opened Deals stores. Gross profit in retail benefited from improved merchandising execution. Gross profit in distribution was negatively impacted by a change in our distribution customer mix.

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Selling and Administrative Expenses

Selling and administrative expenses, as a percentage of net sales, were 10.5 percent for 2003 compared to 10.1 percent for 2002. Selling and administrative expenses include $12.5 million in store closing reserves recorded in fiscal 2002. Fiscal 2002 also includes goodwill amortization of $48.4 million. The increase in selling and administrative expenses, as a percentage of net sales, reflects the growing proportion of the company’s retail food business, which operates at a higher selling and administrative expense as a percentage of net sales than does the food distribution business, including the higher selling and administrative expense ratio of the recently acquired and opened Deals stores.

Operating Earnings

The company’s operating earnings were $569.9 million for 2003 compared to $504.8 million for 2002, a 12.9 percent increase. Fiscal 2003 operating earnings include $2.9 million for restructure and other charges. Fiscal 2002 operating earnings include $46.3 million for restructure and other charges and $12.5 million in store closing reserves. Retail food 2003 operating earnings increased 20.2 percent to $436.5 million, or 4.4 percent of net sales, from 2002 operating earnings of $363.3 million, or 3.8 percent of net sales. Fiscal 2002 retail food operating earnings include goodwill amortization of $25.3 million. The remaining increase in retail food operating earnings was primarily due to growth of new stores and improved merchandising execution in retail. Food distribution 2003 operating earnings decreased 24.4 percent to $171.6 million, or 1.8 percent of net sales, from 2002 operating earnings of $227.0 million, or 2.1 percent of net sales. Fiscal 2002 food distribution operating earnings included goodwill amortization of $23.1 million. The decrease in food distribution operating earnings primarily reflects the decrease in sales volume and a change in our distribution customer mix.

Net Interest Expense

Interest expense decreased to $182.5 million in 2003 compared with $194.3 million in 2002, reflecting lower borrowing levels and lower average interest rates, largely due to the interest rate swap agreements entered into in 2003. Interest income decreased to $20.6 million in 2003 compared with $21.5 million in 2002.

Income Taxes

The effective tax rate was 37.0 percent in 2003 compared with 40.3 percent in 2002. The decrease in the effective tax rate was due to the discontinuation of goodwill amortization as of February 24, 2002, which is not deductible for income tax purposes.

Net Earnings

Net earnings were $257.0 million, or $1.91 per diluted share, in 2003 compared with net earnings of $198.3 million, or $1.48 per diluted share in 2002.

Weighted average diluted shares increased to 134.9 million in 2003 compared with 2002 weighted average diluted shares of 134.0 million, reflecting the net impact of stock option activity and shares repurchased under the treasury stock program.

RESTRUCTURE AND OTHER CHARGES

For fiscal 2004, the company recognized pre-tax restructure and other charges of $15.5 million. The charges reflect the net adjustments to the restructure reserves and asset impairment charges of $0.6 million, $14.4 million and $0.5 million for restructure 2002, 2001 and 2000, respectively. The increases are due to continued softening of real estate in certain markets and higher than anticipated employee benefit related costs.

The following information includes only those restructure and other charges that are the result of previously initiated restructure activities. In addition, the company maintains reserves and has recorded certain impairments for properties that have been closed as part of management’s ongoing operating decisions. Those reserves and impairment charges are disclosed within the Reserves for Closed Properties and Asset Impairment section.

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Fiscal 2004 net cash outflows relating to all restructure plans were approximately $20 million. Remaining future net cash outflows primarily relate to expected net future payments on exited real estate and employee related costs, net of after-tax proceeds from the sale of owned properties. Cash outflows will be funded by cash from operations.

Restructure 2002

In fiscal 2002, the company identified additional efforts that would allow it to extend its food distribution efficiency program that began early in fiscal 2001. The additional food distribution efficiency initiatives identified resulted in pre-tax restructure charges of $16.3 million, primarily related to personnel reductions in administrative and transportation functions. Management began the initiatives in fiscal 2003 and the majority of these actions were completed by the end of fiscal 2003.

In fiscal 2003, the fiscal 2002 restructure charges were decreased by $3.6 million, including a decrease of $1.4 million due to lower than anticipated lease related costs in transportation efficiency initiatives and a decrease of $2.2 million in employee related costs due to lower than anticipated severance costs.

In fiscal 2004, the fiscal 2002 restructure charges were increased by $0.6 million due to higher than anticipated severance costs for certain employees.

Remaining reserves for the fiscal 2002 restructure plan represent future lease payments. Details of the fiscal 2002 restructure activity for fiscal 2004 are as follows:

	Balance February 22, 2003		Fiscal 2004 Usage			Fiscal 2004 Adjustment			Balance February 28, 2004
	(In thousands)
Lease related costs:
Transportation efficiency initiatives	$	1,054	$	(816	)	$	(43	)	$	195
		1,054		(816	)		(43	)		195
Employee related costs:
Administrative realignment		2,390		(3,019	)		629			—
		2,390		(3,019	)		629			—
Total restructure charges	$	3,444	$	(3,835	)	$	586		$	195

Details of the fiscal 2002 restructure activity as it relates to the number of terminated employees are as follows:

	Original Estimate	Employees Terminated in Fiscal 2003		Balance February 22, 2003	Employees Terminated in Fiscal 2004		Balance February 28, 2004
Employees	800	(650	)	150	(150	)	—

Restructure 2001

In fiscal 2001, the company completed a strategic review that identified certain assets that did not meet return objectives, provide long-term strategic opportunities or justify additional capital investments. This review process culminated in the company recording pre-tax restructure and other charges of $181.6 million, including $89.7 million for asset impairment charges, $52.1 million for lease subsidies, lease cancellation fees, future payments on exited real estate and guarantee obligations and $39.8 million for severance and employee related costs.

In fiscal 2002, the fiscal 2001 restructure and other charges were increased by $17.8 million as a result of changes in estimates primarily due to the softening real estate market, including $19.1 million for increased lease liabilities in exiting the non-core retail markets and the disposal of non-core assets, offset by a net decrease of $1.3 million in restructure reserves for the consolidation of distribution centers.

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In fiscal 2003, the fiscal 2001 restructure and other charges were increased by $8.1 million, including an $11.7 million increase to the restructure reserves offset by a decrease in asset impairment charges of $3.6 million. The reserve increase of $11.7 million was a result of changes in estimates on exited real estate primarily due to the continued softening of real estate marketed for sale, sublease or assignment in certain markets, including approximately $5 million relating to the consolidation of distribution centers, $6 million relating to the exit of non-core retail markets and $1.2 million in higher than anticipated employee related costs primarily in the exit of non-core retail markets.

For fiscal 2004, the fiscal 2001 restructure and other charges were increased by $14.4 million, including an $11.7 million increase to the restructure reserves and a $2.7 million increase in asset impairment charges. The reserve increase of $11.7 million was a result of changes in estimates on employee benefit related costs from previously exited food distribution facilities and changes in estimates on exited real estate in certain markets for food distribution properties.

Included in the asset impairment charges in fiscal 2001 of $89.7 million were $57.4 million of charges related to retail food properties and $32.3 million of charges related to food distribution properties. Writedowns for property, plant and equipment, goodwill and other intangibles, and other assets were $58.4 million, $21.8 million and $9.5 million, respectively, and were reflected in the “Restructure and other charges” line in the Consolidated Statements of Earnings for fiscal 2001. In fiscal 2003, the fiscal 2001 asset impairment charges for property, plant and equipment were decreased by $3.6 million primarily due to changes in estimates on exited real estate in certain markets and includes a decrease of $8.2 million in estimates related to certain food distribution properties offset by an increase of $4.6 million in estimates related to certain retail food properties. In fiscal 2004, the fiscal 2001 asset impairment charges for property, plant and equipment were increased by $2.7 million primarily due to changes in estimates on exited real estate in certain markets for food distribution properties. The impairment charges reflect the difference between the carrying value of the assets and the estimated fair values, which were based on the estimated market values for similar assets.

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All activity for the fiscal 2001 restructure plan has been completed. Remaining reserves represent future payments on exited real estate and employee benefit related costs from previously exited food distribution facilities. Details of the fiscal 2001 restructure activity for fiscal 2004 are as follows:

	Balance February 22, 2003		Fiscal 2004 Usage			Fiscal 2004 Adjustment			Balance February 28, 2004
	(In thousands)
Lease related costs:
Consolidation of distribution centers	$	6,473	$	(2,384	)	$	(33	)	$	4,056
Exit of non-core retail markets		8,844		(4,458	)		3,266			7,652
Disposal of non-core assets and other administrative reductions		4,299		(1,375	)		536			3,460
		19,616		(8,217	)		3,769			15,168
Employee related costs:
Consolidation of distribution centers		9,604		(5,996	)		7,421			11,029
Exit of non-core retail markets		2,980		(3,087	)		540			433
		12,584		(9,083	)		7,961			11,462
Total restructure and other charges	$	32,200	$	(17,300	)	$	11,730		$	26,630
	Previously Recorded					Fiscal 2004 Adjustment			Balance February 28, 2004
Impairment charges	$	86,169				$	2,737		$	88,906

The number of actual employees terminated under the fiscal 2001 restructure plan was adjusted to a lower number than originally expected primarily due to higher than anticipated voluntary attrition. There was no activity in fiscal 2004. Details of the fiscal 2001 restructure activity as it relates to the number of terminated employees are as follows:

	Original Estimate	Employees Terminated in Prior Years		Adjustments in Prior Years		Balance February 22, 2003
Employees	4,500	(3,767	)	(733	)	—

Restructure 2000

In fiscal 2000, the company recorded pre-tax restructure and other charges of $103.6 million as a result of an extensive review to reduce costs and enhance efficiencies. Included in this total was $17.4 million for asset impairment costs. The restructure and other charges include costs for facility consolidation, non-core store disposal, and rationalization of redundant and certain decentralized administrative functions. The original reserve amount was reduced by $10.3 million in fiscal 2001, primarily as a result of a change in estimate for the closure of a remaining facility. The reserve amount was subsequently increased $12.2 million in fiscal 2002, due to a change in estimate on a remaining facility primarily due to the softening real estate market.

In fiscal 2003, the fiscal 2000 restructure and other charges were decreased by $1.6 million, including a $2.9 million increase to the restructure reserves offset by a decrease in asset impairment charges of $4.5 million. The reserve increase of $2.9 million was a result of changes in estimates on exited real estate primarily due to the continued softening of real estate marketed for sale, sublease or assignment in certain markets and higher than anticipated employee related costs.

In fiscal 2004, the fiscal 2000 restructure and other charges were increased by $0.5 million as a result of changes in estimates on exited real estate due to the continued softening of real estate marketed for sale, sublease or assignment in certain markets.

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Included in the asset impairment charges in fiscal 2000 of $17.4 million were writedowns on food distribution assets of $10.6 million for property, plant and equipment, $5.6 million of goodwill and other intangibles, and $1.2 million for other assets that were reflected in the “Restructure and other charges” line in the Consolidated Statements of Earnings for fiscal 2000. In fiscal 2003, the fiscal 2000 asset impairment charges for property, plant and equipment on food distribution properties were decreased by $4.5 million primarily due to changes in estimates on exited real estate in certain markets. The impairment charges reflect the difference between the carrying value of the assets and the estimated fair values, which were based on the estimated market values for similar assets.

All activity for the fiscal 2000 restructure plan has been completed. Remaining reserves represent future payments on exited real estate. Details of the fiscal 2000 restructure activity for fiscal 2004 are as follows:

	Balance February 22, 2003		Fiscal 2004 Usage			Fiscal 2004 Adjustment		Balance February 28, 2004
	(In thousands)
Lease related costs:
Facility consolidation	$	8,083	$	(7,667	)	$	34	$	450
Non-core store disposal		3,042		(1,454	)		418		2,006
Total restructure and other charges	$	11,125	$	(9,121	)	$	452	$	2,456
	Previously Recorded					Fiscal 2004 Adjustment		February 28, 2004
Impairment charges	$	12,964				$	18	$	12,982

The number of actual employees terminated under the fiscal 2000 restructure plan was adjusted to a lower number than originally expected primarily due to higher than anticipated voluntary attrition. There was no activity in fiscal 2003 or fiscal 2004. Details of the fiscal 2000 restructure activity as it relates to the number of terminated employees are as follows:

	Original Estimate	Employees Terminated in Prior Years		Adjustments in Prior Years		Balance February 23, 2002
Employees	2,517	(1,693	)	(824	)	—

CRITICAL ACCOUNTING POLICIES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Significant accounting policies are discussed in the Summary of Significant Accounting Policies in the accompanying Notes to Consolidated Financial Statements. Management believes the following critical accounting policies reflect its more subjective or complex judgments and estimates used in the preparation of the company’s consolidated financial statements.

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LIFO and Retail Inventory Method

For a significant portion of the company’s inventory, cost is determined through use of the last-in, first-out (LIFO) method. The Company utilized LIFO to value approximately 68 percent and 71 percent of the company’s consolidated inventories for fiscal 2004 and 2003, respectively.

The retail inventory method (RIM) is used to value retail inventory. The valuation of inventories are at cost and the resulting gross margins are calculated by applying a calculated cost-to-retail ratio to the retail value of inventories. RIM is an averaging method that has been widely used in the retail industry due to its practicality. Inherent in the RIM calculations are certain significant management judgments and estimates, including shrinkage, which significantly impact the ending inventory valuation at cost, as well as the resulting gross margins. These judgments and estimates, coupled with the fact that the RIM is an averaging process, can, under certain circumstances, produce results which differ from actual. Management believes that the company’s RIM provides an inventory valuation which reasonably approximates cost and results in carrying inventory at the lower of cost or market.

Allowances for Losses on Receivables

Management makes estimates of the uncollectibility of its accounts and notes receivable portfolios. In determining the adequacy of the allowances, management analyzes the value of the collateral, customer financial statements, historical collection experience, aging of receivables and other economic and industry factors. Although risk management practices and methodologies are utilized to determine the adequacy of the allowance, it is possible that the accuracy of the estimation process could be materially impacted by different judgments as to collectibility based on the information considered and further deterioration of accounts.

Reserves for Closed Properties and Asset Impairment Charges

The company maintains reserves for estimated losses on retail stores, distribution warehouses and other properties that are no longer being utilized in current operations. The company provides for closed property lease liabilities using a discount rate to calculate the present value of the remaining noncancellable lease payments after the closing date, net of estimated subtenant income. The closed property lease liabilities usually are paid over the remaining lease terms, which generally range from one to 20 years. The company estimates subtenant income and future cash flows based on the company’s experience and knowledge of the market in which the closed property is located, the company’s previous efforts to dispose of similar assets and current economic conditions.

Owned properties that are closed are reduced to their estimated net realizable value. Costs to reduce the carrying values of property, equipment and leasehold improvements are accounted for in accordance with our policy on impairment of long-lived assets. Impairment charges on long-lived assets are recognized when expected net future cash flows are less than the assets’ carrying value. The company estimates net future cash flows based on its experience and knowledge of the market in which the closed property is located and, when necessary, utilizes local real estate brokers.

Adjustments to closed property reserves primarily relate to changes in subtenant income or actual exit costs differing from original estimates. Adjustments are made for changes in estimates in the period in which the changes become known. Closed property reserves are reviewed quarterly to ensure that any accrued amount that is not a sufficient estimate of future costs, or that no longer is needed for its originally intended purpose, is adjusted to income in the proper period.

The expectations on timing of disposition or sublease and the estimated sales price or sublease income associated with closed properties are impacted by variable factors such as inflation, the general health of the economy, resultant demand for commercial property, the ability to secure subleases, the creditworthiness of sublessees and the company’s success at negotiating early termination agreements with lessors. While management believes the current estimates on closed properties are adequate, it is possible that continued

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weakness in the real estate market could cause changes in the company’s assumptions and may require additional reserves and asset impairment charges to be recorded.

Reserves for Self Insurance

The company is primarily self-insured for workers’ compensation and general and automobile liability costs. It is the company’s policy to record its self-insurance liabilities based on claims filed and an estimate of claims incurred but not yet reported, discounted at a risk free interest rate. Any projection of losses concerning workers’ compensation and general and automobile liability is subject to a considerable degree of variability. Among the causes of this variability are unpredictable external factors affecting future inflation rates, discount rates, litigation trends, legal interpretations, benefit level changes and claim settlement patterns. A 100 basis point change in discount rates, based on changes in market rates would increase the company’s liability by approximately $1.1 million.

Retirement Plans

The company sponsors non-union pension and other post retirement plans in various forms covering substantially all employees who meet eligibility requirements. The determination of the company’s obligation and expense for non-union pension and other post retirement benefits is dependent, in part, on management’s selection of certain assumptions used by its actuaries in calculating these amounts. These assumptions include, among other things, the discount rate, the expected long-term rate of return on plan assets and the rates of increase in compensation and health care costs. In accordance with generally accepted accounting principles, actual results that differ from the company’s assumptions are accumulated and amortized over future periods and, therefore, affect its recognized expense and recorded obligation in such future periods. While the company believes that its assumptions are appropriate, significant differences in actual experience or significant changes in assumptions may materially impact pension and other post retirement obligations and future expenses.

The company lowered its expected return on plan assets used for fiscal 2004 pension expense by 25 basis points to 9.00 percent and by an additional 25 basis points to 8.75 percent for fiscal 2005 pension expense. The company also lowered its discount rate by 75 basis points to 6.25 percent for fiscal 2005 pension expense. For fiscal 2005, when not considering other changes in assumptions, the impact to pension expense of each 25 basis point reduction in the discount rate is to increase pension expense by approximately $3 million and the impact of each 25 basis point reduction in expected return on plan assets is to increase pension expense by approximately $1 million.

The assumed health care cost trend rate used in measuring the accumulated post retirement benefit obligation was 8.0 percent in fiscal 2004. The assumed health care cost trend rate will decrease by one percent each year for the next three years until it reaches the ultimate trend rate of 5.0 percent. The health care cost trend rate assumption has a significant impact on the amounts reported. A one percent increase in the trend rate would increase the accumulated post retirement benefit obligation by $7.0 million and the net periodic cost by $0.4 million in fiscal 2004. In contrast, a one percent decrease in the trend rate would decrease the accumulated post retirement benefit obligation by $6.6 million and the net periodic cost by $0.4 million in fiscal 2004. The weighted average discount rates used in determining the benefit obligation were 6.25% and 7.00% for fiscal 2004 and 2003, respectively.

The actuarial assumptions used by the company may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates, and longer or shorter life spans of participants.

Goodwill

Management assesses the valuation of goodwill for each of the company’s reporting units on an annual basis through the comparison of the fair value of the respective reporting unit with its carrying value. Fair value is

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determined primarily based on valuation studies performed by the company, which utilize a discounted cash flow methodology. Valuation analysis requires significant judgments and estimates to be made by management. The company’s estimates could be materially impacted by factors such as competitive forces, customer behaviors, changes in growth trends and specific industry conditions.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $832.2 million, $587.6 million, and $692.5 million in fiscal 2004, 2003 and 2002, respectively. The increase in cash from operating activities in fiscal 2004 from fiscal 2003 is primarily related to changes in assets and liabilities reflecting changes in working capital including timing differences for tax payments and increases in the minimum pension liability.

Net cash used in investing activities was $257.0 million, $334.7 million, and $224.7 million in fiscal 2004, 2003, and 2002, respectively. Fiscal 2004 investing activities primarily reflect capital spending to fund retail store expansion, store remodeling, extreme value distribution facilities and technology enhancements. Fiscal 2003 investing activities primarily reflect capital spending to fund retail store expansion, including the acquisition of Deals, store remodeling and technology enhancements.

Net cash used in financing activities was $312.5 million, $235.9 million, and $466.1 million in fiscal 2004, 2003 and 2002, respectively. Fiscal 2004 financing activities primarily reflect the early redemption of $100.0 million of the company’s 8.875% notes due in 2022 at the redemption price of 103.956% of the principal amount of the notes, the net reduction in notes payable of $80.0 million, the payment of dividends of $77.0 million and the purchase of treasury shares of $14.6 million. Fiscal 2003 financing activities primarily reflect the issuance of $300.0 million 10-year 7.50% Senior Notes, completed in May 2002, the early redemption of $173.0 million of the company’s 9.75% Senior Notes due in fiscal 2005 at the redemption price of 102.4375% of the principal amount of the Senior Notes, the retirement of a $300 million 7.80% notes that matured in November 2002, the payment of dividends of $75.6 million and the purchase of treasury shares of $42.2 million.

On April 1, 2004, the company completed the sale of its minority ownership interest in WinCo Foods, Inc., a privately-held regional grocery chain that operates stores in Idaho, Oregon, Nevada, Washington and California. The company received after-tax proceeds of approximately $150 million on the sale of WinCo. See Subsequent Events note on page F-36 of the accompanying Notes to Consolidated Financial Statements. The impact of this transaction to fiscal 2005 is estimated to reduce net earnings by approximately $0.10 per share, reflecting the elimination of WinCo’s non-cash equity earnings and increase net earnings by approximately $0.50 per share for the one-time after-tax gain on the sale.

Management expects that the company will continue to replenish operating assets with internally generated funds. There can be no assurance, however, that the company’s business will continue to generate cash flow at current levels. The company will continue to obtain short-term financing from its revolving credit agreement with various financial institutions, as well as through its accounts receivable securitization program. Long-term financing will be maintained through existing and new debt issuances. The company’s short-term and long-term financing abilities are believed to be adequate as a supplement to internally generated cash flows to fund its capital expenditures and acquisitions as opportunities arise. Maturities of debt issued will depend on management’s views with respect to the relative attractiveness of interest rates at the time of issuance and other debt maturities.

As of February 28, 2004, the company’s current portion of outstanding debt including obligations under capital leases was $305.9 million. The company had no outstanding borrowings under its unsecured $650.0 million revolving credit facility. Letters of credit outstanding under the credit facility were $120.1 million and the unused available credit under the facility was $529.9 million. The Company also had $25.6 million of outstanding letters of credit issued under separate agreements with financial institutions.

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On May 3, 2004, the company utilized after-tax WinCo proceeds and additional cash balances to voluntarily redeem $250 million of 7 5/8 percent Notes due September 15, 2004, in accordance with the note redemption provisions.

On September 13, 2003, the company acquired certain former Fleming Companies’ distribution operations in the Midwest pursuant to the Asset Exchange. This transaction had no material impact on liquidity or capital resources in fiscal 2004. This transaction is expected to contribute to fiscal 2005 earnings per share in the range of $0.07 to $0.10 on an approximately $200 million lower revenue stream.

In August 2003, the company renewed its annual accounts receivable securitization program, under which the company can borrow up to $200.0 million on a revolving basis, with borrowings secured by eligible accounts receivable. Outstanding borrowings under this program at February 28, 2004 and February 22, 2003, were $0 and $80.0 million, respectively, and are reflected as a component of “notes payable” in the accompanying Consolidated Balance Sheets. The average short-term interest rate was 1.32% for fiscal 2004.

In November 2001, the company sold zero-coupon convertible debentures having an aggregate principal amount at maturity of $811.0 million. The proceeds from the offering, net of approximately $5.0 million of expenses, were $208.0 million and were initially used to pay down notes payable and were later used to retire a portion of the $300.0 million in debt that matured in November 2002. The debentures mature in 30 years and are callable at the company’s option on or after October 1, 2006. Holders may require the company to purchase all or a portion of their debentures on October 1, 2003, October 1, 2006 or October 1, 2011 at a purchase price equal to the accreted value of the debentures, which includes accrued and unpaid cash interest. If the option is exercised, the company has the choice of paying the holder in cash, common stock or a combination of the two. The debentures will generally be convertible if the closing price of the company’s common stock on the New York Stock Exchange for twenty of the last thirty trading days of any fiscal quarter exceeds certain levels, at $36.58 per share for the quarter ending June 19, 2004, and rising to $113.29 per share at September 6, 2031. In the event of conversion, 9.6434 shares of the company’s common stock will be issued per $1,000 debenture. The debentures have an initial yield to maturity of 4.5%, which is being accreted over the life of the debentures using the effective interest method. The company may pay contingent cash interest for the six-month period commencing November 3, 2006, and for any six-month period thereafter if the average market price of the debentures for a five trading day measurement period preceding the applicable six-month period equals 120% or more of the sum of the issue price and accrued original issue discount for the debentures. The debentures are classified as long-term debt based on the company’s ability and intent to refinance the obligation with long-term debt if the company is required to repurchase the debentures.

The company is party to synthetic leasing programs for two of its major warehouses. The leases expire in September 2004 and April 2008. The lease that expires in September 2004 may be renewed with the lessor’s consent through September 2006, and has a purchase option of approximately $25 million. The lease that expires in April 2008 may be renewed with the lessor’s consent through April 2013, and has a purchase option of approximately $60 million.

During fiscal 2004, the company repurchased 0.6 million shares of common stock at an average cost of $23.80 per share as part of the 5.0 million share repurchase program authorized in fiscal 2003 for employee compensation-related programs. During fiscal 2003, the company repurchased 1.5 million shares of common stock at an average cost of $27.94 per share as part of the 5.0 million share repurchase program authorized in fiscal 2002.

SFAS No. 87, “Employers’ Accounting for Pension”, requires that a prepaid pension asset or minimum pension liability, based on the current market value of plan assets and the accumulated benefit obligation of the plan, be reflected. Based on both performance of the pension plan assets and plan assumption changes, the company recorded a net after-tax other comprehensive loss adjustment in the fourth quarter of fiscal 2004 of

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$26.4 million to reflect a minimum pension liability of $98.7 million after-tax as of February 28, 2004. This other comprehensive loss adjustment was a non-cash reduction of equity and did not impact earnings. This other comprehensive loss adjustment will be revised in future years depending upon market performance and interest rate levels.

The company’s capital budget for fiscal 2005, which includes capitalized leases, is projected at approximately $400.0 million to $425.0 million, compared with actual spending of $371.5 million in fiscal 2004. The capital budget for 2005 anticipates cash spending of $340.0 million to $365.0 million, in addition to $60.0 million for capital leases. Approximately $300.0 million of the fiscal 2005 budget has been identified for use in the company’s retail food business and includes approximately eight to 10 regional banner stores and approximately 110 to 140 new extreme value stores, including extreme value general merchandise combination stores and approximately 30 regional banner major store remodels. The balance of the fiscal 2005 capital budget relates to distribution maintenance capital and information technology related items. In addition, the company will continue to support store development and financing for the company’s independent retailers. Certain retailer financing activities may not require new cash outlays because they involve leases or guarantees. The capital budget does include amounts for projects which are subject to change and for which firm commitments have not been made.

Cash dividends declared during fiscal 2004, 2003, and 2002 totaled $0.5775, $0.5675 and $0.5575 per common share, respectively. The company’s dividend policy will continue to emphasize a high level of earnings retention for growth.

COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS

The company has guaranteed certain leases, fixture financing loans and other debt obligations of various retailers at February 28, 2004. These guarantees were generally made to support the business growth of affiliated retailers. The guarantees are generally for the entire term of the lease or other debt obligation with remaining terms that range from less than one year to twenty-two years, with a weighted average remaining term of approximately ten years. For each guarantee issued, if the affiliated retailer defaults on a payment, the company would be required to make payments under its guarantee. Generally, the guarantees are secured by indemnification agreements or personal guarantees of the affiliated retailer. At February 28, 2004, the maximum amount of undiscounted payments the company would be required to make in the event of default of all guarantees was $290.4 million and represented $180.3 million on a discounted basis. No amount has been accrued for the company’s obligation under its guaranty arrangements. In addition, the company has guaranteed a construction loan on a warehouse of $1.5 million at February 28, 2004 that the company will purchase upon completion. The company has evaluated its agreements that contain guarantees and indemnification clauses in accordance with the guidance of FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”. As of February 28, 2004, the company did not have any material guarantees that were issued or modified since December 31, 2002.

The company is party to synthetic leasing programs for two of its major warehouses. The leases expire in September 2004 and April 2008. The lease that expires in September 2004 may be renewed with the lessor’s consent through September 2006, and has a purchase option of approximately $25 million. The lease that expires in April 2008 has a purchase option of $60.0 million. At February 28, 2004, the estimated market value of the properties underlying these leases equaled or exceeded the purchase options. The company’s obligation under its guaranty arrangements related to these synthetic leases had a carrying balance of $2.8 million, which is a component of “other liabilities” in the accompanying Consolidated Balance Sheet at February 28, 2004.

The company had $145.7 million of outstanding letters of credit as of February 28, 2004, of which $120.1 million were issued under the credit facility and $25.6 million were issued under separate agreements with financial institutions. These letters of credit primarily support workers’ compensation, merchandise import programs and payment obligations. The company pays fees, which vary by instrument, of up to 1.125% on the outstanding balance of the letter credit.

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In July and August 2002, several class action lawsuits were filed against the company and certain of its officers and directors in the United States District Court for the District of Minnesota on behalf of purchasers of the company’s securities between July 11, 1999 and June 26, 2002. The lawsuits have been consolidated into a single action, in which it is alleged that the company and certain of its officers and directors violated Federal securities laws by issuing materially false and misleading statements relating to its financial performance. On April 29, 2004, the District Court for the District of Minnesota granted preliminary approval to a stipulation of settlement between the company and plaintiffs. A hearing for final approval of the settlement is scheduled for August 16, 2004. The settlement will have no material impact to the company’s consolidated statement of earnings or consolidated financial position.

The company is a party to various legal proceedings arising from the normal course of business activities, none of which, in management’s opinion, is expected to have a material adverse impact on the Company’s consolidated statement of earnings or consolidated financial position.

The following table represents the company’s significant contractual obligations and off-balance sheet arrangements at February 28, 2004.

	Amount of Commitment Expiration Per Period
	Total Amount Committed		Fiscal 2005		Fiscal 2006-2007		Fiscal 2008-2009		Thereafter
	(in thousands)
Contractual Obligations:
Debt	$	1,385,297	$	273,811	$	137,791	$	16,956	$	956,739
Capital and Direct Financing Leases		554,368		32,133		87,680		82,986		351,569
Construction Loan Commitments		44,734		44,734		—		—		—
Operating Leases		1,032,563		160,589		239,026		229,822		403,126
Purchase Obligations (1)		68,963		37,383		30,204		1,376		—
Total Contractual Obligations	$	3,085,925	$	548,650	$	494,701	$	331,140	$	1,711,434
Off-Balance Sheet Arrangements:
Retailer Loan and Lease Guarantees	$	290,359	$	50,087	$	68,132	$	46,692	$	125,448
Purchase Options on Synthetic Leases		85,000		25,000		—		60,000		—
Total Off-Balance Sheet Arrangements	$	375,359	$	75,087	$	68,132	$	106,692	$	125,448

(1) The company’s purchase obligations include various obligations that have annual purchase commitments of $1 million or greater. At the end of fiscal 2004, future purchase obligations of $69.0 million existed that primarily related to technology and advertising. In the ordinary course of business, the company enters into supply contracts to purchase products for resale. These supply contracts typically include either a volume commitment or a fixed expiration date; termination provisions; and other standard contractual considerations. These supply contracts are cancelable and therefore no amounts have been included above.

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COMMON STOCK PRICE

SUPERVALU’s common stock is listed on the New York Stock Exchange under the symbol SVU. At fiscal 2004 year end, there were 6,839 shareholders of record compared with 6,960 at the end of fiscal 2003.

	Common Stock Price Range								Dividends Per Share
	2004				2003				2004		2003
Fiscal	High		Low		High		Low
First Quarter	$	22.74	$	12.60	$	30.81	$	24.60	$	0.1425	$	0.1400
Second Quarter		24.99		20.80		28.94		19.18		0.1450		0.1425
Third Quarter		26.29		23.39		21.59		14.75		0.1450		0.1425
Fourth Quarter		29.95		25.20		18.12		14.01		0.1450		0.1425
Year		29.95		12.60		30.81		14.01		0.5775		0.5675

Dividend payment dates are on or about the 15th day of March, June, September and December, subject to the Board of Directors approval.

NEW ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 143, “Accounting for Asset Retirement Obligations”, which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The company adopted the provisions of SFAS No. 143 in the first quarter of fiscal 2004. The adoption of SFAS No. 143 did not have an impact on the company’s consolidated financial statements.

In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections”. SFAS No. 145 allows only those gains and losses on the extinguishment of debt that meet the criteria of extraordinary items to be treated as such in the financial statements. SFAS No. 145 also requires sale-leaseback accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. Certain provisions of SFAS No. 145 were effective for transactions occurring after May 15, 2002, while the remaining provisions were effective for the company in the second quarter of fiscal 2004. The adoption of SFAS No. 145 did not have an impact on the company’s consolidated financial statements.

In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments imbedded in other contracts and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. SFAS No. 149 was effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The adoption of SFAS No. 149 did not have an impact on the company’s consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity”. SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 was effective for financial instruments entered into or modified after May 31, 2003 and otherwise was effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS No. 150 did not have an impact on the company’s consolidated financial statements.

In December 2003, the FASB issued revisions to SFAS No. 132, “Employers’ Disclosures about Pensions and Other Postretirement Benefits”. These revisions require changes to existing disclosures as well as new disclosures related to pension and other postretirement benefit plans. The revisions to SFAS No. 132, except for those relating to expected future benefit payments, are effective for fiscal years ending after December 15, 2003

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and have been incorporated in the accompanying Notes to Consolidated Financial Statements. Additional disclosures about expected future benefit payments are required for fiscal years ending after June 15, 2004 and will be incorporated in the company’s fiscal 2005 consolidated financial statements.

In January 2004, the FASB issued SFAS No. 106-1, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003.” This statement permits a sponsor to make a one-time election to defer accounting for the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, or the Prescription Drug Act. The Prescription Drug Act, signed into law in December 2003, establishes a prescription drug benefit under Medicare (Medicare Part D) and a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. SFAS No. 106-1 does not provide specific guidance as to whether a sponsor should recognize the effects of the Prescription Drug Act in its financial statements. The Prescription Drug Act introduces two new features to Medicare that must be considered when measuring accumulated postretirement benefit costs. The new features include a subsidy to the plan sponsors that is based on 28% of an individual beneficiary’s annual prescription drug costs between $250 and $5,000 and an opportunity for a retiree to obtain a prescription drug benefit under Medicare. The Prescription Drug Act is not expected to reduce the company’s net postretirement benefit costs. The company has elected to defer adoption of SFAS No. 106-1 due to the lack of specific guidance. Therefore, the net postretirement benefit costs disclosed in the company’s financial statements do not reflect the impacts of the Prescription Drug Act on the plans. The deferral will continue to apply until specific authoritative accounting guidance for the federal subsidy is issued. Authoritative guidance on the accounting for the federal subsidy is pending and, when issued, could require information previously reported in the company’s financial statements to change. The company is currently investigating the impacts of SFAS 106-1’s initial recognition, measurement and disclosure provisions on its consolidated financial statements.

Emerging Issues Task Force (EITF) Issue No. 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables”, addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities. EITF Issue No. 00-21 establishes three principles: revenue arrangements with multiple deliverables should be divided into separate units of accounting; arrangement consideration should be allocated among the separate units of accounting based on their relative fair values; and revenue recognition criteria should be considered separately for separate units of accounting. EITF Issue No. 00-21 was effective for all revenue arrangements entered into in fiscal periods beginning after June 15, 2003. The adoption of EITF Issue No. 00-21 did not have an impact on the company’s consolidated financial statements.

EITF Issue No. 01-8, “Determining Whether an Arrangement Contains a Lease”, determines whether an arrangement conveying the right to use property, plant and equipment meets the definition of a lease within the scope of SFAS 13, “Accounting for Leases”. EITF Issue No. 01-8 was effective the first interim period beginning after May 28, 2003. The adoption of EITF Issue No. 01-8 did not have an impact on the company’s consolidated financial statements.

EITF Issue No. 03-1, “The Meaning of Other-Than Temporary Impairment and Its Application to Certain Investments”, addresses both qualitative and quantitative disclosures. These disclosures are required for marketable equity and debt securities accounted for under FASB Statements No. 115, “Accounting for Certain Investments in Debt and Equity Securities”. The disclosure requirements were effective for fiscal years ending after December 15, 2003. The adoption of EITF Issue No. 03-1 did not have an impact on the company’s consolidated financial statements.

EITF Issue No. 03-10, “Application of EITF 02-16, ‘Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor,’ by Resellers to Sales Incentives Offered to Consumers by Manufacturers”, requires that when specified criteria are met, a retailer accepting manufacturers’ coupons should reflect the value of the coupon as revenue and not as a reduction in cost of sales. EITF Issue No. 03-10 was effective for the first interim period beginning after November 25, 2003. The adoption of EITF Issue No. 03-10 did not have an impact on the company’s consolidated financial statements.

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In November 2002, the FASB issued FASB Interpretation No. (FIN) 45, “Guarantor’s Accounting and Disclosures Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”. FIN 45 requires that upon issuance of a guarantee, a guarantor must recognize a liability for the fair value of an obligation assumed under a guarantee. FIN 45 also requires statements about the obligations associated with guarantees issued. The recognition provisions of FIN 45 were effective for guarantees issued after December 31, 2002, while the disclosure requirements were effective for financial statements for periods ending after December 15, 2002. The adoption of FIN 45 did not have a material effect on the company’s consolidated financial statements.

In December 2003, the FASB issued FIN 46 (revised December 2003), “Consolidation of Variable Interest Entities” (FIN 46R), which addresses how a business should evaluate whether it has a controlling financial interest in an entity through means other than voting rights and accordingly should consolidate the entity. FIN 46R replaced FIN 46 which was issued in January 2003. FIN 46 or FIN 46R applied immediately to entities created after January 31, 2003 and no later than the end of the first reporting period that ended after December 15, 2003 to entities considered to be special-purpose entities (SPEs). FIN 46R is effective for all other entities no later than the end of the first interim or annual reporting period ending after March 15, 2004. The adoption of the provisions of FIN 46 or FIN 46R relative to SPEs and for entities created after January 31, 2003 did not have an impact on the company’s consolidated financial statements. Additionally, the company does not expect the other provisions of FIN 46R to have an impact on the company’s consolidated financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The company is exposed to market pricing risk consisting of interest rate risk related to debt obligations outstanding, its investment in notes receivable and, from time to time, derivatives employed to hedge interest rate changes on variable and fixed rate debt. The company does not use financial instruments or derivatives for any trading or other speculative purposes.

The company manages interest rate risk through the strategic use of fixed and variable rate debt and, to a limited extent, derivative financial instruments. Variable interest rate debt (commercial paper, bank loans, industrial revenue bonds and other variable interest rate debt) is utilized to help maintain liquidity and finance business operations. Long-term debt with fixed interest rates is used to assist in managing debt maturities and to diversify sources of debt capital.

The company makes long-term loans to certain retail customers (see Notes Receivable in the accompanying Notes to Consolidated Financial Statements for further information) and as such, carries notes receivable in the normal course of business. The notes generally bear fixed interest rates negotiated with each retail customer. The market value of the fixed rate notes is subject to change due to fluctuations in market interest rates. At February 28, 2004, the estimated fair value of notes receivable approximates the net carrying value.

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The table below provides information about the company’s financial instruments that are sensitive to changes in interest rates, including notes receivable, debt obligations and interest rate swap agreements. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates. For notes receivable, the table presents the expected collection of principal cash flows and weighted average interest rates by expected maturity dates. For interest rate swap agreements, the table presents the estimate of the differentials between interest payable and interest receivable under the swap agreements implied by the yield curve utilized to compute the fair value of the interest rate swaps.

	Summary of Financial Instruments
	February 28, 2004					Aggregate payments by fiscal year
	Fair Value		Total			2005			2006			2007			2008			2009			Thereafter
	(in millions, except rates)
Notes receivable
Principal receivable	$	86.5	$	86.5		$	25.5		$	15.7		$	14.3		$	15.0		$	3.9		$	12.1
Average Rate receivable				8.6	%		8.4	%		9.1	%		8.9	%		9.3	%		9.3	%		6.9	%
Debt with variable interest rates
Principal payable	$	61.1	$	61.1		$	1.7		$	2.6		$	2.8		$	1.2		$	7.0		$	45.8
Average variable rate payable				1.1	%		2.2	%		1.1	%		1.0	%		1.0	%		1.0	%		1.1	%
Debt with fixed interest rates
Principal payable	$	1,473.7	$	1,324.2		$	272.1		$	61.2		$	71.2		$	4.3		$	4.5		$	910.9
Average fixed rate payable				6.9	%		7.7	%		8.2	%		6.8	%		6.8	%		8.3	%		6.7	%
Fixed-to-variable interest rate swaps
Amount receivable	$	20.5	$	20.5		$	8.2		$	6.2		$	4.1		$	1.0		$	1.0
Average variable rate payable				3.7	%
Average fixed rate receivable				7.9	%

Cautionary Statements for Purposes of the Safe Harbor Provisions of the Securities Litigation Reform Act

Any statements contained in this report regarding the outlook for our businesses and their respective markets, such as projections of future performance, statements of our plans and objectives, forecasts of market trends and other matters, are forward-looking statements based on our assumptions and beliefs. Such statements may be identified by such words or phrases as “will likely result,” “are expected to,” “will continue,” “outlook,” “will benefit,” “is anticipated,” “estimate,” “project,” “management believes” or similar expressions. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those discussed in such statements and no assurance can be given that the results in any forward-looking statement will be achieved. For these statements, the company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to subsequently revise any forward-looking statement to reflect events or circumstances after such date or to reflect the occurrence of anticipated or unanticipated events.

The following is a summary of certain factors, the results of which could cause our future results to differ materially from those expressed or implied in any forward-looking statements contained in this report. These factors are in addition to any other cautionary statements, written or oral, which may be made or referred to in connection with any such forward-looking statement; however, they should not be construed as exhaustive.

Ÿ Economic Conditions.    The food industry is sensitive to a number of economic conditions such as: (i) food price deflation or inflation, (ii) softness in local and national economies, (iii) increases in

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commodity prices, (iv) the availability of favorable credit and trade terms, and (v) other economic conditions that may affect consumer buying habits. Any one or more of these economic conditions can affect our retail sales, the demand for products we distribute to our retailer customers, our operating costs and other aspects of our businesses.

Ÿ Competition.    The industries in which we compete are extremely competitive. Both our retail food and food distribution businesses are subject to competitive practices that may affect: (i) the prices at which we are able to sell products at our retail locations, (ii) sales volume, (iii) the ability of our distribution customers to sell products we supply, which may affect future orders, and (iv) our ability to attract and retain customers. In addition, the nature and extent of consolidation in the retail food and food distribution industries could affect our competitive position or that of our distribution customers in the markets we serve.

Our retail food business faces competition from other retail chains, supercenters, non-traditional competitors and emerging alterative formats in the markets where we have retail operations. In our food distributions business, our success depends in part on the ability of our independent retailer customers to compete with these same formats, our ability to attract new customers, and our ability to supply products in a cost effective manner. Declines in the level of retail sales activity of our distribution customers due to competition; consolidations of retailers or competitors; increased self-distribution by our customers; or the entry of new or non-traditional distribution systems into the industry may adversely affect our revenues.

Ÿ Labor Relations and Employee Benefit Costs.    Potential work disruptions from labor disputes may affect sales at our stores as well as our ability to distribute products. We contribute to various multi-employer healthcare and pension plans covering certain union represented employees in both our retail and distribution operations. Approximately one-third of the employees in our total workforce are participants in multi-employer plans. The costs of providing benefits through such plans have escalated rapidly in recent years. Based upon information available to us, we believe certain of these multi-employer plans are underfunded. The decline in the value of assets supporting these plans, in addition to the high level of benefits generally provided, has led to the underfunding. As a result, contributions to these plans will continue to increase and the benefit levels and related issues will continue to create collective bargaining challenges.

Ÿ Expansion and Acquisitions.    While we intend to continue to expand our retail and distribution businesses through new store openings, new affiliations and acquisitions, expansion is subject to a number of risks, including the adequacy of our capital resources, the location of suitable store or distribution center sites and the negotiation of acceptable purchase or lease terms; and the ability to hire and train employees. Acquisitions may involve a number of special risks, including: making acquisitions at acceptable rates of return, the diversion of management’s attention to the assimilation of the operations and integration of personnel of the acquired business, costs and other risks associated with integrating or adapting operating systems, and potential adverse effects on our operating results.

Ÿ Liquidity.    We expect to continue to replenish operating assets with internally generated funds. However, if our capital spending significantly exceeds anticipated capital needs, additional funding could be required from other sources including borrowing under our bank credit lines or through debt issuances. In addition, acquisitions could affect our borrowing costs and future financial flexibility.

Ÿ Domestic Security.    Wartime activities, threats, and acts of terror directed at the food industry as well as related security costs can affect consumer behavior and spending as well as customer orders.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information called for by Item 7A is found under the heading of “Quantitative and Qualitative Disclosure About Market Risk” under Part II, Item 7 above.

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ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information called for by Item 8 is found in a separate section of this report on pages F-1 through F-38. See “Index of Selected Financial Data and Financial Statements and Schedules” on page F-1.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.    CONTROLS AND PROCEDURES

The company carried out an evaluation, under the supervision and with the participation of the company’s management, including the company’s chief executive officer and its chief financial officer, of the effectiveness of the design and operation of the company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities and Exchange Act of 1934 (the “Exchange Act”)) as of February 28, 2004 the end of the period covered by this report. Based upon that evaluation, the chief executive officer and chief financial officer concluded that as of the Evaluation Date, the company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

During the fiscal quarter ended February 28, 2004, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information called for by Item 10, as to compliance with Section 16(a) of the Securities Exchange Act of 1934, is incorporated by reference to the Registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the Registrant’s 2004 Annual Meeting of Stockholders under the heading “Section 16(a) Beneficial Ownership Reporting Compliance.” The information called for by Item 10, as to the audit committee and the audit committee financial expert, is incorporated by reference to the Registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Committee pursuant to Regulation 14A in connection with the Registrant’s 2004 Annual Meeting of Stockholders under the headings “Meetings of the Board of Directors and Committees of the Board” and “Audit Committee.” Certain information regarding executive officers and directors of the Registrant is included in Part I immediately following Item 4 above.

The company has adopted a code of ethics that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, and all other company employees and non-employee directors. This code of ethics is posted on the company’s website (www.supervalu.com). The company intends to satisfy the disclosure requirement under Item 10 of Form 8-K regarding an amendment to, or waiver from, a provision of the code of ethics that applies to the company’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting such information on the company’s website, at the address specified above.

The company’s Corporate Governance Principles and charters for each Committee of its Board of Directors, are also available on the company’s website. The code of ethics, Corporate Governance Principles and charters are also available in print to any stockholder who submits a request to: SUPERVALU INC., P.O. Box 990, Minneapolis, Minnesota 55440.

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Information on the company’s website is not deemed to be incorporated by reference into this Annual Report on Form 10-K.

ITEM 11.    EXECUTIVE COMPENSATION

The information called for by Item 11 is incorporated by reference to the Registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the Registrant’s 2004 Annual Meeting of Stockholders under the headings “Compensation of Directors,” “Compensation of Executive Officers,” “Option Grants in Last Fiscal Year,” “Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values,” “Long-Term Incentive Plans—Awards in Last Fiscal Year,” “Pension Plans and Retirement Benefits,” “Change in Control Agreements” and “Related Party Transactions, Compensation Committee Interlocks and Insider Participation.”

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Some of the information called for by Item 12 is incorporated by reference to the Registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the Registrant’s 2004 Annual Meeting of Stockholders under the headings “Security Ownership of Certain Beneficial Owners” and “Security Ownership of Management.”

The following table sets forth information as of February 28, 2004 about the company’s common stock that may be issued under all of its equity compensation plans:

Equity Compensation Plan Information

	(a)	(b)	(c)
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders (1)	7,214,401	$20.10(3)	4,119,530(4)
Equity compensation plans not approved by security holders (2)(6)	5,103,652	$20.70	2,901,184(5)
Total	12,318,053	$20.35(3)	7,020,714(4)(5)

1) Includes the company’s 1989 Stock Appreciation Rights Plan, 1983 Employee Stock Option Plan, 1993 Stock Plan, 2002 Stock Plan, SUPERVALU/Richfood Stock Incentive Plan and 2002 Long-Term Incentive Plan.

2) Includes the company’s 1997 Stock Plan and Restricted Stock Plan.

3) Excludes 200,000 restricted stock units included in column (a) which do not have an exercise price. Such units vest and are payable in shares after the expiration of the time periods set forth in their restricted stock unit agreements.

4) In addition to grants of options, warrants or rights, includes the following shares available for issuance in the form of restricted stock, performance awards and other types of stock-based awards: 2002 Stock Plan, 3,379,309 shares; SUPERVALU/Richfood Stock Incentive Plan, 2,200 shares; and 2002 Long-Term Incentive Plan, 738,021 shares.

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5) Includes 2,827,684 shares under the 1997 Stock Option Plan available for issuance in the form of restricted stock, performance awards and other types of stock-based awards in addition to the granting of options, warrants or stock appreciation rights and 73,500 shares under the Restricted Stock Plan available for issuance as restricted stock.

6) Does not include outstanding options for 40,007 shares of common stock at a weighted average exercise price of $25.82 per share that were assumed in connection with the merger of Richfood Holdings, Inc. into the company effective August 31, 1999. No further awards will be made under this plan.

1997 Stock Plan.    The Board of Directors adopted the 1997 Stock Plan on April 9, 1997 to provide for the granting of non-qualified stock options, restoration options, stock appreciation rights, restricted stock, restricted stock units and performance awards to key employees of the company or any of its subsidiaries. A total of 10,800,000 shares are authorized and may be issued as awards under the plan. The Board amended this plan August 18, 1998, March 14, 2000, and April 10, 2002, and it will terminate on April 9, 2007.

All employees, consultants or independent contractors providing services to the company, other than officers or directors of the company or any of its affiliates who are subject to Section 16 of the Securities Exchange Act of 1934, are eligible to participate in the plan. The Board administers the plan and has discretion to set the terms of all awards made under the plan, except as otherwise expressly provided in the plan. Options granted under the plan may not have an exercise price less than 100 percent of the fair market value of the company’s common stock on the date of the grant. Stock appreciation rights may not be granted at a price less than 100 percent of the fair market value of the common stock on the date of the grant. Unless the Board otherwise specifies, restricted stock and restricted stock units will be forfeited and reacquired by the company if an employee is terminated. Performance awards granted under the plan may be payable in cash, shares, restricted stock, other securities, other awards under the plan or other property when the participant achieves performance goals set by the Board.

Restricted Stock Plan.    The Board of Directors adopted the Restricted Stock Plan on April 10, 1991 to provide for the granting of restricted stock to management employees of the company or any of its subsidiaries who are not subject to the provisions of Section 16 of the Securities Exchange Act of 1934 at the time of an award. The Board amended this plan on February 24, 2001 to increase the total shares available for issuance to 300,000. This plan has no expiration date. The chief executive officer administers this plan and may determine who is eligible to participate in the plan, the number of shares to be covered by each award and the terms and conditions of any award or agreement under the plan (including the forfeiture, transfer or other restrictions relating to such award).

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information called for by Item 13 is incorporated by reference to the Registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the Registrant’s 2004 Annual Meeting of Stockholders under the heading “Related Party Transactions, Compensation Committee Interlocks and Insider Participation.”

ITEM 14.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information called for by this Item 14 is incorporated by reference to the Registrant’s definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A in connection with the Registrant’s 2004 Annual Meeting of Stockholders under the heading “Independent Auditor’s Fees”.

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PART IV

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)(1) Financial Statements:

The consolidated financial statements of the Registrant listed in the accompanying “Index of Selected Financial Data and Financial Statements and Schedules” together with the report of KPMG LLP, independent auditors, are filed as part of this report.

(2) Financial Statement Schedules:

The consolidated financial statement schedules of the Registrant listed in the accompanying “Index of Selected Financial Data and Financial Statements and Schedules” together with the report of KPMG LLP, independent auditors, are filed as part of this report.

(3) Articles of Incorporation and Bylaws:

(3)(i) Restated Certificate of Incorporation

(3)(ii) Restated Bylaws, as amended, is incorporated by reference to Exhibit (3)(ii) to the Registrant’s Annual Report on Form 10-K for the year ended February 22, 2003.

(4) Instruments defining the rights of security holders, including indentures:

4.1. Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee, relating to certain outstanding debt securities of the Registrant, is incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-3, Registration No. 33-52422.

4.2. First Supplemental Indenture dated as of August 1, 1990, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee, is incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-3, Registration No. 33-52422.

4.3. Second Supplemental Indenture dated as of October 1, 1992, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee, is incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated November 13, 1992.

4.4. Third Supplemental Indenture dated as of September 1, 1995, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee, is incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated October 2, 1995.

4.5. Fourth Supplemental Indenture dated as of August 4, 1999, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee, is incorporated by reference to Exhibit 4.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (16 weeks) ended September 11, 1999.

4.6. Fifth Supplemental Indenture dated as of September 17, 1999, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee, is incorporated by reference to Exhibit 4.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (16 weeks) ended September 11, 1999.

4.7. Letter of Representations dated November 12, 1992, between the Registrant, Bankers Trust Company, as Trustee, and The Depository Trust Company relating to certain outstanding

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debt securities of the Registrant, is incorporated by reference to Exhibit 4.5 to the Registrant’s Report on Form 8-K dated November 13, 1992.

4.8. Rights Agreement dated as of April 12, 2000, between SUPERVALU INC. and Wells Fargo Bank Minnesota, N.A. (formerly Norwest Bank Minnesota, N.A.) as Rights Agent, including as Exhibit B the forms of Rights Certificate and Election to Exercise, is incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated April 17, 2000.

4.9. Indenture dated as of November 2, 2001, between SUPERVALU INC. and The Chase Manhattan Bank, as Trustee, including form of Liquid Yield Option^™ Note due 2031 (Zero Coupon—Senior), is incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-3, Registration No. 333-81252.

4.10. Registration Rights Agreement dated as of November 2, 2001, by and among SUPERVALU INC., Merrill Lynch & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, is incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-3, Registration No. 333-81252.

4.11. Form of Credit Agreement, dated as of April 23, 2002, among the Registrant, the Lenders named therein, JP Morgan Chase Bank, as Agent, and Bank One, NA, as Syndication Agent, is incorporated by reference to Exhibit 4.11 to the Registrant’s Current Report on Form 8-K dated April 23, 2002.

Pursuant to Item 601(b)(4)(iii) of Regulation S-K, copies of certain instruments defining the rights of holders of certain long-term debt of the Registrant and its subsidiaries are not filed and, in lieu thereof, the Registrant agrees to furnish copies thereof to the Securities and Exchange Commission upon request.

(10) Material Contracts:

10.1. SUPERVALU INC. 2002 Stock Plan is incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (16 weeks) ended June 15, 2002.*

10.2. SUPERVALU INC. 1997 Stock Plan, as amended, is incorporated by reference to Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K for the year ended February 22, 2003.*

10.3. SUPERVALU INC. 1993 Stock Plan, as amended, is incorporated by reference to Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K for the year ended February 27, 1999.*

10.4. SUPERVALU/Richfood Stock Incentive Plan, as amended, is incorporated by reference to Exhibit 10.23 to the Registrant’s Annual Report on Form 10-K for the year ended February 23, 2002.*

10.5. Resolutions of SUPERVALU INC. Board of Directors, amending the SUPERVALU INC. Restricted Stock Plan, as amended, are incorporated by reference to Exhibit 10.29 to the Registrant’s Annual Report on Form 10-K for the year ended February 24, 2001.*

10.6. SUPERVALU INC. 1983 Employee Stock Option Plan, as amended, is incorporated by reference to Exhibit (10)a. to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (12 weeks) ended September 12, 1998. *

10.7. SUPERVALU INC. 1989 Stock Appreciation Rights Plan is incorporated by reference to Exhibit (10)g. to the Registrant’s Annual Report on Form 10-K for the year ended February 25, 1989.*

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10.8. SUPERVALU INC. Executive Incentive Bonus Plan is incorporated by reference to Exhibit (10)c. to the Registrant’s Annual Report on Form 10-K for the year ended February 22, 1997.*

10.9. SUPERVALU INC. Annual Cash Bonus Plan for Designated Corporate Officers, as amended, is incorporated by reference to Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K for the year ended February 24, 2001.*

10.10. SUPERVALU INC. Long-Term Incentive Plan is incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (16 weeks) ended June 15, 2002.*

10.11. SUPERVALU INC. Deferred Compensation Plan for Non-Employee Directors, as amended, is incorporated by reference to Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K for the year ended February 22, 2003.*

10.12. SUPERVALU INC. Excess Benefit Plan Restatement, as amended, is incorporated by reference to Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K for the year ended February 22, 2003.*

10.13. SUPERVALU INC. Deferred Compensation Plan as amended, is incorporated by reference to Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K for the year ended February 22, 2003.*

10.14. SUPERVALU INC. Executive Deferred Compensation Plan, as amended, is incorporated by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K for the year ended February 22, 2003.*

10.15. SUPERVALU INC. Executive Deferred Compensation Plan II, as amended, is incorporated by reference to Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K for the year ended February 22, 2003.*

10.16. Form of Agreement used in connection with the Registrant’s Executive Post Retirement Survivor Benefit Program, is incorporated by reference to Exhibit (10)i. to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (12 weeks) ended September 12, 1998.*

10.17. Form of Change of Control Severance Agreements entered into with certain officers of the Registrant, is incorporated by reference to Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K for the year ended February 27, 1999. *

10.18. SUPERVALU INC. Directors Retirement Program, as amended, is incorporated by reference to Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K for the year ended February 22, 2003.*

10.19. SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan is incorporated by reference to Exhibit (10)r. to the Registrant’s Annual Report on Form 10-K for the year ended February 24, 1990.*

10.20. First Amendment to SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan is incorporated by reference to Exhibit (10)a. to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (12 weeks) ended September 7, 1996.*

10.21. Second Amendment to SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan is incorporated by reference to Exhibit (10)r. to the Registrant’s Annual Report on Form 10-K for the year ended February 28, 1998.*

10.22 Third Amendment to SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan is incorporated by reference to Exhibit (10)h. to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (12 weeks) ended September 12, 1998.*

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10.23. Fourth Amendment to SUPERVALU INC. Non-Qualified Supplement Executive Retirement Plan. is incorporated by reference to Exhibit 10.23 to the Registrant’s Annual Report on Form 10-K for the year ended February 22, 2003.*

10.24. SUPERVALU INC. Non-Employee Directors Deferred Stock Plan, as amended, is incorporated by reference to Exhibit 10.24 to the Registrant’s Annual Report on Form 10-K for the year ended February 22, 2003.*

10.25. Restricted Stock Unit Award Agreement for David L. Boehnen, as amended.*

10.26. Restricted Stock Unit Award Agreement for Pamela K. Knous, as amended.*

10.27. Restricted Stock Unit Award Agreement for John H. Hooley.*

10.28. Restricted Stock Unit Award Agreement for Michael L. Jackson.*

10.29. Restricted Stock Unit Award Agreement for Jeffrey Noddle, is incorporated by reference to Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K for the year ended February 22, 2003.*

10.30. Amended and Restated SUPERVALU INC. Grantor Trust dated as of May 1, 2002, is incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period (16 weeks) ended June 15, 2002.*

(12) Statement re Computation of Ratios.

12.1. Ratio of Earnings to Fixed Charges.

(21) Subsidiaries of the Registrant.

21.1. SUPERVALU INC. Subsidiaries.

(23) Consents of Experts and Counsel.

23.1. Consent of KPMG LLP.

(24) Power of Attorney.

24.1. Power of Attorney.

(31) Rule 13a-14(a)/15d-14(a) Certifications

31.1. Chief Executive Officer Certification of Periodic Financial Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2. Chief Financial Officer Certification of Periodic Financial Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

(32) Section 1350 Certifications

32.1. Chief Executive Officer Certification of Periodic Financial Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2. Chief Financial Officer Certification of Periodic Financial Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Indicates management contracts, compensatory plans or arrangements required to be filed pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K

(b) Reports on Form 8-K:

During the fourth quarter of the fiscal year ended February 28, 2004, the Registrant furnished a report on Form 8-K dated December 22, 2003, reporting under Item 12 “Results of Operations and Financial Condition” the results for its quarterly fiscal period ended November 29, 2003.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	SUPERVALU INC. (Registrant)
DATE: May 4, 2004	By:	/s/    JEFFREY NODDLE
		Jeffrey Noddle Chief Executive Officer and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/s/    JEFFREY NODDLE Jeffrey Noddle	Chairman of the Board; Chief Executive Officer; President; and Director (principal executive officer)	May 4, 2004
/s/    PAMELA K. KNOUS Pamela K. Knous	Executive Vice President, Chief Financial Officer (principal financial and accounting officer)	May 4, 2004
/s/    IRWIN COHEN* Irwin Cohen	Director
/s/    RONALD E. DALY* Ronald E. Daly	Director
/s/    LAWRENCE A. DEL SANTO* Lawrence A. Del Santo	Director
/s/    SUSAN E. ENGEL* Susan E. Engel	Director
/s/    EDWIN C. GAGE* Edwin C. Gage*	Director
/s/    GARNETT L. KEITH, JR.* Garnett L. Keith, Jr.	Director
/s/    RICHARD L. KNOWLTON* Richard L. Knowlton	Director
/s/    CHARLES M. LILLIS* Charles M. Lillis	Director
/s/    HARRIET PERLMUTTER* Harriet Perlmutter	Director
/s/    MARISSA PETERSON* Marissa Peterson	Director
/s/    STEVEN S. ROGERS* Steven S. Rogers*	Director

* Executed this 4th day of May, 2004, on behalf of the indicated Directors by John P. Breedlove, duly appointed Attorney-in-Fact.

By:	/s/    JOHN P. BREEDLOVE
	John P. Breedlove Attorney-in-Fact

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Exhibit 31.1

Certification Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

I, Jeffrey Noddle, certify that:

1. I have reviewed this annual report on Form 10-K of SUPERVALU INC. for the fiscal year ended February 28, 2004;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 4, 2004	/s/    JEFFREY NODDLE
		Chief Executive Officer and President

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Exhibit 31.2

Certification Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

I, Pamela K. Knous, certify that:

1. I have reviewed this annual report on Form 10-K of SUPERVALU INC. for the fiscal year ended February 28, 2004;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2004	/s/    PAMELA K. KNOUS
	Executive Vice President, Chief Financial Officer

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Exhibit 32.1

Certification Pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of SUPERVALU INC. (the “company”) certifies that the annual report on Form 10-K of the company for the fiscal year ended February 28, 2004, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in that Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the company for the period and as of the dates covered thereby.

A signed original of this written statement required by Section 906 has been provided to SUPERVALU INC. and will be retained by SUPERVALU INC. and furnished to the Securities and Exchange Commission or its staff upon request.

Dated:	May 4, 2004	/s/    JEFFREY NODDLE
		Jeffrey Noddle Chief Executive Officer and President

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Exhibit 32.2

Certification Pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of SUPERVALU INC. (the “company”) certifies that the annual report on Form 10-K of the company for the fiscal year ended February 28, 2004, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in that Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the company for the period and as of the dates covered thereby.

A signed original of this written statement required by Section 906 has been provided to SUPERVALU INC. and will be retained by SUPERVALU INC. and furnished to the Securities and Exchange Commission or its staff upon request.

Dated: May 4, 2004	/s/    PAMELA K. KNOUS
	Pamela K. Knous Executive Vice President, Chief Financial Officer

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SUPERVALU INC.

Annual Report on Form 10-K

Items 6, 8 and 15(a)

Index of Selected Financial Data and Financial Statements and Schedules

	Page(s)
Selected Financial Data:
Five Year Financial and Operating Summary	F-2–F-3
Financial Statements:
Independent Auditors’ Report	F-4
Consolidated composition of net sales and operating earnings for each of the three years ended February 28, 2004, February 22, 2003 and February 23, 2002	F-5
Consolidated statements of earnings for each of the three years ended February 28, 2004, February 22, 2003 and February 23, 2002	F-6
Consolidated balance sheets as of February 28, 2004 and February 22, 2003	F-7
Consolidated statements of stockholders’ equity for each of the three years ended February 28, 2004, February 22, 2003 and February 23, 2002	F-8
Consolidated statements of cash flows for each of the three years ended February 28, 2004, February 22, 2003 and February 23, 2002	F-9
Notes to consolidated financial statements	F-10–F-36
Unaudited quarterly financial information	F-37
Financial Schedule:
Schedule II: Valuation and qualifying accounts	F-38

All other schedules are omitted because they are not applicable or not required.

F-1

SUPERVALU INC. and Subsidiaries

FIVE YEAR FINANCIAL AND OPERATING SUMMARY

	2004			2003			2002			2001			2000(b)
Statement of Earnings Data (a)
Net sales	$	20,209,679		$	19,160,368		$	20,293,040		$	22,520,384		$	19,675,782
Cost of sales		17,372,429			16,567,397			17,704,197			19,976,436			17,450,060
Selling and administrative expenses		2,220,329			2,020,110			2,037,771			2,042,259			1,705,003
Gain on sale of Hazelwood Farms Bakeries		—			—			—			—			163,662
Restructure and other charges		15,523			2,918			46,300			171,264			103,596
Operating earnings		601,398			569,943			504,772			330,425			580,785
Interest, net		146,518			161,939			172,774			190,835			135,392
Earnings before taxes		454,880			408,004			331,998			139,590			445,393
Provision for income taxes		174,742			150,962			133,672			66,720			203,703
Net earnings		280,138			257,042			198,326			72,870			241,690
Net earnings per common share—diluted		2.07			1.91			1.48			0.55			1.86
Balance Sheet Data (a)
Inventories (FIFO) (c)	$	1,214,122		$	1,194,791		$	1,178,817		$	1,477,180		$	1,622,151
Working capital (c)		300,899			288,572			36,031			(125,408	)		(197,599	)
Net property, plant and equipment		2,134,436			2,220,850			2,208,633			2,232,794			2,168,210
Total assets		6,152,938			5,896,245			5,796,249			6,343,152			6,493,292
Long-term debt (d)		1,633,721			2,019,658			1,875,873			2,008,474			1,953,741
Stockholders’ equity		2,209,574			2,009,240			1,899,138			1,783,149			1,820,228
Other Statistics (a)
Net earnings as a percent of net sales		1.39	%		1.34	%		0.98	%		0.32	%		1.23	%
Return on average stockholders’ equity		13.29	%		12.97	%		10.70	%		3.96	%		14.80	%
Book value per common share	$	16.40		$	15.03		$	14.29		$	13.47		$	13.52
Current ratio (c)		1.16:1			1.19:1			1.02:1			0.95:1			0.92:1
Debt to capital ratio (e)		46.7	%		51.8	%		54.3	%		59.7	%		60.0	%
Dividends declared per common share	$	0.57¾		$	0.56¾		$	0.55¾		$	0.54¾		$	0.53¾
Weighted average common shares outstanding—diluted		135,418			134,877			133,978			132,829			130,090
Depreciation and amortization	$	301,589		$	297,056		$	340,750		$	343,779		$	277,062
Capital expenditures (f)	$	371,464		$	439,438		$	388,658		$	511,673		$	539,264
Net cash provided by operating activities	$	832,206		$	587,604		$	692,542		$	611,804		$	345,230
Net cash used in investing activities	$	(256,984	)	$	(334,717	)	$	(224,707	)	$	(357,179	)	$	(516,796	)
Net cash used in financing activities	$	(312,454	)	$	(235,870	)	$	(466,060	)	$	(255,149	)	$	(174,878	)

F-2

Notes:

(a) Fiscal 2004 includes 53 weeks, all other years include 52 weeks. Dollars in thousands except per share and percentage data.

(b) Fiscal 2000 net earnings include a net benefit of $10.9 million or $0.08 per diluted share from the gain on sale of Hazelwood Farms Bakeries and restructure charges. This reflects total pretax net adjustments of $60.1 million, which include a $163.7 million gain on sale of Hazelwood Farms Bakeries and $103.6 million of restructure charges related primarily to facility consolidation, non core store disposal, and rationalization of redundant and certain decentralized administrative functions.

(c) Inventories (FIFO), working capital and current ratio are calculated after adding back the LIFO reserve. The LIFO reserve for each year is as follows: $135.8 million for fiscal 2004, $145.5 million for fiscal 2003, $140.8 million for fiscal 2002, $140.6 million for fiscal 2001 and $135.6 million for fiscal 2000.

(d) Long-term debt includes long-term debt and long-term obligations under capital leases.

(e) The debt to capital ratio is calculated as debt, which includes notes payable, current debt, current obligations under capital leases, long-term debt and long-term obligations under capital leases, divided by the sum of debt and stockholders’ equity.

(f) Capital expenditures includes cash expenditures and capital lease asset additions.

F-3

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Stockholders

SUPERVALU INC.:

We have audited the accompanying consolidated balance sheets of SUPERVALU INC. and subsidiaries (the Company) as of February 28, 2004 and February 22, 2003, and the related consolidated statements of earnings, stockholders’ equity and cash flows for each of the fiscal years in the three-year period ended February 28, 2004. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule as listed in the accompanying index. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of SUPERVALU INC. and subsidiaries as of February 28, 2004 and February 22, 2003, and the results of their operations and their cash flows for each of the fiscal years in the three-year period ended February 28, 2004, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in the note entitled “Summary of Significant Accounting Policies” to the consolidated financial statements, the Company adopted the provisions of Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” on February 24, 2002.

/s/    KPMG LLP

Minneapolis, Minnesota

April 14, 2004 (except as to the second

paragraph of the note to the consolidated

financial statements entitled “Subsequent

Events,” which is as of May 3, 2004)

F-4

SUPERVALU INC. and Subsidiaries

CONSOLIDATED COMPOSITION OF NET SALES AND OPERATING EARNINGS

(In thousands, except percent data)

	February 28, 2004 (53 weeks)			February 22, 2003 (52 weeks)			February 23, 2002 (52 weeks)
Net sales
Retail food	$	10,551,235		$	9,848,230		$	9,549,068
		52.2	%		51.4	%		47.1	%
Food distribution		9,658,444			9,312,138			10,743,972
		47.8	%		48.6	%		52.9	%
Total net sales	$	20,209,679		$	19,160,368		$	20,293,040
		100.0	%		100.0	%		100.0	%
Operating earnings
Retail food operating earnings	$	443,968		$	436,537		$	363,304
Food distribution operating earnings		222,462			171,589			227,013
General corporate expenses		(49,509	)		(35,265	)		(39,245	)
Restructure and other charges		(15,523	)		(2,918	)		(46,300	)
Total operating earnings		601,398			569,943			504,772
Interest expense, net		(146,518	)		(161,939	)		(172,774	)
Earnings before income taxes	$	454,880		$	408,004		$	331,998
Identifiable assets
Retail food	$	3,445,491		$	3,352,164		$	3,098,577
Food distribution		2,434,485			2,527,858			2,683,486
Corporate		272,962			16,223			14,186
Total	$	6,152,938		$	5,896,245		$	5,796,249
Depreciation and amortization
Retail food	$	193,450		$	178,447		$	187,254
Food distribution		106,239			115,738			151,049
Corporate		1,900			2,871			2,447
Total	$	301,589		$	297,056		$	340,750
Capital expenditures
Retail food	$	304,774		$	357,342		$	310,738
Food distribution		65,878			80,916			74,860
Corporate		812			1,180			3,060
Total	$	371,464		$	439,438		$	388,658

The company’s business is classified by management into two reportable segments: Retail food and Food distribution. Retail food operations include three retail formats: extreme value stores, regional price superstores and regional supermarkets. The retail formats include results of food stores owned and results of sales to extreme value stores licensed by the company. Food distribution operations include results of sales to affiliated food stores, mass merchants and other customers, and other logistics arrangements. Management utilizes more than one measurement and multiple views of data to assess segment performance and to allocate resources to the segments. However, the dominant measurements are consistent with the consolidated financial statements.

F-5

SUPERVALU INC. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

	February 28, 2004 (53 weeks)		February 22, 2003 (52 weeks)		February 23, 2002 (52 weeks)
Net sales	$	20,209,679	$	19,160,368	$	20,293,040
Costs and expenses
Cost of sales		17,372,429		16,567,397		17,704,197
Selling and administrative expenses		2,220,329		2,020,110		2,037,771
Restructure and other charges		15,523		2,918		46,300
Operating earnings		601,398		569,943		504,772
Interest
Interest expense		165,581		182,499		194,294
Interest income		19,063		20,560		21,520
Interest expense, net		146,518		161,939		172,774
Earnings before income taxes		454,880		408,004		331,998
Provision for income taxes
Current		123,026		89,754		57,312
Deferred		51,716		61,208		76,360
Income tax expense		174,742		150,962		133,672
Net earnings	$	280,138	$	257,042	$	198,326
Weighted average number of common shares outstanding
Diluted		135,418		134,877		133,978
Basic		133,975		133,730		132,940
Net earnings per common share—diluted	$	2.07	$	1.91	$	1.48
Net earnings per common share—basic	$	2.09	$	1.92	$	1.49

See notes to consolidated financial statements.

F-6

SUPERVALU INC. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

	February 28, 2004			February 22, 2003
ASSETS
Current Assets
Cash and cash equivalents	$	291,956		$	29,188
Receivables, less allowance for losses of $18,531 in 2004 and $21,913 in 2003 ($0 in 2004 and $264,392 in 2003 pledged as collateral)		447,872			477,429
Inventories		1,078,343			1,049,283
Other current assets		218,921			91,466
Total current assets		2,037,092			1,647,366
Long-term notes receivable, less allowance for losses of $15,913 in 2004 and $13,948 in 2003		61,041			71,917
Long-term investment in direct financing leases		68,688			54,518
Property, plant and equipment
Land		143,037			167,065
Buildings		1,103,569			1,113,370
Property under construction		6,200			26,407
Leasehold improvements		365,858			334,339
Equipment		1,651,385			1,672,448
Assets under capital leases		563,412			575,262
		3,833,461			3,888,891
Less accumulated depreciation and amortization
Owned property, plant and equipment		1,546,201			1,525,126
Assets under capital leases		152,824			142,915
Net property, plant and equipment		2,134,436			2,220,850
Goodwill		1,557,057			1,576,584
Other assets		294,624			325,010
Total assets	$	6,152,938		$	5,896,245
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Notes payable	$	—		$	80,000
Accounts payable		1,118,114			1,081,734
Accrued vacation, compensation and benefits		248,769			182,234
Current maturities of long-term debt		273,811			31,124
Current obligations under capital leases		32,133			30,456
Income taxes currently payable		106,577			23,796
Other current liabilities		92,568			74,958
Total current liabilities		1,871,972			1,504,302
Long-term debt		1,111,486			1,474,929
Long-term obligations under capital leases		522,235			544,729
Deferred income taxes		143,072			116,982
Other liabilities		294,599			246,063
Commitments and contingencies
Stockholders’ equity
Common stock, $1.00 par value: Authorized 200,000 shares
Shares issued, 150,670 in 2004 and 2003		150,670			150,670
Capital in excess of par value		102,352			114,028
Accumulated other comprehensive losses		(98,732	)		(79,063	)
Retained earnings		2,353,575			2,150,932
Treasury stock, at cost, 15,910 shares in 2004 and 16,982 shares in 2003		(298,291	)		(327,327	)
Total stockholders’ equity		2,209,574			2,009,240
Total liabilities and stockholders’ equity	$	6,152,938		$	5,896,245

See notes to consolidated financial statements.

F-7

SUPERVALU INC. and Subsidiaries

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except per share data)

	Common Stock			Capital in Excess of Par Value			Treasury Stock					Accumulated Other Comprehensive Losses			Retained Earnings			Total
	Shares	Amount					Shares		Amount
BALANCES AT FEBRUARY 24, 2001	150,670	$	150,670	$	128,492		(18,296	)	$	(342,100	)	$	—		$	1,846,087		$	1,783,149
Comprehensive income:
Net earnings	—		—		—		—			—			—			198,326			198,326
Derivative financial instrument-unrealized loss, net of deferred taxes of $5.0 million	—		—		—		—			—			(7,075	)		—			(7,075	)
Total comprehensive income																			191,251
Sales of common stock under option plans	—		—		(2,103	)	1,401			28,005			—			—			25,902
Cash dividends declared on common stock $0.5575 per share	—		—		—		—			—			—			(74,429	)		(74,429	)
Compensation under employee incentive plans	—		—		(4,945	)	576			10,293			—			—			5,348
Purchase of shares for treasury	—		—		—		(1,462	)		(32,083	)		—			—			(32,083	)
BALANCES AT FEBRUARY 23, 2002	150,670		150,670		121,444		(17,781	)		(335,885	)		(7,075	)		1,969,984			1,899,138
Comprehensive income:
Net earnings	—		—		—		—			—			—			257,042			257,042
Amortization of loss on derivative financial instrument, net of deferred taxes of $0.2 million	—		—		—		—			—			340			—			340
Minimum pension liability, net of deferred taxes of $47.1 million	—		—		—		—			—			(72,328	)		—			(72,328	)
Total comprehensive income																			185,054
Sales of common stock under option plans	—		—		(9,196	)	2,155			47,618			—			—			38,422
Cash dividends declared on common stock $0.5675 per share	—		—		—		—			—			—			(76,094	)		(76,094	)
Compensation under employee incentive plans	—		—		1,780		152			3,099			—			—			4,879
Purchase of shares for treasury	—		—		—		(1,508	)		(42,159	)		—			—			(42,159	)
BALANCES AT FEBRUARY 22, 2003	150,670		150,670		114,028		(16,982	)		(327,327	)		(79,063	)		2,150,932			2,009,240
Comprehensive income:
Net earnings	—		—		—		—			—			—			280,138			280,138
Amortization of loss on derivative financial instrument (including impact of debt redemption), net of deferred taxes of $4.2 million	—		—		—		—			—			6,735			—			6,735
Minimum pension liability, net of deferred taxes of $17.1 million	—		—		—		—			—			(26,404	)		—			(26,404	)
Total comprehensive income																			260,469
Sales of common stock under option plans	—		—		(11,047	)	1,596			41,508			—			—			30,461
Cash dividends declared on common stock $0.5775 per share	—		—		—		—			—			—			(77,495	)		(77,495	)
Compensation under employee incentive plans	—		—		(629	)	93			2,127			—			—			1,498
Purchase of shares for treasury	—		—		—		(617	)		(14,599	)		—			—			(14,599	)
BALANCES AT FEBRUARY 28, 2004	150,670	$	150,670	$	102,352		(15,910	)	$	(298,291	)	$	(98,732	)	$	2,353,575		$	2,209,574

See notes to consolidated financial statements.

F-8

SUPERVALU INC. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	February 28, 2004 (53 weeks)			February 22, 2003 (52 weeks)			February 23, 2002 (52 weeks)
Cash flows from operating activities
Net earnings	$	280,138		$	257,042		$	198,326
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		301,589			297,056			340,750
LIFO expense		4,734			4,741			143
Provision for losses on receivables		10,479			15,719			19,898
(Gain) loss on sale of property, plant and equipment		(1,802	)		(5,564	)		4,649
Restructure and other charges		15,523			2,918			46,300
Deferred income taxes		38,761			14,184			76,360
Equity in earnings of unconsolidated subsidiaries		(39,215	)		(39,724	)		(29,156	)
Other adjustments, net		4,339			3,675			(1,228	)
Changes in assets and liabilities
Receivables		23,407			(46,890	)		120,613
Inventories		(19,331	)		(15,974	)		298,150
Accounts payable		7,322			111,811			(386,504	)
Income taxes currently payable		82,781			22,707			(7,146	)
Other assets and liabilities		123,481			(34,097	)		11,387
Net cash provided by operating activities		832,206			587,604			692,542
Cash flows from investing activities
Additions to long-term notes receivable		(17,955	)		(61,963	)		(37,372	)
Proceeds received on long-term notes receivable		32,575			57,869			47,794
Proceeds from sale of assets		56,552			65,986			57,798
Purchases of property, plant and equipment		(328,156	)		(396,609	)		(292,927	)
Net cash used in investing activities		(256,984	)		(334,717	)		(224,707	)
Cash flows from financing activities
Net (reduction) issuance of notes payable		(80,000	)		56,000			(551,574	)
Proceeds from issuance of long-term debt		—			296,535			218,014
Repayment of long-term debt		(131,063	)		(472,448	)		(19,863	)
Reduction of obligations under capital leases		(32,884	)		(29,767	)		(25,988	)
Dividends paid		(77,035	)		(75,648	)		(74,024	)
Net proceeds from the sale of common stock under option plans		23,127			31,617			19,458
Payment for purchase of treasury shares		(14,599	)		(42,159	)		(32,083	)
Net cash used in financing activities		(312,454	)		(235,870	)		(466,060	)
Net increase in cash and cash equivalents		262,768			17,017			1,775
Cash and cash equivalents at beginning of year		29,188			12,171			10,396
Cash and cash equivalents at end of year	$	291,956		$	29,188		$	12,171

SUPPLEMENTAL CASH FLOW INFORMATION

The company’s non-cash activities were as follows:

Leased asset additions and related obligations	$	43,308	$	42,829	$	95,731
Minimum pension liability, net of deferred taxes of $17.1 million and $47.1 million in 2004 and 2003	$	26,404	$	72,328	$	—
Interest and income taxes paid:
Interest paid (net of amount capitalized)	$	143,088	$	171,089	$	184,719
Income taxes paid (net of refunds)	$	29,081	$	48,787	$	60,611

See notes to consolidated financial statements.

F-9

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation:

The consolidated financial statements include the accounts of the company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. References to the company refers to SUPERVALU INC. and Subsidiaries.

Fiscal Year:

The company’s fiscal year ends on the last Saturday in February. The company’s first quarter consists of 16 weeks, while the second, third and fourth quarters each consist of 12 weeks, except for the fourth quarter of fiscal 2004 which includes 13 weeks. The last three fiscal years consist of the 53-week period ending February 28, 2004 and the 52-week periods ending February 22, 2003 and February 23, 2002, respectively.

Revenue and Income Recognition:

Revenues and income from product sales are recognized at the point of sale for retail food and upon shipment of the product for food distribution. Revenues and income from services rendered are recognized immediately after such services have been provided.

Cost of Sales:

Cost of sales includes cost of inventory sold during the period, including purchasing and distribution costs and shipping and handling fees.

The company receives allowances and credits from suppliers for volume incentives, promotional allowances and, to a lesser extent, new product introductions which are typically based on contractual arrangements covering a period of one year or less. Volume incentives and promotional allowances earned based on quantities purchased and new product allowances are recognized as a reduction to the cost of purchased inventory and recognized when the related inventory is sold. Promotional allowances that are based on the sell-through of products are recognized as a reduction of cost of sales when the products are sold for which the promotional allowances are given.

Advertising expenses are also included as a component of cost of sales and are expensed as incurred. Advertising expenses were $83.4 million, $83.9 million and $86.7 million for fiscal 2004, 2003 and 2002 respectively.

Cash and Cash Equivalents:

The company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

Allowances for Losses on Receivables:

Management makes estimates of the uncollectibility of its accounts and notes receivable portfolios. In determining the adequacy of its allowances, management analyzes the value of the collateral, customer financial statements, historical collection experience, aging of receivables and other economic and industry factors. Although risk management practices and methodologies are utilized to determine the adequacy of the allowance, it is possible that the accuracy of the estimation process could be materially impacted by different judgments as to collectibility based on the information considered and further deterioration of accounts.

F-10

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Reserves for Closed Properties and Asset Impairment Charges

The company maintains reserves for estimated losses on retail stores, distribution warehouses and other properties that are no longer being utilized in current operations. The company provides for closed property lease liabilities using a discount rate to calculate the present value of the remaining noncancellable lease payments after the closing date, net of estimated subtenant income. The closed property lease liabilities usually are paid over the remaining lease terms, which generally range from one to 20 years. The company estimates subtenant income and future cash flows based on the company’s experience and knowledge of the market in which the closed property is located, the company’s previous efforts to dispose of similar assets and current economic conditions.

Owned properties that are closed are reduced to their estimated net realizable value. Costs to reduce the carrying values of property, equipment and leasehold improvements are accounted for in accordance with the company’s policy on impairment of long-lived assets. Impairment charges on long-lived assets are recognized when expected net future cash flows are less than the assets’ carrying value. The company estimates net future cash flows based on its experience and knowledge of the market in which the closed property is located and, when necessary, utilizes local real estate brokers.

Adjustments to closed property reserves primarily relate to changes in subtenant income or actual exit costs differing from original estimates. Adjustments are made for changes in estimates in the period in which the changes become known. Closed property reserves are reviewed quarterly to ensure that any accrued amount that is not a sufficient estimate of future costs, or that no longer is needed for its originally intended purpose, is adjusted to income in the proper period.

The expectations on timing of disposition or sublease and the estimated sales price or sublease income associated with closed properties are impacted by variable factors such as inflation, the general health of the economy, resultant demand for commercial property, the ability to secure subleases, the creditworthiness of sublessees and the company’s success at negotiating early termination agreements with lessors. While management believes the current estimates on closed properties are adequate, it is possible that continued weakness in the real estate market could cause changes in the company’s assumptions and may require additional reserves and asset impairment charges to be recorded.

LIFO and Retail Inventory Method:

Inventories are stated at the lower of cost or market. Market is replacement value.

For a significant portion of the company’s inventory, cost is determined through use of the last-in, first-out (LIFO) method. The company utilized LIFO to value approximately 68 percent and 71 percent of the company’s consolidated inventories for fiscal 2004 and 2003, respectively. The first-in, first-out method (FIFO) is used to determine cost for some of the remaining highly consumable inventories. If the FIFO method had been used to determine cost of inventories for which the LIFO method is used, the company’s inventories would have been higher by approximately $135.8 million at February 28, 2004 and $145.5 million at February 22, 2003.

The retail inventory method (RIM) is used to value retail inventory. The valuation of inventories are at cost and the resulting gross margins are calculated by applying a calculated cost-to-retail ratio to the retail value of inventories. RIM is an averaging method that has been widely used in the retail industry due to its practicality.

Reserves for Self Insurance:

The company is primarily self-insured for workers’ compensation and general and automobile liability costs. It is the company’s policy to record its self insurance liabilities based on claims filed and an estimate of claims incurred but not yet reported, discounted at a risk free interest rate. Any projection of losses concerning

F-11

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

workers’ compensation and general and automobile liability is subject to a considerable degree of variability. Among the causes of this variability are unpredictable external factors affecting future inflation rates, discount rates, litigation trends, legal interpretations, benefit level changes and claim settlement patterns.

Property, Plant and Equipment:

Property, plant and equipment are carried at cost. Depreciation, as well as amortization of assets under capital leases, are based on the estimated useful lives of the assets using the straight-line method. Estimated useful lives generally are 10 to 40 years for buildings and major improvements, 3 to 10 years for equipment, and the shorter of the term of the lease or expected life for leasehold improvements. Interest on property under construction of $0.4 million, $5.9 million and $5.7 million was capitalized in fiscal years 2004, 2003 and 2002, respectively.

Goodwill and Other Intangible Assets:

Goodwill represents the excess of costs over fair value of assets of businesses acquired. The company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets”, as of February 24, 2002. Pursuant to SFAS No. 142, goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but instead are tested for impairment at least annually in accordance with the provisions of SFAS No. 142. SFAS No. 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and be reviewed for impairment in accordance with SFAS No. 144, “Accounting for Impairment or Disposal of Long-Lived Assets”.

Retirement Plans:

The company sponsors pension and other retirement plans in various forms covering substantially all employees who meet eligibility requirements. The determination of the company’s obligation and expense for pension and other post retirement benefits is dependent, in part, on management’s selection of certain assumptions used by actuaries in calculating such amounts. These assumptions are described in the Retirement Plans note in the Notes to Consolidated Financial Statements and include, among other things, the discount rate, the expected long-term rate of return on plan assets, and the rates of increases in compensation and healthcare costs.

Financial Instruments:

The company accounts for derivative financial instruments pursuant to SFAS No. 133, “Accounting for Derivatives and Hedging Activities”, and SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activity, an Amendment of SFAS No. 133”. SFAS No. 133 and No. 138 require that all derivative financial instruments are recorded on the balance sheet at their respective fair value.

The company has only limited involvement with derivative financial instruments and uses them only to manage well-defined interest rate risks. The derivatives used have included interest rate caps, collars and swap agreements. The company does not use financial instruments or derivatives for any trading or other speculative purposes.

Stock-based Compensation:

The company has stock based employee compensation plans, which are described more fully in the Stock Option Plans note in the Notes to Consolidated Financial Statements. The company utilizes the intrinsic value-based method, per Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to

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SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Employees,” for measuring the cost of compensation paid in company common stock. This method defines the company’s cost as the excess of the stock’s market value at the time of the grant over the amount that the employee is required to pay. In accordance with APB Opinion No. 25, no compensation expense was recognized for options issued under the stock option plans in fiscal 2004, 2003 or 2002 as the exercise price of all options granted was not less than 100 percent of fair market value of the common stock on the date of grant.

The following table illustrates the effect on net earnings and net earnings per share if the company had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” as amended by SFAS No. 148, “Accounting for Stock-Based Compensation,” to stock-based employee compensation:

	2004			2003			2002
	(In thousands, except per share data)
Net earnings, as reported	$	280,138		$	257,042		$	198,326
Deduct: total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effect		(10,258	)		(9,528	)		(5,501	)
Pro forma net earnings	$	269,880		$	247,514		$	192,825
Earnings per share—basic:
As reported	$	2.09		$	1.92		$	1.49
Pro forma	$	2.01		$	1.85		$	1.45
Earnings per share—diluted:
As reported	$	2.07		$	1.91		$	1.48
Pro forma	$	1.99		$	1.84		$	1.44

For more information on the method and assumptions used in determining the fair value of stock-based compensation, see the Stock Option Plans note in the Notes to Consolidated Financial Statements.

Income Taxes:

The company provides for deferred income taxes during the year in accordance with SFAS No. 109, “Accounting for Income Taxes”. Deferred income taxes represent future net tax effects resulting from temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to be settled or realized. The major temporary differences and their net effect are shown in the Income Taxes note in the Notes to Consolidated Financial Statements.

Net Earnings Per Share (EPS):

EPS is calculated using income available to common shareholders divided by the weighted average number of common shares outstanding during the year. Diluted EPS is similar to basic EPS except that the weighted average number of common shares outstanding is after giving affect to dilutive stock options.

Comprehensive Income:

The company reports comprehensive income in accordance with SFAS No. 130, “Reporting Comprehensive Income”. Comprehensive income refers to revenues, expenses, gains and losses that are not included in net earnings but rather are recorded directly in the Consolidated Statements of Stockholders’ Equity.

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SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Use of Estimates:

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications:

Certain reclassifications have been made to conform prior years’ data to the current presentation. These reclassifications had no effect on reported earnings.

New Accounting Standards

In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 143, “Accounting for Asset Retirement Obligations”, which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The company adopted the provisions of SFAS No. 143 in the first quarter of fiscal 2004. The adoption of SFAS No. 143 did not have an impact on the company’s consolidated financial statements.

In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections”. SFAS No. 145 allows only those gains and losses on the extinguishment of debt that meet the criteria of extraordinary items to be treated as such in the financial statements. SFAS No. 145 also requires sale-leaseback accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. Certain provisions of SFAS No. 145 were effective for transactions occurring after May 15, 2002, while the remaining provisions were effective for the company in the second quarter of fiscal 2004. The adoption of SFAS No. 145 did not have an impact on the company’s consolidated financial statements.

In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments imbedded in other contracts and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. SFAS No. 149 was effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. The adoption of SFAS No. 149 did not have an impact on the company’s consolidated financial statements.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity”. SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 was effective for financial instruments entered into or modified after May 31, 2003 and otherwise was effective at the beginning of the first interim period beginning after June 15, 2003. The adoption of SFAS No. 150 did not have an impact on the company’s consolidated financial statements.

In December 2003, the FASB issued revisions to SFAS No. 132, “Employers’ Disclosures about Pensions and Other Postretirement Benefits”. These revisions require changes to existing disclosures as well as new disclosures related to pension and other postretirement benefit plans. The revisions to SFAS No. 132, except for those relating to expected future benefit payments, are effective for fiscal years ending after December 15, 2003

F-14

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

and have been incorporated in the accompanying Notes to Consolidated Financial Statements. Additional disclosures about expected future benefit payments are required for fiscal years ending after June 15, 2004 and will be incorporated in the company’s fiscal 2005 consolidated financial statements.

In January 2004, the FASB issued SFAS No. 106-1, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003.” This statement permits a sponsor to make a one-time election to defer accounting for the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, or the Prescription Drug Act. The Prescription Drug Act, signed into law in December 2003, establishes a prescription drug benefit under Medicare (Medicare Part D) and a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. SFAS No. 106-1 does not provide specific guidance as to whether a sponsor should recognize the effects of the Prescription Drug Act in its financial statements. The Prescription Drug Act introduces two new features to Medicare that must be considered when measuring accumulated postretirement benefit costs. The new features include a subsidy to the plan sponsors that is based on 28% of an individual beneficiary’s annual prescription drug costs between $250 and $5,000 and an opportunity for a retiree to obtain a prescription drug benefit under Medicare. The Prescription Drug Act is not expected to reduce the company’s net postretirement benefit costs. The company has elected to defer adoption of SFAS No. 106-1 due to the lack of specific guidance. Therefore, the net postretirement benefit costs disclosed in the company’s financial statements do not reflect the impacts of the Prescription Drug Act on the plans. The deferral will continue to apply until specific authoritative accounting guidance for the federal subsidy is issued. Authoritative guidance on the accounting for the federal subsidy is pending and, when issued, could require information previously reported in the company’s financial statements to change. The company is currently investigating the impacts of SFAS No. 106-1’s initial recognition, measurement and disclosure provisions on its consolidated financial statements.

Emerging Issues Task Force (EITF) Issue No. 00-21, “Accounting for Revenue Arrangements with Multiple Deliverables”, addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities. EITF Issue No. 00-21 establishes three principles: revenue arrangements with multiple deliverables should be divided into separate units of accounting; arrangement consideration should be allocated among the separate units of accounting based on their relative fair values; and revenue recognition criteria should be considered separately for separate units of accounting. EITF Issue No. 00-21 was effective for all revenue arrangements entered into in fiscal periods beginning after June 15, 2003. The adoption of EITF Issue No. 00-21 did not have an impact on the company’s consolidated financial statements.

EITF Issue No. 01-8, “Determining Whether an Arrangement Contains a Lease”, determines whether an arrangement conveying the right to use property, plant and equipment meets the definition of a lease within the scope of SFAS No. 13, “Accounting for Leases”. EITF Issue No. 01-8 was effective the first interim period beginning after May 28, 2003. The adoption of EITF Issue No. 01-8 did not have an impact on the company’s consolidated financial statements.

EITF Issue No. 03-1, “The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments”, addresses both qualitative and quantitative disclosures. These disclosures are required for marketable equity and debt securities accounted for under FASB Statements No. 115, “Accounting for Certain Investments in Debt and Equity Securities”. The disclosure requirements were effective for fiscal years ending after December 15, 2003. The adoption of EITF Issue No. 03-1 did not have an impact on the company’s consolidated financial statements.

EITF Issue No. 03-10, “Application of EITF Issue No. 02-16, ‘Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor,’ by Resellers to Sales Incentives Offered to Consumers by Manufacturers”, requires that when specified criteria are met, a retailer accepting manufacturers’

F-15

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

coupons should reflect the value of the coupon as revenue and not as a reduction in cost of sales. EITF Issue No. 03-10 was effective for the first interim period beginning after November 25, 2003. The adoption of EITF Issue No. 03-10 did not have an impact on the company’s consolidated financial statements.

In November 2002, the FASB issued FASB Interpretation No. (FIN) 45, “Guarantor’s Accounting and Disclosures Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”. FIN 45 requires that upon issuance of a guarantee, a guarantor must recognize a liability for the fair value of an obligation assumed under a guarantee. FIN 45 also requires statements about the obligations associated with guarantees issued. The recognition provisions of FIN 45 were effective for guarantees issued after December 31, 2002, while the disclosure requirements were effective for financial statements for periods ending after December 15, 2002. The adoption of FIN 45 did not have a material effect on the company’s consolidated financial statements.

In December 2003, the FASB issued FIN 46 (revised December 2003), “Consolidation of Variable Interest Entities” (FIN 46R), which addresses how a business should evaluate whether it has a controlling financial interest in an entity through means other than voting rights and accordingly should consolidate the entity. FIN 46R replaced FIN 46 which was issued in January 2003. FIN 46 or FIN 46R applied immediately to entities created after January 31, 2003 and no later than the end of the first reporting period that ended after December 15, 2003 to entities considered to be special-purpose entities (SPEs). FIN 46R is effective for all other entities no later than the end of the first interim or annual reporting period ending after March 15, 2004. The adoption of the provisions of FIN 46 or FIN 46R relative to SPEs and for entities created after January 31, 2003 did not have an impact on the company’s consolidated financial statements. Additionally, the company does not expect the other provisions of FIN 46R to have an impact on the its consolidated financial statements.

RESTRUCTURE AND OTHER CHARGES

For fiscal 2004, the company recognized pre-tax restructure and other charges of $15.5 million. The charges reflect the net adjustments to the restructure reserves and asset impairment charges of $0.6 million, $14.4 million and $0.5 million for restructure 2002, 2001 and 2000, respectively. The increases are due to continued softening of real estate in certain markets and higher than anticipated employee benefit related costs.

The information within this note includes only those restructure and other charges that are the result of previously initiated restructure activities. In addition, the company maintains reserves and has recorded certain impairments for properties that have been closed as part of management’s ongoing operating decisions. Those reserves and impairment charges are disclosed within the Reserves for Closed Properties and Asset Impairment note in the Notes to Consolidated Financial Statements.

Restructure 2002

In fiscal 2002, the company identified additional efforts that would allow it to extend its food distribution efficiency program that began early in fiscal 2001. The additional food distribution efficiency initiatives identified resulted in pre-tax restructure charges of $16.3 million, primarily related to personnel reductions in administrative and transportation functions. Management began the initiatives in fiscal 2003 and the majority of these actions were completed by the end of fiscal 2003.

In fiscal 2003, the fiscal 2002 restructure charges were decreased by $3.6 million, including a decrease of $1.4 million due to lower than anticipated lease related costs in transportation efficiency initiatives and a decrease of $2.2 million in employee related costs due to lower than anticipated severance costs.

F-16

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In fiscal 2004, the fiscal 2002 restructure charges were increased by $0.6 million due to higher than anticipated severance costs for certain employees.

Remaining reserves for the fiscal 2002 restructure plan represent future lease payments. Details of the fiscal 2002 restructure activity for fiscal 2004 are as follows:

	Balance February 22, 2003		Fiscal 2004 Usage			Fiscal 2004 Adjustment			Balance February 28, 2004
	(In thousands)
Lease related costs:
Transportation efficiency initiatives	$	1,054	$	(816	)	$	(43	)	$	195
		1,054		(816	)		(43	)		195
Employee related costs:
Administrative realignment		2,390		(3,019	)		629			—
		2,390		(3,019	)		629			—
Total restructure charges	$	3,444	$	(3,835	)	$	586		$	195

Details of the fiscal 2002 restructure activity as it relates to the number of terminated employees are as follows:

	Original Estimate	Employees Terminated in Fiscal 2003		Balance February 22, 2003	Employees Terminated in Fiscal 2004		Balance February 28, 2004
Employees	800	(650	)	150	(150	)	—

Restructure 2001

In fiscal 2001, the company completed a strategic review that identified certain assets that did not meet return objectives, provide long-term strategic opportunities or justify additional capital investments. This review process culminated in the company recording pre-tax restructure and other charges of $181.6 million, including $89.7 million for asset impairment charges, $52.1 million for lease subsidies, lease cancellation fees, future payments on exited real estate and guarantee obligations and $39.8 million for severance and employee related costs.

In fiscal 2002, the fiscal 2001 restructure and other charges were increased by $17.8 million as a result of changes in estimates primarily due to the softening real estate market, including $19.1 million for increased lease liabilities in exiting the non-core retail markets and the disposal of non-core assets, offset by a net decrease of $1.3 million in restructure reserves for the consolidation of distribution centers.

In fiscal 2003, the fiscal 2001 restructure and other charges were increased by $8.1 million, including an $11.7 million increase to the restructure reserves offset by a decrease in asset impairment charges of $3.6 million. The reserve increase of $11.7 million was a result of changes in estimates on exited real estate primarily due to the continued softening of real estate marketed for sale, sublease or assignment in certain markets, including approximately $5 million relating to the consolidation of distribution centers, $6 million relating to the exit of non-core retail markets and $1.2 million in higher than anticipated employee related costs primarily in the exit of non-core retail markets.

For fiscal 2004, the fiscal 2001 restructure and other charges were increased by $14.4 million, including an $11.7 million increase to the restructure reserves and a $2.7 million increase in asset impairment charges. The

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SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

reserve increase of $11.7 million was a result of changes in estimates on employee benefit related costs from previously exited food distribution facilities and changes in estimates on exited real estate in certain markets for food distribution properties.

Included in the asset impairment charges in fiscal 2001 of $89.7 million were $57.4 million of charges related to retail food properties and $32.3 million of charges related to food distribution properties. Writedowns for property, plant and equipment, goodwill and other intangibles, and other assets were $58.4 million, $21.8 million and $9.5 million, respectively, and were reflected in the “Restructure and other charges” line in the Consolidated Statements of Earnings for fiscal 2001. In fiscal 2003, the fiscal 2001 asset impairment charges for property, plant and equipment were decreased by $3.6 million primarily due to changes in estimates on exited real estate in certain markets and includes a decrease of $8.2 million in estimates related to certain food distribution properties offset by an increase of $4.6 million in estimates related to certain retail food properties. In fiscal 2004, the fiscal 2001 asset impairment charges for property, plant and equipment were increased by $2.7 million primarily due to changes in estimates on exited real estate in certain markets for food distribution properties. The impairment charges reflect the difference between the carrying value of the assets and the estimated fair values, which were based on the estimated market values for similar assets.

All activity for the fiscal 2001 restructure plan has been completed. Remaining reserves represent future payments on exited real estate and employee benefit related costs from previously exited food distribution facilities. Details of the fiscal 2001 restructure activity for fiscal 2004 are as follows:

	Balance February 22, 2003		Fiscal 2004 Usage			Fiscal 2004 Adjustment			Balance February 28, 2004
	(In thousands)
Lease related costs:
Consolidation of distribution centers	$	6,473	$	(2,384	)	$	(33	)	$	4,056
Exit of non-core retail markets		8,844		(4,458	)		3,266			7,652
Disposal of non-core assets and other administrative reductions		4,299		(1,375	)		536			3,460
		19,616		(8,217	)		3,769			15,168
Employee related costs:
Consolidation of distribution centers		9,604		(5,996	)		7,421			11,029
Exit of non-core retail markets		2,980		(3,087	)		540			433
		12,584		(9,083	)		7,961			11,462
Total restructure and other charges	$	32,200	$	(17,300	)	$	11,730		$	26,630
	Previously Recorded					Fiscal 2004 Adjustment			Balance February 28, 2004
Impairment charges	$	86,169				$	2,737		$	88,906

The number of actual employees terminated under the fiscal 2001 restructure plan was adjusted to a lower number than originally expected primarily due to higher than anticipated voluntary attrition. There was no activity in fiscal 2004. Details of the fiscal 2001 restructure activity as it relates to the number of terminated employees are as follows:

	Original Estimate	Employees Terminated in Prior Years		Adjustments in Prior Years		Balance February 22, 2003
Employees	4,500	(3,767	)	(733	)	—

F-18

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Restructure 2000

In fiscal 2000, the company recorded pre-tax restructure and other charges of $103.6 million as a result of an extensive review to reduce costs and enhance efficiencies. Included in this total was $17.4 million for asset impairment costs. The restructure and other charges include costs for facility consolidation, non-core store disposal, and rationalization of redundant and certain decentralized administrative functions. The original reserve amount was reduced by $10.3 million in fiscal 2001, primarily as a result of a change in estimate for the closure of a remaining facility. The reserve amount was subsequently increased $12.2 million in fiscal 2002, due to a change in estimate on a remaining facility primarily due to the softening real estate market.

In fiscal 2003, the fiscal 2000 restructure and other charges were decreased by $1.6 million, including a $2.9 million increase to the restructure reserves offset by a decrease in asset impairment charges of $4.5 million. The reserve increase of $2.9 million was a result of changes in estimates on exited real estate primarily due to the continued softening of real estate marketed for sale, sublease or assignment in certain markets and higher than anticipated employee related costs.

In fiscal 2004, the fiscal 2000 restructure and other charges were increased by $0.5 million as a result of changes in estimates on exited real estate due to the continued softening of real estate marketed for sale, sublease or assignment in certain markets.

Included in the asset impairment charges in fiscal 2000 of $17.4 million were writedowns on food distribution assets of $10.6 million for property, plant and equipment, $5.6 million of goodwill and other intangibles, and $1.2 million for other assets that were reflected in the “Restructure and other charges” line in the Consolidated Statements of Earnings for fiscal 2000. In fiscal 2003, the fiscal 2000 asset impairment charges for property, plant and equipment on food distribution properties were decreased by $4.5 million primarily due to changes in estimates on exited real estate in certain markets. The impairment charges reflect the difference between the carrying value of the assets and the estimated fair values, which were based on the estimated market values for similar assets.

All activity for the fiscal 2000 restructure plan has been completed. Remaining reserves represent future payments on exited real estate. Details of the fiscal 2000 restructure activity for fiscal 2004 are as follows:

	Balance February 22, 2003		Fiscal 2004 Usage			Fiscal 2004 Adjustment		Balance February 28, 2004
	(In thousands)
Lease related costs:
Facility consolidation	$	8,083	$	(7,667	)	$	34	$	450
Non-core store disposal		3,042		(1,454	)		418		2,006
Total restructure and other charges	$	11,125	$	(9,121	)	$	452	$	2,456
	Previously Recorded					Fiscal 2004 Adjustment		February 28, 2004
Impairment charges	$	12,964				$	18	$	12,982

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SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The number of actual employees terminated under the fiscal 2000 restructure plan was adjusted to a lower number than originally expected primarily due to higher than anticipated voluntary attrition. There was no activity in fiscal 2003 or fiscal 2004. Details of the fiscal 2000 restructure activity as it relates to the number of terminated employees are as follows:

	Original Estimate	Employees Terminated in Prior Years		Adjustments in Prior Years		Balance February 23, 2002
Employees	2,517	(1,693	)	(824	)	—

RESERVES FOR CLOSED PROPERTIES AND ASSET IMPAIRMENT CHARGES

Reserves for Closed Properties

The company maintains reserves for estimated losses on retail stores, distribution warehouses and other properties that are no longer being utilized in current operations. The reserves for closed properties include management’s estimates for lease subsidies, lease terminations, future payments on exited real estate and severance. Details of the activity in the closed property reserves for fiscal 2004, fiscal 2003 and fiscal 2002 are as follows:

(In thousands)	2004			2003			2002
Beginning balance	$	49,873		$	74,996		$	68,067
Additions		10,809			3,169			12,399
Usage		(13,477	)		(28,292	)		(5,470	)
Ending balance	$	47,205		$	49,873		$	74,996

Asset Impairment

The company recognized asset impairment charges of $7.6 million, $15.6 million and $10.0 million in fiscal 2004, 2003 and 2002, respectively, on the write-down of property, plant and equipment for closed properties. For fiscal 2004, of the $7.6 million asset impairment charge recognized, $6.2 million related to retail food and $1.4 million related to food distribution. Asset impairment charges, a component of selling and administrative expenses in the Consolidated Statements of Earnings, reflect the difference between the carrying value of the assets and the estimated fair values, which were based on the estimated market values for similar assets.

ASSETS HELD FOR SALE

At February 28, 2004, the company had approximately $9.7 million of assets classified as held for sale reflected as a component of other current assets in the Consolidated Balance Sheets. These assets are for closed distribution centers that the company is actively marketing for sale. The company anticipates selling or disposing of these assets within one year from the date the assets were designated as held for sale.

NOTES RECEIVABLE

Notes receivable arise from financing activities with independent retail food customers. Loans to retailers, as well as trade accounts receivable, are primarily collateralized by the retailers’ inventory, equipment and fixtures. The notes range in length from 1 to 15 years with an average term of 6 years, and may be non-interest bearing or bear interest at rates ranging from 5 to 11 percent.

Included as a component of current receivables, net in the Consolidated Balance Sheets are notes receivable, net due within one year of $25.5 million and $30.3 million at February 28, 2004 and February 22, 2003, respectively.

F-20

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

In the third quarter of fiscal 2004, the company completed an asset exchange with C&S Wholesale Grocers, Inc. (C&S) whereby the company acquired certain former Fleming Companies’ distribution operations in the Midwest from C&S in exchange for the company’s New England operations (the “Asset Exchange”). The Asset Exchange resulted in the addition of approximately $58.6 million of intangible assets related to customer relationships and trademarks and a reduction in goodwill of $20.0 million related to the company’s New England operations.

At February 28, 2004, the company had approximately $1.6 billion of goodwill of which $0.9 billion related to retail food and $0.7 billion related to food distribution.

In the following table, the company has adjusted reported net earnings, diluted net earnings per common share and basic net earnings per common share to exclude amortization expense related to goodwill, that is no longer being amortized upon the adoption of SFAS No. 142:

(In thousands, except per share data)	2004		2003		2002
Reported net earnings	$	280,138	$	257,042	$	198,326
Goodwill amortization		—		—		48,363
Adjusted net earnings	$	280,138	$	257,042	$	246,689
Diluted net earnings per common share:
Reported net earnings	$	2.07	$	1.91	$	1.48
Goodwill amortization		—		—		0.35
Adjusted net earnings	$	2.07	$	1.91	$	1.83
Basic net earnings per common share:
Reported net earnings	$	2.09	$	1.92	$	1.49
Goodwill amortization		—		—		0.35
Adjusted net earnings	$	2.09	$	1.92	$	1.84

A summary of changes in the company’s other acquired intangible assets during fiscal 2003 and fiscal 2004 follows:

	February 23, 2002			Amorti- zation			Additions		Other net adjustments			February 22, 2003			Amorti- zation			Additions		Other net adjustments			February 28, 2004
	(in thousands)
Trademarks	$	—					$	—	$	—		$	—					$	15,269	$	—		$	15,269
Leasehold Rights, Customer lists and other (accumulated amortization of $17,836 and $15,396, at February 28, 2004 and February 22, 2003)		47,310						2,660		(307	)		49,663						—		(294	)		49,369
Customer relationships (accumulated amortization of $495 at February 28, 2004)		—						—		—			—						43,361		—			43,361
Non-compete agreements (accumulated amortization of $3,959 and $4,376 at February 28, 2004 and February 22, 2003)		8,406						—		100			8,506						502		(1,789	)		7,219
Total other acquired intangible assets		55,716						2,660		(207	)		58,169						59,132		(2,083	)		115,218
Accumulated amortization		(16,298	)	$	(3,903	)		—		429			(19,772	)	$	(4,541	)		—		2,023			(22,290	)
Total other acquired intangible assets, net	$	39,418		$	(3,903	)	$	2,660	$	222		$	38,397		$	(4,541	)	$	59,132	$	(60	)	$	92,928

F-21

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Other acquired intangible assets are a component of other assets in the Consolidated Balance Sheets. Amortization expense of $4.5 million, $3.9 million and $3.1 million was recorded in fiscal 2004, 2003 and 2002, respectively. Future amortization expense will approximate $6.0 million per year for each of the next five years. Intangible assets with a definite life are amortized on a straight-line basis with estimated useful lives ranging from five to twenty years. All intangible assets are amortizable with the exception of the trademarks.

INVESTMENTS IN UNCONSOLIDATED EQUITY AFFILIATES

The company recognized $39.2 million, $39.7 million and $29.2 million of equity in earnings from investments in unconsolidated equity affiliates in fiscal 2004, 2003 and 2002, respectively. The equity method of accounting is used for companies and other investments in which the company has significant influence, which generally represents common stock ownership or partnership equity of at least 20% and not more than 50%. At year-end 2004, the company’s investment in unconsolidated equity affiliates primarily include a 22% interest in WinCo Foods, Inc., a privately-held regional grocery chain that operates stores in Idaho, Oregon, Nevada, Washington and California, a 26% interest in International Data, LLC, a strategic outsourcing services provider, specializing in, among other things, data services, check and remittance processing and coupon promotions processing and a 40% interest in Tidyman’s, LLC, the owner and operator of retail supermarkets located in Montana, Idaho and Washington. These investments primarily relate to the retail food segment.

On April 1, 2004, the company completed the sale of its minority ownership interest in WinCo Foods, Inc. This investment basis was approximately $119 million and is a component of other current assets in the Consolidated Balance Sheets as of February 28, 2004. See Subsequent Events note on page F-36 in the Notes to Consolidated Financial Statements.

FINANCIAL INSTRUMENTS

Interest Rate Swap Agreements

On February 25, 2001, due to the implementation of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities”, the company’s existing interest rate swap agreements were recorded at fair market value in the company’s Consolidated Balance Sheets. On July 6, 2001, the two swaps were terminated and the remaining fair market value adjustments, which were offsetting, were being amortized over the original term of the hedge. In conjunction with the company’s early redemption of its $100 million 8.875% Notes due 2022 in fiscal 2004, the remaining fair market value adjustments of the two terminated swaps relating to these notes were recognized as interest expense during fiscal 2004. There was no net impact to the Consolidated Statement of Earnings as the two terminated swaps were offsetting.

In fiscal 2003, the company entered into swap agreements in the notional amount of $225.0 million that exchange a fixed interest rate payment obligation for a floating interest rate payment obligation. The swaps have been designated as a fair value hedge on long-term fixed rate debt of the company and are components of other assets in the Consolidated Balance Sheets. At February 28, 2004, and February 22, 2003, the hedge was highly effective. Changes in the fair value of the swaps and debt are reflected as a component of selling and administrative expense in the Consolidated Statements of Earnings, and through February 28, 2004, the net earnings impact was zero.

The company has limited involvement with derivative financial instruments and uses them only to manage well-defined interest rate risks. The company does not use financial instruments or derivatives for any trading or other speculative purposes.

Fair Value Disclosures of Financial Instruments

For certain of the company’s financial instruments, including cash and cash equivalents, receivables and notes payable, the carrying amounts approximate fair value due to their short maturities.

F-22

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The estimated fair value of notes receivable approximates the net carrying value at February 28, 2004 and February 22, 2003. Notes receivable are valued based on a discounted cash flow approach applying a rate that is comparable to publicly traded debt instruments of similar credit quality.

The estimated fair value of the company’s long-term debt (including current maturities) was in excess of the carrying value by approximately $149.5 million and $86.1 million at February 28, 2004 and February 22, 2003, respectively. The estimated fair value was based on market quotes, where available, or market values for similar instruments.

The estimated fair value of the company’s interest rate swaps approximates the carrying value at February 28, 2004. The fair value of interest rate swaps are the amounts at which they could be settled and are estimated by obtaining quotes from brokers.

DEBT

Notes, debentures and other debt were composed of the following at year-end:

	February 28, 2004		February 22, 2003
	(In thousands)
7.875% promissory note due fiscal 2010	$	350,000	$	350,000
7.5% promissory note due fiscal 2013		300,000		300,000
7.625% promissory note due fiscal 2005		250,000		250,000
8.875% promissory note due fiscal 2023		—		100,000
Zero-coupon convertible debentures		236,619		226,152
6.48%-6.69% medium-term notes due fiscal 2006-2007		103,500		103,500
Variable rate industrial revenue bonds		59,530		70,530
8.28%-9.96% promissory notes due fiscal 2010-2011		20,362		26,675
7.78%, 8.02% and 8.57% obligations with quarterly payments of principal and interest due fiscal 2005 through 2007		33,381		47,134
Other debt		31,905		32,062
		1,385,297		1,506,053
Less current maturities		273,811		31,124
Long-term debt	$	1,111,486	$	1,474,929

Aggregate maturities of long-term debt are:

	(In thousands)
2005	$	273,811
2006		63,738
2007		74,053
2008		5,521
2009 and thereafter		968,174

The debt agreements contain various financial covenants including ratios for fixed charge interest coverage, asset coverage and debt leverage, in addition to a minimum net worth covenant as defined in the company’s debt agreements. The company has met the financial covenants under the debt agreements as of February 28, 2004.

F-23

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In November 2003, the company voluntarily redeemed $100.0 million of its 8.875% notes due in 2022 at a redemption price of 103.956% of the principal amount of the notes.

In August 2003, the company renewed its annual accounts receivable securitization program, under which the company can borrow up to $200.0 million on a revolving basis, with borrowings secured by eligible accounts receivable. Outstanding borrowings under this program at February 28, 2004 and February 22, 2003, were $0 and $80.0 million, respectively, and are components of notes payable in the Consolidated Balance Sheets. The average short-term interest rate was 1.32% for fiscal 2004.

In May 2002, the company completed the issuance of the $300.0 million 10-year 7.50% Senior Notes. A portion of the proceeds was used to redeem the company’s 9.75% Senior Notes due fiscal 2005 on June 17, 2002. In November 2002, the company also retired $300.0 million 7.80% Notes that matured.

In April 2002, the company finalized a three-year, unsecured $650.0 million revolving credit agreement with rates tied to LIBOR plus 0.650 to 1.400 percent, based on the company’s credit ratings. The agreement contains various financial covenants including ratios for fixed charge interest coverage, asset coverage and debt leverage, in addition to a minimum net worth covenant. The company had no outstanding borrowings under the credit facilities at February 28, 2004 and February 22, 2003. As of February 28, 2004, letters of credit outstanding under the credit facility were $120.1 million and the unused available credit under the facility was $529.9 million.

In November 2001, the company sold zero-coupon convertible debentures having an aggregate principal amount at maturity of $811.0 million. The proceeds from the offering, net of approximately $5.0 million of expenses, were $208.0 million. The debentures mature in 30 years and are callable at the company’s option on or after October 1, 2006. Holders may require the company to purchase all or a portion of their debentures on October 1, 2003, October 1, 2006 or October 1, 2011 at a purchase price equal to the accreted value of the debentures, which includes accrued and unpaid cash interest. If the option is exercised, the company has the choice of paying the holder in cash, common stock or a combination of the two. On October 1, 2003, none of the holders exercised this option. The debentures will generally be convertible if the closing price of the company’s common stock on the New York Stock Exchange for twenty of the last thirty trading days of any fiscal quarter exceeds certain levels, at $36.58 per share for the quarter ending June 19, 2004, and rising to $113.29 per share at September 6, 2031. In the event of conversion, 9.6434 shares of the company’s common stock will be issued per $1,000 debenture. The debentures have an initial yield to maturity of 4.5%, which is being accreted over the life of the debentures using the effective interest method. The company may pay contingent cash interest for the six-month period commencing November 3, 2006 and for any six-month period thereafter if the average market price of the debentures for a five trading day measurement period preceding the applicable six-month period equals 120% or more of the sum of the issue price and accrued original issue discount for the debentures. The debentures are classified as long-term debt based on the company’s ability and intent to refinance the obligation with long-term debt if the company is required to repurchase the debentures.

See Subsequent Events note on page F-36 in the Notes to Consolidated Financial Statements.

LEASES

Capital and operating leases:

The company leases certain retail food stores, food distribution warehouses and office facilities. Many of these leases include renewal options, and to a limited extent, include options to purchase. Amortization of assets under capital leases was $35.1 million, $32.8 million and $31.6 million in fiscal 2004, 2003 and 2002, respectively.

F-24

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Future minimum obligations under capital leases in effect at February 28, 2004 are as follows:

	Lease Obligations
	(In thousands)
Fiscal Year
2005	$	63,345
2006		62,072
2007		62,209
2008		61,509
2009		58,528
Later		539,825
Total future minimum obligations		847,488
Less interest		365,679
Present value of net future minimum obligations		481,809
Less current obligations		24,955
Long-term obligations	$	456,854

The present values of future minimum obligations shown are calculated based on interest rates ranging from 6.0 percent to 13.8 percent, with a weighted average rate of 8.1 percent, determined to be applicable at the inception of the leases.

In addition to its capital leases, the company is obligated under operating leases, primarily for buildings, warehouses and computer equipment. Future minimum obligations under operating leases in effect at February 28, 2004 are as follows:

	Operating Lease Obligations
	(In thousands)
Fiscal Year
2005	$	160,589
2006		124,290
2007		114,736
2008		94,020
2009		135,802
Later		403,126
Total future minimum obligations	$	1,032,563

The company is party to synthetic leasing programs for two of its major warehouses. The leases qualify for operating lease accounting treatment under SFAS No. 13, “Accounting for Leases”. For additional information on synthetic leases, refer to the Commitments, Contingencies and Off-Balance Sheet Arrangements note in the Notes to Consolidated Financial Statements.

Total rent expense, net of sublease income, relating to all operating leases with terms greater than one year was $119.7 million, $113.7 million and $100.7 million in fiscal 2004, 2003 and 2002, respectively.

F-25

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Future minimum receivables under operating leases and subleases in effect at February 28, 2004 are as follows:

	Owned Property		Leased Property		Total
	(In thousands)
Fiscal Year
2005	$	1,496	$	22,971	$	24,467
2006		1,450		19,388		20,838
2007		1,113		16,583		17,696
2008		1,069		13,026		14,095
2009		526		9,025		9,551
Later		470		38,039		38,509
Total future minimum receivables	$	6,124	$	119,032	$	125,156

Owned property leased to third parties is as follows:

	February 28, 2004		February 22, 2003
	(In thousands)
Land, buildings and equipment	$	16,839	$	19,161
Less accumulated depreciation		8,056		7,171
Net land, buildings and equipment	$	8,783	$	11,990

The company recognizes rent escalations on a straight-line basis over the term of the lease. Deferred rents are included in other liabilities in the Consolidated Balance Sheets.

Direct financing leases:

Under direct financing capital leases, the company leases buildings on behalf of independent retailers with terms ranging from 5 to 20 years. Future minimum rentals to be received under direct financing leases and related future minimum obligations under capital leases in effect at February 28, 2004, are as follows:

	Direct Financing Lease Receivables		Direct Financing Capital Lease Obligations
	(In thousands)
Fiscal Year
2005	$	13,239	$	12,473
2006		12,163		11,470
2007		11,523		10,935
2008		10,498		9,923
2009		9,742		9,223
Later		56,879		54,366
Total minimum lease payments		114,044		108,390
Less unearned income		38,223		—
Less interest		—		35,831
Present value of net minimum lease payments		75,821		72,559
Less current portion		7,133		7,178
Long-term portion	$	68,688	$	65,381

F-26

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

INCOME TAXES

The provision for income taxes consists of the following:

	2004			2003			2002
	(In thousands)
Current
Federal	$	110,031		$	78,704		$	50,152
State		14,495			12,050			7,910
Tax credits		(1,500	)		(1,000	)		(750	)
Total current		123,026			89,754			57,312
Deferred		51,716			61,208			76,360
Total provision	$	174,742		$	150,962		$	133,672

The difference between the actual tax provision and the tax provision computed by applying the statutory federal income tax rate to earnings before taxes is attributable to the following:

	2004			2003			2002
	(In thousands)
Federal taxes based on statutory rate	$	159,208		$	142,801		$	116,199
State income taxes, net of federal benefit		13,394			12,153			11,562
Nondeductible goodwill		6,809			—			15,439
Audit settlements		(2,214	)		—			(4,583	)
Other		(2,455	)		(3,992	)		(4,945	)
Total provision	$	174,742		$	150,962		$	133,672

Temporary differences which give rise to significant portions of the net deferred tax asset (liability) as of February 28, 2004 and February 22, 2003 are as follows:

	2004			2003
	(In thousands)
Deferred tax assets:
Restructure	$	38,561		$	58,515
Net operating loss from acquired subsidiaries		28,919			35,853
Reserves not currently deductible		154,524			151,233
Minimum pension liability		64,192			47,025
Inventories		16,732			16,247
Other		25,303			25,783
Total deferred tax assets		328,231			334,656
Deferred tax liabilities:
Depreciation and amortization		(106,445	)		(84,318	)
Acquired assets basis difference		(50,377	)		(58,886	)
Accelerated deductions		(175,609	)		(175,507	)
Other		(105,789	)		(87,173	)
Total deferred tax liabilities		(438,220	)		(405,884	)
Net deferred tax liability	$	(109,989	)	$	(71,228	)

F-27

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The company currently has net operating loss (NOL) carryforwards from acquired companies of $ 75.9 million for tax purposes, which expire beginning in 2007 and continuing through 2018.

Based on management’s assessment, it is more likely than not that all of the deferred tax assets will be realized; therefore, no valuation allowance is considered necessary.

ACCUMULATED OTHER COMPREHENSIVE LOSSES

The accumulated balances, net of deferred taxes, for each classification of accumulated other comprehensive losses are as follows:

	Derivative Financial Instrument- Unrealized Loss			Minimum Pension Liability Adjustment			Accumulated Other Comprehensive Losses
	(In thousands)
Balances at February 22, 2003	$	(6,735	)	$	(72,328	)	$	(79,063	)
Minimum pension liability		—			(26,404	)		(26,404	)
Amortization of loss on derivative financial instrument (including impact of debt redemption)		6,735			—			6,735
Balances at February 28, 2004	$	—		$	(98,732	)	$	(98,732	)

On February 25, 2001, due to the implementation of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities”, the company’s existing interest rate swap agreements were recorded at fair market value in the company’s Consolidated Balance Sheets. On July 6, 2001, the two swaps were terminated and the remaining fair market value adjustments, which were offsetting, were being amortized over the original term of the hedge. In conjunction with the company’s early redemption of its $100 million 8.875% Notes due 2022 in fiscal 2004, the remaining fair market value adjustments of the two terminated swaps relating to these notes were recognized as interest expense in fiscal 2004. There was no net impact to the Consolidated Statement of Earnings for fiscal 2004 as the two terminated swaps were offsetting.

STOCK OPTION PLANS

The company’s 2002 and SUPERVALU/Richfood 1996 stock option plans allow the granting of non-qualified stock options and incentive stock options to purchase shares of the company’s common stock, to salaried employees at prices not less than 100 percent of their fair market value, determined based on the average of the opening and closing sale price of a share on the date of grant. The company’s 1997 stock plan allows only the granting of non-qualified stock options to purchase common shares to salaried employees at fair market value determined on the same basis. In April 2002, the Board of Directors reserved an additional 3.8 million shares for issuance under the 1997 plan. The company also has options outstanding under its 1983 and 1993 plans, but no further options may be granted under these plans. The plans provide that the Board of Directors or the Executive Personnel and Compensation Committee of the Board (the “Committee”) may determine at the time of granting whether each option granted, except those granted under the 1997 plan, will be a non-qualified or incentive stock option under the Internal Revenue Code. The terms of each option will be determined by the Board of Directors or the Committee, but shall not be for more than 10 years from the date of grant, generally with a vesting period of zero to four years. Options may be exercised in installments or otherwise, as the Board of Directors or the Committee, may determine.

F-28

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Changes in the options granted, exercised and outstanding under such plans are as follows:

	Shares		Weighted Average Price per Share
	(In thousands)
Outstanding, February 24, 2001	14,410		$	20.26
Granted	1,215			17.32
Exercised	(1,781	)		15.82
Canceled and forfeited	(677	)		18.23
Outstanding, February 23, 2002	13,167		$	20.69
Granted	2,885			28.27
Exercised	(2,896	)		17.44
Canceled and forfeited	(151	)		20.84
Outstanding, February 22, 2003	13,005		$	23.10
Granted	2,716			17.70
Exercised	(2,103	)		17.36
Canceled and forfeited	(1,779	)		36.18
Outstanding, February 28, 2004	11,839		$	20.92

The following table summarizes stock option information at year-end 2004:

	Options Outstanding				Options Exercisable
Range of Exercise Price	Number of Options	Weighted- Average Remaining Contractual Life	Weighted- Average Exercise Price		Number of Options	Weighted- Average Exercise Price
$12.25 to $14.50	1,814,037	5.73 years		14.30	1,280,897		14.28
14.78 to   15.81	1,060,757	5.16		15.35	803,057		15.32
15.90 to   15.90	1,740,738	9.11		15.90	260,183		15.90
16.08 to   20.69	1,840,505	5.80		19.54	1,533,905		19.72
20.72 to   23.08	1,693,847	4.27		22.58	1,643,697		22.61
23.09 to   26.06	543,230	3.96		24.63	449,052		24.64
26.10 to   27.98	1,924,837	7.70		27.89	890,032		27.79
28.07 to   32.24	1,189,679	4.27		29.81	1,062,740		29.79
32.77 to   34.44	31,575	4.08		33.08	31,575		33.08
$12.25 to $34.44	11,839,205	6.07	$	20.92	7,955,138	$	21.45

Option shares available for grant were 6.2 million and 7.3 million at February 28, 2004 and February 22, 2003, respectively. As of February 28, 2004, the company has reserved 18.0 million shares, in aggregate, for the plans.

As of February 28, 2004, limited stock appreciation rights have been granted and are outstanding under the 1989 stock appreciation rights plan and the 1993 stock plan. Such rights relate to options granted to purchase 494,000 shares of common stock and are exercisable only upon a “change in control.”

F-29

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In addition to the stock plans described above, the company incurs expenses under long-term incentive and restricted stock plans at the discretion of the Board of Directors. Compensation expense under these plans was $1.7 million, $4.1 million and $4.7 million for fiscal 2004, 2003 and 2002, respectively.

See Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements for the impact of stock based compensation on pro forma net earnings and earnings per common share.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions and results:

	2004	2003	2002
Dividend yield	2.00%	2.00%	2.00%
Risk free interest rate	2.10%	2.86%	4.23%
Expected life	4.5 years	4.5 years	4.5 years
Expected volatility	32.04%	34.66%	32.50%
Estimated fair value of options granted per share	$4.25	$7.77	$4.85

TREASURY STOCK PURCHASE PROGRAM

In August 1996, the Board of Directors authorized a treasury stock purchase program under which the company was authorized to repurchase up to 10.0 million shares of the company’s common stock for reissuance upon the exercise of employee stock options and for other compensation programs utilizing the company’s stock. In fiscal 2002, the company completed the program by purchasing 0.2 million shares at an average cost of $19.97 per share. This brought the total repurchases under the program to 10.0 million shares.

In October 2001, the Board of Directors authorized a treasury stock purchase program under which the company is authorized to purchase up to 5.0 million shares of the company’s common stock for reissuance upon the exercise of employee stock options and for other compensation programs utilizing the company’s stock. In fiscal 2002, the company purchased 1.3 million shares under the program at an average cost of $22.16 per share. In fiscal 2003, the company purchased 1.5 million shares under the program at an average cost of $27.94 per share. In fiscal 2004, the company purchased 0.6 million shares under the program at an average cost of $23.80 per share. As of February 28, 2004, 1.6 million shares remained available for purchase under this program.

EARNINGS PER SHARE

The following table reflects the calculation of basic and diluted earnings per share:

	2004		2003		2002
	(In thousands, except per share amounts)
Earnings per share—basic
Earnings available to common shareholders	$	280,138	$	257,042	$	198,326
Weighted average shares outstanding		133,975		133,730		132,940
Earnings per share—basic	$	2.09	$	1.92	$	1.49
Earnings per share—diluted
Earnings available to common shareholders	$	280,138	$	257,042	$	198,326
Weighted average shares outstanding		133,975		133,730		132,940
Dilutive impact of options outstanding		1,443		1,147		1,038
Weighted average shares and potential dilutive shares outstanding		135,418		134,877		133,978
Earnings per share—diluted	$	2.07	$	1.91	$	1.48

F-30

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

COMMITMENTS, CONTINGENCIES AND OFF-BALANCE SHEET ARRANGEMENTS

The company has guaranteed certain leases, fixture financing loans and other debt obligations of various retailers at February 28, 2004. These guarantees were generally made to support the business growth of affiliated retailers. The guarantees are generally for the entire term of the lease or other debt obligation with remaining terms that range from less than one year to twenty-two years, with a weighted average remaining term of approximately ten years. For each guarantee issued, if the affiliated retailer defaults on a payment, the company would be required to make payments under its guarantee. Generally, the guarantees are secured by indemnification agreements or personal guarantees of the affiliated retailer. At February 28, 2004, the maximum amount of undiscounted payments the company would be required to make in the event of default of all guarantees was $290.4 million and represented $180.3 million on a discounted basis. No amount has been accrued for the company’s obligation under its guaranty arrangements. In addition, the company has guaranteed a construction loan on a warehouse of $1.5 million at February 28, 2004 that the company will purchase upon completion. The company has evaluated its agreements that contain guarantees and indemnification clauses in accordance with the guidance of FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”. As of February 28, 2004, the company did not have any material guarantees that were issued or modified since December 31, 2002.

The company is party to synthetic leasing programs for two of its major warehouses. The leases expire in September 2004 and April 2008. The lease that expires in September 2004 may be renewed with the lessor’s consent through September 2006, and has a purchase option of approximately $25 million. The lease that expires in April 2008 has a purchase option of $60.0 million. At February 28, 2004, the estimated market value of the properties underlying these leases equaled or exceeded the purchase options. The company’s obligation under its guaranty arrangements related to these synthetic leases had a carrying balance of $2.8 million, which is reflected as a component of other liabilities in the Consolidated Balance Sheets at February 28, 2004.

The company had $145.7 million of outstanding letters of credit as of February 28, 2004, of which $120.1 million were issued under the credit facility and $25.6 million were issued under separate agreements with financial institutions. These letters of credit primarily support workers’ compensation, merchandise import programs, and payment obligations. The company pays fees, which vary by instrument, of up to 1.125% on the outstanding balance of the letter of credit.

In July and August 2002, several class action lawsuits were filed against the company and certain of its officers and directors in the United States District Court for the District of Minnesota on behalf of purchasers of the company’s securities between July 11, 1999 and June 26, 2002. The lawsuits have been consolidated into a single action, in which it is alleged that the company and certain of its officers and directors violated Federal securities laws by issuing materially false and misleading statements relating to its financial performance. The company believes that the lawsuit is without merit, intends to vigorously defend the action and presently has moved for dismissal. No damages have been specified. The company is unable to evaluate the likelihood of prevailing in the case at this stage of the proceedings.

The company is a party to various legal proceedings arising from the normal course of business activities, none of which, in management’s opinion, is expected to have a material adverse impact on the Company’s consolidated statement of earnings or consolidated financial position.

RETIREMENT PLANS

Substantially all non-union employees of the company and its subsidiaries are covered by various contributory and non-contributory pension or profit sharing plans. The company also participates in several

F-31

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

multi-employer plans providing defined benefits to union employees under the provisions of collective bargaining agreements. Amounts charged to union pension expense were $34.2 million, $35.2 million and $38.4 million for fiscal 2004, 2003, and 2002, respectively.

Contributions under the defined contribution 401(k) and profit sharing plans are determined by plan provisions or at the discretion of the company’s Retirement Committee and were $17.1 million, $8.0 million and $16.1 million for fiscal 2004, 2003, and 2002, respectively. Plan assets also include 3.0 million shares and 2.9 million shares of the company’s common stock at February 28, 2004 and February 22, 2003, respectively.

Benefit calculations for the company’s defined benefit pension plans for non-union eligible participants are generally based on years of service and the participants’ highest compensation during five consecutive years of employment. Annual payments to the pension trust fund are determined in compliance with the Employee Retirement Income Security Act (ERISA). Plan assets are held in trust and invested in separately managed accounts and publicly traded mutual funds holding equity, fixed income securities and alternative investment classes.

In addition to providing pension benefits, the company provides certain health care and life insurance benefits for certain retired employees. Certain employees become eligible for these benefits upon meeting certain age and service requirements.

F-32

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following tables set forth the changes in benefit obligations and plan assets, a reconciliation of the accrued benefit costs and total benefit costs for the fiscal years for the company’s non-union defined benefit pension plans and the post retirement benefit plans:

	Pension Benefits						Post Retirement Benefits
	February 28, 2004			February 22, 2003			February 28, 2004			February 22, 2003
	(In thousands)
CHANGES IN BENEFIT OBLIGATIONS
Benefit obligations at beginning of year	$	502,383		$	466,770		$	111,320		$	103,687
Service cost		18,243			18,333			1,350			1,790
Interest cost		35,003			33,228			7,457			7,336
Plan amendments		—			10,123			(4,495	)		—
Actuarial (gain) loss		86,248			(5,709	)		17,025			5,445
Benefits paid		(23,307	)		(20,362	)		(7,576	)		(6,938	)
Benefit obligations at end of year	$	618,570		$	502,383		$	125,081		$	111,320
CHANGES IN PLAN ASSETS
Fair value of plan assets at beginning of year	$	393,104		$	396,034		$	—		$	—
Actual return on plan assets		72,012			(26,846	)		—			—
Company contributions		25,000			44,278			7,576			6,938
Plan participants’ contributions		—			—			4,801			4,120
Benefits paid		(23,307	)		(20,362	)		(12,377	)		(11,058	)
Fair value of plan assets at end of year	$	466,809		$	393,104		$	—		$	—
RECONCILIATION OF PREPAID (ACCRUED) COST AND TOTAL AMOUNT RECOGNIZED
Funded status	$	(151,761	)	$	(109,279	)	$	(125,081	)	$	(111,320	)
Accrued contribution		—			—			—			—
Unrecognized net loss		216,919			169,611			59,723			46,003
Unrecognized prior service cost		9,027			10,134			(10,033	)		(6,738	)
Prepaid (accrued) cost	$	74,185		$	70,466		$	(75,391	)	$	(72,055	)
Prepaid benefit cost	$	—		$	—
Accrued benefit liability		(90,439	)		(52,144	)
Intangible asset		9,027			10,134
Accumulated other comprehensive income		155,597			112,476
Total recognized	$	74,185		$	70,466

F-33

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Pension Benefits									Post Retirement Benefits
	2004			2003			2002			2004			2003			2002
	(In thousands)
NET BENEFIT COSTS FOR THE FISCAL YEAR
Service cost	$	18,242		$	18,333		$	17,487		$	1,350		$	1,790		$	1,902
Interest cost		35,003			33,228			31,163			7,457			7,336			6,031
Expected return on plan assets		(40,970	)		(40,323	)		(41,386	)		—			—			—
Amortization of:
Unrecognized net loss		7,898			2,085			—			3,305			2,744			715
Unrecognized prior service cost		1,107			(158	)		(159	)		(1,200	)		(1,200	)		(736	)
Net benefit costs for the fiscal year	$	21,280		$	13,165		$	7,105		$	10,912		$	10,670		$	7,912

In March 2002, the company amended its pension plan by adopting the Economic Growth and Tax Relief Reconciliation Act of 2001. The amendments included increasing the maximum plan benefit from $140,000 to $160,000 and the compensation limit from $170,000 to $200,000 and resulted in an increase to the plan’s benefit obligation of approximately $10.1 million in fiscal 2003. In March 2003 and 2004, the company amended its post retirement medical health care benefit plan, primarily making changes to benefit coverage. This amendment resulted in a decrease in the plan’s benefit obligation of approximately $4.5 million in fiscal 2004.

SFAS No. 87, “Employers’ Accounting for Pension”, requires the balance sheet to reflect a prepaid pension asset or minimum pension liability based on the current market value of plan assets and the accumulated benefit obligation of the plan. Based on both performance of the pension plan assets and plan assumption changes, the company recorded a net after-tax adjustment of $26.4 million in fiscal 2004 and $72.3 million in fiscal 2003 to reflect a minimum pension liability of $98.7 million after-tax as of February 28, 2004. The $43.5 million pre-tax adjustment for fiscal 2004 includes $43.1 million for the pension plan and $0.4 million for the non-contributory, unfunded pension plans, discussed below. For fiscal 2003, the $119.4 million pre-tax adjustment includes $112.5 million for the pension plan and $6.9 million for the non-contributory, unfunded pension plans.

The company utilized the following assumptions in the calculations for pension and the non-contributory unfunded pension plans:

	2004		2003		2002
Weighted-average assumptions used to determine benefit obligations:
Discount rate	6.25	%	7.00	%	7.25	%
Rate of compensation increase	3.00	%	3.25	%	3.50	%
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate	7.00	%	7.25	%	7.75	%
Rate of Compensation Increase	3.25	%	3.50	%	4.00	%
Expected return on plan assets	9.00	%	9.25	%	10.00	%

The assumed health care cost trend rate used in measuring the accumulated post retirement benefit obligation was 8.0 percent in fiscal 2004. The assumed health care cost trend rate will decrease by one percent each year for the next three years until it reaches the ultimate trend rate of 5.0 percent. The health care cost trend rate assumption has a significant impact on the amounts reported. For example, a one percent increase in the

F-34

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

trend rate would increase the accumulated postretirement benefit obligation by $7.0 million and the net periodic cost by $0.4 million in fiscal 2004. In contrast, a one percent decrease in the trend rate would decrease the accumulated postretirement benefit obligation by $6.6 million and the net periodic cost by $0.4 million in fiscal 2004.

The company also maintains non-contributory, unfunded pension plans to provide certain employees with pension benefits in excess of limits imposed by federal tax law. The projected benefit obligation of the unfunded plans was $24.9 million and $23.5 million at February 28, 2004 and February 22, 2003, respectively. The accumulated benefit obligation of these plans totaled $21.0 million and $19.3 million at February 28, 2004 and February 22, 2003, respectively. Net periodic pension cost was $3.6 million, $2.7 million and $2.8 million for 2004, 2003 and 2002, respectively.

The company employs a total return approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. Alternative investments, including hedge funds, private equity and real estate are also used judiciously to enhance risk adjusted long-term returns while improving portfolio diversification. The overall investment strategy and policy has been developed based on the need to satisfy the long-term liabilities of the company’s pension plans. Risk management is accomplished through diversification across asset classes, multiple investment manager portfolios and both general and portfolio-specific investment guidelines. Risk tolerance is established through careful consideration of the plan liabilities, plan funded status and the company’s financial conditions. This asset allocation policy mix is reviewed annually and actual allocations are rebalanced on a regular basis.

Plan assets are invested using a combination of active and passive investment strategies. Passive strategies invest in broad sectors of the market primarily through the use of indexing. Indexing is an investment management approach based on investing in exactly the same securities, in the same proportions, as an index, such as the S&P 500. The management style is considered passive because portfolio managers don’t make decisions about which securities to buy and sell, they simply mimic the composition and weightings of the appropriate stock or bond market index. Active strategies employ multiple investment management firms. Managers within each asset class cover a range of investment styles and approaches and are combined in a way that controls for capitalization, and style biases (equities), and interest rate bets (fixed income) versus benchmark indices while focusing primarily on issue selection as a means to add value. Monitoring activities to evaluate performance against targets and measure investment risk take place on an ongoing basis through annual liability measurements, periodic asset/liability studies and quarterly investment portfolio reviews.

The following table summarizes the actual allocation of our pension plan assets at its November 30 measurement date as well as our target allocation are as follows:

Asset Category	Target Allocation Ranges					Plan Assets Fiscal 2004		Plan Assets Fiscal 2003
Domestic Equity	45.0	%	—	70.0	%	62.8	%	59.7	%
International Equity	7.0	%	—	20.0	%	9.7	%	9.3	%
Domestic Fixed Income	25.0	%	—	35.0	%	26.7	%	29.7	%
Cash and Other	0.0	%	—	15.0	%	0.8	%	1.3	%
Total						100.0	%	100.0	%

F-35

SUPERVALU INC. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The expected long-term rate of return for Plan assets was determined based on the projection of asset class return expectations applied to the target asset allocation of the Plan assets. Consideration was given to widely-accepted capital market principles, long-term return analysis for global fixed income and equity markets, the active total return oriented portfolio management style as well as the diversification needs and rebalancing characteristics of the Plan. Long-term trends were evaluated relative to market factors such as inflation, interest rates and fiscal and monetary polices in order to assess the capital market assumptions.

The company expects to contribute approximately $25 million to its defined benefit pension plans during fiscal 2005.

SHAREHOLDER RIGHTS PLAN

On April 24, 2000, the company announced that the Board of Directors adopted a Shareholder Rights Plan under which one preferred stock purchase right is distributed for each outstanding share of common stock. The rights, which expire on April 12, 2010, are exercisable only under certain conditions, and may be redeemed by the Board of Directors for $0.01 per right. The plan contains a three-year independent director evaluation provision whereby a committee of the company’s independent directors will review the plan at least once every three years. The rights become exercisable, with certain exceptions, after a person or group acquires beneficial ownership of 15 percent or more of the outstanding voting stock of the company.

SUBSEQUENT EVENTS

On April 1, 2004, the company completed the sale of its minority ownership interest in WinCo Foods, Inc., a privately-held regional grocery chain that operates stores in Idaho, Oregon, Nevada, Washington and California. The company received after-tax proceeds of approximately $150 million on the sale.

On May 3, 2004, the company utilized the proceeds from the sale of its minority interest in WinCo and additional available cash balances to voluntarily redeem $250 million of 7 ⁵/8 percent Notes due September 15, 2004, in accordance with the Note redemption provisions.

SEGMENT INFORMATION

Refer to page F-5 for the company’s segment information.

F-36

UNAUDITED QUARTERLY FINANCIAL INFORMATION

(In thousands, except per share data)

Unaudited quarterly financial information for SUPERVALU INC. and subsidiaries is as follows:

	Fiscal Year Ended February 28, 2004
	First (16 wks)		Second (12 wks)		Third (12 wks)		Fourth (13 wks)		Year (53 wks)
Net sales	$	5,836,287	$	4,590,650	$	4,738,983	$	5,043,759	$	20,209,679
Gross profit	$	800,746	$	637,248	$	645,630	$	753,626	$	2,837,250
Net earnings	$	73,670	$	62,232	$	48,616	$	95,620	$	280,138
Net earnings per common share—diluted	$	0.55	$	0.46	$	0.36	$	0.70	$	2.07
Dividends declared per common share	$	0.1425	$	0.1450	$	0.1450	$	0.1450	$	0.5775
Weighted average shares—diluted		134,118		135,546		135,862		136,548		135,418

	Fiscal Year Ended February 22, 2003
	First (16 wks)		Second (12 wks)		Third (12 wks)		Fourth (12 wks)		Year (52 wks)
Net sales	$	5,654,424	$	4,339,579	$	4,553,443	$	4,612,922	$	19,160,368
Gross profit	$	756,956	$	591,669	$	596,343	$	648,003	$	2,592,971
Net earnings	$	77,155	$	58,807	$	57,137	$	63,943	$	257,042
Net earnings per common share—diluted	$	0.57	$	0.44	$	0.43	$	0.48	$	1.91
Dividends declared per common share	$	0.1400	$	0.1425	$	0.1425	$	0.1425	$	0.5675
Weighted average shares—diluted		136,139		134,927		134,087		133,934		134,877

Note: Fiscal 2004 net earnings include after-tax restructure and other items of $9.8 million or $0.07 per diluted share. Fiscal 2003 net earnings include after-tax restructure charges of $1.8 million or $0.01 per diluted share.

F-37

SUPERVALU INC. and Subsidiaries

SCHEDULE II—Valuation and Qualifying Accounts

COLUMN A	COLUMN B		COLUMN C	COLUMN D	COLUMN E
Description	Balance at beginning of year		Additions	Deductions	Balance at end of year
Allowance for doubtful accounts:
Year ended:
February 28, 2004	$	21,913,000	8,396,000	11,778,000	$	18,531,000
February 22, 2003		22,941,000	14,768,000	15,796,000		21,913,000
February 23, 2002		22,750,000	13,536,000	13,345,000		22,941,000
Allowance for notes receivable accounts:
Year ended:
February 28, 2004	$	13,948,000	2,083,000	118,000	$	15,913,000
February 22, 2003		18,876,000	951,000	5,879,000		13,948,000
February 23, 2002		18,449,000	6,362,000	5,935,000		18,876,000
Closed properties reserves:
Year ended:
February 28, 2004	$	49,873,000	10,809,000	13,477,000	$	47,205,000
February 22, 2003		74,996,000	3,169,000	28,292,000		49,873,000
February 23, 2002		68,067,000	12,399,000	5,470,000		74,996,000

F-38

EXHIBIT INDEX

SUPERVALU INC.

ANNUAL REPORT ON FORM 10-K

Exhibit Number	Exhibit
3(i)	Restated Certificate of Incorporation.
*3(ii)	Restated Bylaws, as amended.
*4.1	Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee, relating to certain outstanding debt securities of the Registrant.
*4.2	First Supplemental Indenture dated as of August 1, 1990, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee.
*4.3	Second Supplemental Indenture dated as of October 1, 1992, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee.
*4.4	Third Supplemental Indenture dated as of September 1, 1995, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee.
*4.5	Fourth Supplemental Indenture dated as of August 4, 1999, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee.
*4.6	Fifth Supplemental Indenture dated as of September 17, 1999, between the Registrant and Bankers Trust Company, as Trustee, to Indenture dated as of July 1, 1987, between the Registrant and Bankers Trust Company, as Trustee.
*4.7	Letter of Representations dated November 12, 1992, between the Registrant, Bankers Trust Company, as Trustee, and The Depository Trust Company relating to certain outstanding debt securities of the Registrant.
*4.8	Rights Agreement dated as of April 12, 2000, between SUPERVALU INC. and Wells Fargo Bank Minnesota, N.A. (formerly Norwest Bank Minnesota, N.A.) as Rights Agent, including as Exhibit B the forms of Rights Certificate and Election to Exercise.
*4.9	Indenture dated as of November 2, 2001, between SUPERVALU INC. and The Chase Manhattan Bank, as Trustee, including form of Liquid Yield Option™ Note due 2031 (Zero Coupon—Senior).
*4.10	Registration Rights Agreement dated as of November 2, 2001, by and among SUPERVALU INC., Merrill Lynch & Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
*4.11	Form of Credit Agreement, dated as of October 8, 1997, as amended and restated as of August 16, 2001, among the Registrant, the Lenders named therein, the Chase Manhattan Bank, as Agent, and Bank One, NA, as Syndication Agent.
*10.1	SUPERVALU INC. 2002 Stock Plan, as amended.
*10.2	SUPERVALU INC. 1997 Stock Plan, as amended.
*10.3	SUPERVALU INC. 1993 Stock Plan, as amended.
*10.4	SUPERVALU/Richfood Stock Incentive Plan, as amended.

Exhibit Number	Exhibit
*10.5	Resolutions of SUPERVALU INC. Board of Directors, amending the SUPERVALU INC. Restricted Stock Plan, as amended.
*10.6	SUPERVALU INC. 1983 Employee Stock Option Plan, as amended.
*10.7	SUPERVALU INC. 1989 Stock Appreciation Rights Plan.
*10.8	SUPERVALU INC. Executive Incentive Bonus Plan.
*10.9	SUPERVALU INC. Annual Cash Bonus Plan for Designated Corporate Officers, as amended.
*10.10	SUPERVALU INC. Long-Term Incentive Plan.
*10.11	SUPERVALU INC. Deferred Compensation Plan for Non-Employee Directors, as amended.
*10.12	SUPERVALU INC. ERISA Excess Benefit Plan Restatement, as amended.
*10.13	SUPERVALU INC. Deferred Compensation Plan as amended.
*10.14	SUPERVALU INC. Executive Deferred Compensation Plan, as amended, and Executive Deferred Compensation Plan II.
*10.15	Amendments to the SUPERVALU INC. Executive Deferred Compensation Plan and the SUPERVALU INC. Executive Deferred Compensation Plan II.
*10.16	Form of Agreement used in connection with the Registrant’s Executive Post-Retirement Survivor Benefit Program.
*10.17	Form of Change of Control Severance Agreements entered into with certain officers of the Registrant.
*10.18	SUPERVALU INC. Directors Retirement Program, as amended.
*10.19	SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan.
*10.20	First Amendment to SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan.
*10.21	Second Amendment to SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan.
*10.22	Third Amendment to SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan.
*10.23	Fourth Amendment to SUPERVALU INC. Non-Qualified Supplemental Executive Retirement Plan.
*10.24	SUPERVALU INC. Non-Employee Directors Deferred Stock Plan.
10.25	Restricted Stock Unit Award Agreement for David L. Boehnen, as amended.
10.26	Restricted Stock Unit Award Agreement for Pamela K. Knous, as amended.
10.27	Restricted Stock Unit Award Agreement for John H. Hooley.
10.28	Restricted Stock Unit Award Agreement for Michael L. Jackson.
*10.29	Restricted Stock Unit Award Agreement for Jeffrey Noddle.
*10.30	Amended and Restated SUPERVALU INC. Grantor Trust dated as of May 1, 2002.

Exhibit Number	Exhibit
12.1	Ratio of Earnings to Fixed Charges.
21.1	SUPERVALU INC. Subsidiaries.
23.1	Consent of KPMG LLP.
24.1	Power of Attorney.
(31)	Rule 13a-14(a)/15d-14(a) Certifications
	31.1	Chief Executive Officer Certification of Periodic Financial Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Chief Financial Officer Certification of Periodic Financial Report pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32)	Section 1350 Certifications
	32.1	Chief Executive Officer Certification of Periodic Financial Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	Chief Financial Officer Certification of Periodic Financial Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Incorporated by Reference

EX-3.(I)

Exhibit (3)(i)

RESTATED CERTIFICATE OF INCORPORATION

OF

SUPERVALU INC.

SUPERVALU INC., a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:

(1) The name under which the corporation was originally incorporated is Winston and Newell Co. by the filing of its original Certificate of Incorporation with the Secretary of State of the State of Delaware on December 28, 1925.

(2) This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the currently existing Restated Certificate of Incorporation of this corporation as heretofore amended or supplemented and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.

(3) This Restated Certificate of Incorporation was duly adopted by the Board of Directors of this corporation in accordance with Section 245 of the General Corporation Law of the State of Delaware.

(4) The text of the Restated Certificate of Incorporation as amended or supplemented heretofore is hereby restated without further amendments or changes to read as herein set forth in full:

ARTICLE FIRST. The name of this Corporation is SUPERVALU INC.

ARTICLE SECOND. Its registered office in the State of Delaware is to be located at 1209 Orange Street in the City of Wilmington, County of New Castle, and the name and address of its registered agent at such address is The Corporation Trust Company.

ARTICLE THIRD. The purpose of the Corporation is to engage in any lawful act or activity which corporations may be organized under the General Corporation Law of the State of Delaware.

ARTICLE FOURTH. Section 1. Authorized Classes of Stock. That the total number of shares of stock which this Corporation is authorized to issue is 401,000,000 shares, of which 400,000,000 shares of the par value of $1.00 per share are designated Common Stock and 1,000,000 shares of no par value are designated Preferred Stock (herein referred to as “Preferred Stock”). Shares of any class of stock of the Corporation may be issued for such consideration and for such corporate purposes as the Board of Directors may from time to time determine.

Section 2. Description of capital stock. The following is a description of each of the classes of capital stock which the Corporation has authority to issue with the designations, preferences, voting powers and participating, optional or other special rights and the qualifications, limitations or restrictions thereof.

1

PREFERRED STOCK

A. Rights and Restrictions of Preferred Stock. Authority is hereby expressly vested in the Board of Directors of the Corporation, subject to the provisions of this Article Fourth and to the limitations prescribed by law, to authorize the issue from time to time of one or more series of Preferred Stock and with respect to each such series to fix by resolution or resolutions adopted by the affirmative vote of a majority of the whole Board of Directors providing for the issue of such series the voting powers, full or limited, if any, of the shares of such series and the designations, preferences and relative, participating, optional or other special rights and the qualifications, limitations or restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, the determination or fixing of the following:

(1) The number of shares constituting such series and the designation of such series.

(2) The dividend rate of such series, the conditions and dates upon which such dividends shall be payable, the relation which such dividends shall bear to the dividends payable on any other class or classes or series of the Corporation’s capital stock, and whether such dividends shall be cumulative or noncumulative.

(3) Whether the shares of such series shall be subject to redemption by the Corporation at the option of either the Corporation or the holder or both or upon the happening of a specified event, and, if made subject to any such redemption, the times or events, prices and other terms and conditions of such redemption.

(4) The terms and amount of any sinking fund provided for the purchase or redemption of the shares of such series.

(5) Whether or not the shares of such series shall be convertible into, or exchangeable for, at the option of either the holder or the Corporation or upon the happening of a specified event, shares of any other class or classes or of any other series of the same or any other class or classes of the Corporation’s capital stock, and, if provision be made for conversion or exchange, the times or events, prices, rates, adjustments, and other terms and conditions of such conversions or exchanges.

(6) The restrictions, if any, on the issue or reissue of any additional Preferred Stock, including increases or decreases in the number of shares of any series subsequent to the issue of shares of that series.

(7) The rights of the holders of the shares of such series upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation.

(8) Any right to vote with holders of shares of any other series or class and any right to vote as a class, either generally or as a condition to specified corporate action, in addition to any voting powers required by law.

Attached hereto as Exhibit A is the Certificate of Designations of Series A Junior Participating Preferred Stock authorized by the Board of Directors on April 12, 2000. Attached hereto as Exhibit B is the Certificate of Designations of 4.50% Preferred Stock authorized by the Board of Directors on February 14, 1994.

2

COMMON STOCK

B. Rights and Restrictions of Common Stock. The holders of the Common Stock shall have and possess all rights as stockholders of the Corporation, except as such rights may be limited by the preferences, rights, limitations and restrictions of the Preferred Stock. Subject to provisions of a resolution or resolutions of the Board of Directors establishing a series of Preferred Stock, dividends may be declared by the Board of Directors and paid from time to time out of any funds legally available there for. In the event of any dissolution, liquidation or winding up of the affairs of the Corporation, all assets and funds of the Corporation remaining after paying all amounts payable to the holders of Preferred Stock, as provided by a resolution or resolutions of the Board of Directors establishing a series of Preferred Stock, shall be distributed to the holders of Common Stock ratably according to the number of shares of Common Stock held.

OTHER PROVISIONS

C. Preemptive Rights. No holders of shares of any class or series of this Corporation shall have any preemptive rights to subscribe for any shares of any class or series of stock of this Corporation, whether now or hereafter authorized, or for any obligations convertible into shares of any class or series of stock of this Corporation, whether now or hereafter authorized.

D. Voting by Classes. Except as otherwise required by law or by the provisions of a resolution or resolutions of the Board of Directors establishing a series of Preferred Stock, all matters shall be voted upon without distinction as to classes or series of stock.

ARTICLE FIFTH. In furtherance, and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized:

(a) To make, amend, alter, change, add to or repeal Bylaws of this Corporation, without any action on the part of the stockholders. The Bylaws made by the directors may be amended, altered, changed, added to or repealed by the stockholders. Any specific provision in the Bylaws regarding amendment thereof shall be controlling.

(b) By resolution passed by a majority of the whole board, to designate two or more directors to constitute an Executive Committee, which committee shall have and exercise (except when the Board of Directors shall be in session) such powers and rights of the Board of Directors in the management of the business and affairs of this Corporation as may be provided in the Bylaws or in said resolution, and shall have power to authorize the seal of this Corporation to be affixed to all papers which may require it.

ARTICLE SIXTH. Section 1. Special Vote for Certain Combinations. Except as otherwise expressly provided in Section 2 of this Article:

(i) any merger or consolidation of the Corporation with or into any other corporation;

(ii) any sale, lease, exchange or other disposition of all or any substantial part of the assets of the Corporation to or with any other corporation, person or other entity;

3

(iii) the issuance or transfer of any securities of the Corporation to any other corporation, person or other entity in exchange for assets or securities or a combination thereof (except assets or securities or a combination thereof so acquired in a single transaction or a series of related transactions having an aggregate fair market value of less than $5,000,000); or

(iv) the issuance or transfer of any securities of the Corporation to any other corporation, person or other entity for cash,

shall require the affirmative vote of the holders of

(a) at least 75% of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, considered for the purposes of this Article as one class, and

(b) at least a majority of the outstanding shares of capital stock of the Corporation which are not beneficially owned by such corporation, person or other entity,

if, as of the record date for the determination of stockholders entitled to notice thereof and to vote thereon, such other corporation, person or entity is the beneficial owner, directly or indirectly, of 5% or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, considered for the purposes of this Article as one class. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that some lesser percentage may be specified by law or in any agreement with any national securities exchange.

Section 2. Special Vote Not Required. The provisions of this Article shall not apply to any transaction described in clauses (i), (ii), (iii) or (iv) of Section 1 of this Article, (i) with another corporation if a majority, by vote, of the outstanding shares of all classes of capital stock of such other corporation entitled to vote generally in the election of directors, considered for this purpose as one class is owned of record or beneficially by the Corporation and/or its subsidiaries; or (ii) with another corporation, person or other entity if the Board of Directors of the Corporation shall by resolution have approved a memorandum of understanding with such other corporation, person or other entity with respect to and substantially consistent with such transaction prior to the time such other corporation, person or other entity became the beneficial owner, directly or indirectly, of 5% or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors.

Section 3. Beneficial Ownership. For the purposes of this Article, a corporation, person or other entity shall be deemed to be the beneficial owner of any shares of capital stock of the Corporation (i) which it has the right to acquire pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise, or (ii) which are beneficially owned, directly or indirectly (including shares deemed owned through application of clause (i) above), by any other corporation, person or other entity (a) with which it or its “affiliate” or “associate” (as defined below) has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of capital stock of the Corporation or (b) which is its “affiliate” or “associate” as those terms were defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934 as in effect on May 1, 1976. For the purposes of this Article, the outstanding shares of any class of capital stock of the Corporation shall include shares deemed owned through the application of clauses (i) and (ii) of this Section 3 but shall not include any other shares which may be issuable pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise.

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Section 4. Determination by Board of Directors. The Board of Directors of the Corporation shall have the power and duty to determine for the purposes of this Article, on the basis of information then known to it, whether (i) any corporation, person, or other entity beneficially owns, directly or indirectly, 5% or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, or is an “affiliate” or an “associate” (as defined above) of another, (ii) any proposed sale, lease, exchange or other disposition of part of the assets of the Corporation involves a substantial part of the assets of the Corporation, (iii) assets or securities, or a combination thereof, to be acquired in exchange for securities of the Corporation, have an aggregate fair market value of less than $5,000,000 and whether the same are proposed to be acquired in a single transaction or a series of related transactions, and (iv) the memorandum of understanding referred to above is substantially consistent with the transaction to which it relates. Any such determination by the Board shall be conclusive and binding for all purposes of this Article.

Section 5. Amendment. Notwithstanding any other provision of this Certificate of Incorporation, or the Bylaws (and in addition to any other vote that may be required by law, this Certificate of Incorporation or the Bylaws), there shall be required to amend, alter, change, or repeal, directly or indirectly, this Article Sixth the affirmative vote of (i) at least 75% of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class) and (ii) at least a majority of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class), exclusive of all voting stock of the Corporation beneficially owned, directly or indirectly, by any corporation, person or entity which is, as of the record date for the determination of stockholders entitled to notice of such amendment, alteration, change or repeal and to vote thereon, the beneficial owner, directly or indirectly, of 5% or more of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (considered for this purpose as one class).

ARTICLE SEVENTH. The Corporation shall have the right, subject to any express provisions or restrictions contained in the Certificate of Incorporation or the Bylaws, from time to time to amend the Certificate of Incorporation or any provision thereof in any manner now or hereafter provided by law.

ARTICLE EIGHTH. A director of this Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided, however, that this Article Eighth shall not eliminate or limit the liability of a director to the extent provided by applicable law (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under section 174 of the General Corporation Law of the State of Delaware; (iv) for any transaction from which the director derived an improper personal benefit; or (v) for any act or omission occurring prior to the date when this Article Eighth became effective. Any repeal or modification of the foregoing provisions of this Article Eighth by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification.

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IN WITNESS WHEREOF, this Restated Certificate of Incorporation is executed on behalf of the Company by one of its duly authorized officers and attested by its Corporate Secretary this 20th day of April, 2004.

SUPERVALU INC.
By:	/s/ Stephen P. Kilgriff
Name:	Stephen P. Kilgriff
Title:	Vice President, Legal

ATTEST:
By:	/s/ John P. Breedlove
Name:	John P. Breedlove
Title:	Corporate Secretary

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EXHIBIT A

CERTIFICATE OF DESIGNATIONS

OF

SERIES A JUNIOR PARTICIPATING PREFFERRED STOCK

OF

SUPERVALU INC.

Pursuant to Section 151 of the Delaware

General Corporation Law

SUPERVALU INC., a corporation organized and existing under the Delaware General Corporation Law (the “Company”), in accordance with the provisions of Section 151 of such law, DOES HEREBY CERTIFY that pursuant to authority conferred on the Board of Directors of the Company by its Restated Certificate of Incorporation and the provisions of Section 151(g) of the General Corporation Law of the State of Delaware, the Board of Directors on April 12, 2000 adopted the following resolution:

RESOLVED, that pursuant to the authority vested in the Board of Directors of the Company in accordance with the provisions of its Restated Certificate of Incorporation, a series of Preferred Stock, no par value, of the Company be, and hereby is, created and that the designation and amount thereof and the voting powers, preferences and relative, participating, optional or other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows:

Section 1. Designation and Amount. The shares of such series shall be designated as “Series A Junior Participating Preferred Stock” (the “Series A Preferred Stock”) and the number of shares constituting such series shall be 150,000.

Section 2. Dividends and Distributions.

(A) Subject to the provisions for adjustment hereinafter set forth, the holders of shares of Series A Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, (i) cash dividends in an amount per share (rounded to the nearest cent) equal to 1000 times the aggregate per share amount of all cash dividends declared or paid on the Common Stock, $1.00 par value per share, of the Company (the “Common Stock”) and (ii) a preferential cash dividend (the “Preferential Dividends”), if any, in preference to the holders of Common Stock, on the first day of February, May, August and November of each year (each a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, payable in an amount (except in the case of the first Quarterly Dividend Payment if the date of the first issuance of Series A Preferred Stock is a date other than a Quarterly Dividend Payment date, in which case such payment shall be a prorated amount of such amount) equal to $50 per share of Series A Preferred Stock less the per share amount of all cash dividends declared on the Series A Preferred Stock pursuant to clause (i) of this sentence since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Company shall, at any time after the issuance of any share or fraction of a share of Series A Preferred Stock, make any distribution on the shares of Common Stock of the Company, whether by way of a dividend or a reclassification of stock, a recapitalization, reorganization or partial liquidation of the Company or otherwise, which is payable in cash or any debt security, debt instrument, real or personal

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property or any other property (other than cash dividends subject to the immediately preceding sentence, a distribution of shares of Common Stock or other capital stock of the Company or a distribution of rights or warrants to acquire any such share, including any debt security convertible into or exchangeable for any such share, at a price less than the Fair Market Value (as hereinafter defined) of such share), then, and in each such event, the Company shall simultaneously pay on each then outstanding share of Series A Preferred Stock of the Company a distribution, in like kind, of 1000 times such distribution paid on a share of Common Stock (subject to the provisions for adjustment hereinafter set forth). The dividends and distributions on the Series A Preferred Stock to which holders thereof are entitled pursuant to clause (i) of the first sentence of this paragraph and pursuant to the second sentence of this paragraph are hereinafter referred to as “Dividends” and the multiple of such cash and non-cash dividends on the Common Stock applicable to the determination of the Dividends, which shall be 1,000 initially but shall be adjusted from time to time as hereinafter provided, is hereinafter referred to as the “Dividend Multiple.” In the event the Company shall at any time after April 24, 2000 (“the Effective Date”) (i) declare or pay any dividend or make any distribution on Common Stock payable in shares of Common Stock, (ii) effect a subdivision or split or a combination, consolidation or reverse split of the outstanding shares of Common Stock into a greater or lesser number of shares of Common Stock, or (iii) issue any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving Company), then in each such case the Dividend Multiple thereafter applicable to the determination of amount of Dividends which holders of shares of Series A Preferred Stock shall be entitled to receive shall be the Dividend Multiple applicable immediately prior to such event multiplied by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(B) The Company shall declare each Dividend at the same time it declares any cash or non-cash dividend or distribution on the Common Stock in respect of which a Dividend is required to be paid. No cash or non-cash dividend or distribution on the Common Stock in respect of which a Dividend is required to be paid shall be paid or set aside for payment on the Common Stock unless a Dividend in respect of such dividend or distribution on the Common Stock shall be simultaneously paid, or set aside for payment, on the Series A Preferred Stock.

(C) Preferential Dividends shall begin to accrue on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issuance of any Shares of Series A Preferred Stock. Accrued but unpaid Preferential Dividends shall cumulate but shall not bear interest. Preferential Dividends paid an the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata, on a share-by-share basis among all such shares at the time outstanding.

Section 3. Voting Rights. The holders of shares of Series A Preferred Stock shall have the following voting rights:

(A) Subject to the provisions for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the holders of the Common Stock. The number of votes which a holder of Series A Preferred Stock is entitled to cast, as the same may be adjusted from time to time as hereinafter provided, is hereinafter referred to as the “Vote Multiple.” In the event the Company shall at any time after the Effective Date, (i) declare or pay any dividend on Common Stock payable in shares of Common Stock, (ii) effect a subdivision or split or a combination, consolidation or reverse split of the outstanding shares of Common Stock into a greater or lesser number of shares of Common Stock, or (iii) issue any shares of its capital stock in a reclassification of the

2

Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving Company), then in each such case the Vote Multiple thereafter applicable to the determination of the number of votes per share to which holders of shares of Series A Preferred Stock shall be entitled after such event shall be the Vote Multiple immediately prior to such event multiplied by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(B) Except as otherwise provided herein, in the Restated Certificate of Incorporation or Restated Bylaws, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Company.

(C) In the event that the Preferential Dividends accrued on the Series A Preferred Stock for four or more consecutive quarterly periods shall not have been declared and paid or set apart for payment, the holders of record of the Series A Preferred Stock, voting together with the holders of record of any other series of preferred stock of the Company which shall then have the right, expressly granted by the Certificate of Incorporation of the Company or in any resolution or resolutions of the Board of Directors of the Company providing for the issue of such shares of preferred stock, to elect directors upon such a default in the payment of dividends by the Company shall have the right, at the next meeting of stockholders called for the election of directors, voting together as a class, to elect two members to the Board of Directors, which directors shall be in addition to the number provided for pursuant to the Company’s Bylaws prior to such event, to serve until the next Annual Meeting and until their successors are elected and qualified or their earlier resignation, removal or incapacity or until such earlier time as all accrued and unpaid Preferential Dividends upon the outstanding shares of Series A Preferred Stock shall have been paid (or set aside for payment) in full. The holders of shares of Series A Preferred Stock shall continue to have the right to elect directors as provided by the immediately preceding sentence until all accrued and unpaid Preferential Dividends upon the outstanding shares of Series A Preferred Stock shall have been paid (or set aside for payment) in full. Such directors may be removed and replaced by such stockholders, and vacancies in such directorships may be filled only by such stockholders (or by the remaining director elected by such stockholders, if there be one) in the manner permitted by law. Subject to the foregoing, any directors elected pursuant to this paragraph 3(C) shall be elected annually and shall not constitute members of any Class of directors as contemplated by Section 3.02 of the Company’s Restated Bylaws.

(D) Except as otherwise required by the Certificate of Incorporation or Bylaws or set forth herein, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for the taking of any corporate action.

Section 4. Certain Restrictions.

(A) Whenever Preferential Dividends or Dividends are in arrears or the Company shall be in default of payment thereof, thereafter and until all accrued and unpaid Preferential Dividends and Dividends, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid or set irrevocably aside for payment in full, and in addition to any and all other rights which any holder of shares of Series A Preferred Stock may have in such circumstances, the Company shall not

(i) declare or pay dividends on, make any other distributions on or redeem or purchase or otherwise acquire for consideration, any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock;

3

(ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity as to dividends with the Series A Preferred Stock, unless dividends are paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

(iii) except as permitted by subparagraph (iv) of this paragraph 4(A), redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, provided that the Company may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Company ranking junior (both as to dividends and upon liquidation, dissolution or winding up) to the Series A Preferred Stock; or

(iv) purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock (either as to dividends or upon liquidation, dissolution or winding up), except in accordance with a purchase offer made to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

(B) The Company shall not permit any Subsidiary (as hereinafter defined) of the Company to purchase or otherwise acquire for consideration any shares of stock of the Company unless the Company could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner. A “Subsidiary” of the Company shall mean any Company or other entity of which securities or other ownership interests having ordinary voting power sufficient to elect a majority of the board of directors of such Company or other entity or other persons performing similar functions are beneficially owned, directly or indirectly, by the Company or by any Company or other entity that is otherwise controlled by the Company.

(C) The Company shall not issue any shares of Series A Preferred Stock except upon exercise of Rights issued pursuant to that certain Rights Agreement dated as of April 12, 2000 between the Company and Norwest Bank Minnesota, N.A., as Rights Agent, a copy of which is on file with the Secretary of the Company at its principal executive office and shall be made available to stockholders of record without charge upon written request therefor addressed to said Secretary. Notwithstanding the foregoing sentence, nothing contained in the provisions hereof shall prohibit or restrict the Company from issuing for any purpose any series of Preferred Stock with rights and privileges similar to, different from, or greater than, those of the Series A Preferred Stock.

Section 5. Reacquired Shares. Any shares of Series A Preferred Stock purchased or otherwise acquired by the Company in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares upon their retirement and cancellation shall become authorized but unissued shares of Preferred Stock, without designation as to series, and such shares may be reissued as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors.

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Section 6. Liquidation, Dissolution or Winding Up. Upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, no distribution shall be made (i) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless the holders of shares of Series A Preferred Stock have received, subject to adjustment as hereinafter provided, (A) $1.00 per one one-thousandth (1/1000) of a share plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment or, (B) if greater than the amount specified in clause (i)(A) of this sentence, an amount equal to 1,000 times the aggregate amount to be distributed per share to holders of Common Stock, as the same may be adjusted as hereinafter provided and (ii) to the holders of stock ranking on a parity upon liquidation, dissolution or winding up with the Series A Preferred Stock, unless simultaneously therewith distributions are made ratably on the Series A Preferred Stock and all other shares of such parity stock in proportion to the total amounts to which the holders of shares of Series A Preferred Stock are entitled under clause (i)(A) of this sentence and to which the holders of such parity shares are entitled, in each case upon such liquidation, dissolution or winding up. The amount to which holders of Series A Preferred Stock may be entitled upon liquidation, dissolution or winding up of the Company pursuant to clause (i)(B) of the foregoing sentence is hereinafter referred to as the “Participating Liquidation Amount” and the multiple of the amount to be distributed to holders of shares of Common Stock upon the liquidation, dissolution or winding up of the Company applicable pursuant to said clause to the determination of the Participating Liquidation Amount, as said multiple may be adjusted from time to time as hereinafter provided, is hereinafter referred to as the “Liquidation Multiple.” In the event the Company shall at any time after the Effective Date (i) declare or pay any dividend an Common Stock payable in shares of Common Stock, (ii) effect a subdivision or split or a combination, consolidation or reverse split of the outstanding shares of Common Stock into a greater or lesser number of shares of Common Stock, or (iii) issue any shares of its capital stock in a reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is continuing or surviving Company), then, in each such case, the Liquidation Multiple thereafter applicable to the determination of the Participating Liquidation Amount to which holders of Series A Preferred Stock shall be entitled after such event shall be the Liquidation Multiple applicable immediately prior to such event multiplied by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

Section 7. Certain Reclassification and Other Events.

(A) In the event that holders of shares of Common Stock of the Company receive after the Effective Date in respect of their shares of Common Stock any share of capital stock of the Company (other than any share of Common Stock of the Company), whether by way of reclassification, recapitalization, reorganization, dividend or other distribution or otherwise (a “Transaction”), then, and in each such event, the dividend rights, voting rights and rights upon the liquidation, dissolution or winding up of the Company of the shares of Series A Preferred Stock shall be adjusted so that after such event the holders of Series A Preferred Stock shall be entitled, in respect of each share of Series A Preferred Stock held, in addition to such rights in respect thereof to which such holder was entitled immediately prior to such adjustment, to (i) such additional dividends as equal the Dividend Multiple in effect immediately prior to such Transaction multiplied by the additional dividends which the holder of a share of Common Stock shall be entitled to receive by virtue of the receipt in the Transaction of such capital stock, (ii) such additional voting rights as equal the Vote Multiple in effect immediately prior to such Transaction multiplied by the additional voting rights which the holder of a share of Common

5

Stock shall be entitled to receive by virtue of the receipt in the Transaction of such capital stock and (iii) such additional distributions upon liquidation, dissolution or winding up of the Company as equal the Liquidation Multiple in effect immediately prior to such Transaction multiplied by the additional amount which the holder of a share of Common Stock shall be entitled to receive upon liquidation, dissolution or winding up of the Company by virtue of the receipt in the Transaction of such capital stock, as the case may be, all as provided by the terms of such capital stock.

(B) In the event that holders of shares of Common Stock of the Company receive after the Effective Date in respect of their shares of Common Stock any right or warrant to purchase Common Stock (including as such a right, for all purposes of this paragraph, any security convertible into or exchangeable for Common Stock) at a purchase price per share less than the Fair Market Value of a share of Common Stock on the date of issuance of such right or warrant, then and in each such event the dividend rights, voting rights and rights upon the liquidation, dissolution or winding up of the Company of the shares of Series A Preferred Stock shall each be adjusted so that after such event the Dividend Multiple, the Vote Multiple and the Liquidation Multiple shall each be the product of the Dividend Multiple, the Vote Multiple and the Liquidation Multiple, as the case may be, in effect immediately prior to such event multiplied by a fraction the numerator of which shall be the number of shares of Common Stock outstanding immediately before such issuance of rights or warrants plus the maximum number of shares of Common Stock which could be acquired upon exercise in full of all such rights or warrants and the denominator of which shall be the number of shares of Common Stock outstanding immediately before such issuance of rights or warrants plus the number of shares of Common Stock which could be purchased, at the Fair Market Value of the Common Stock at the time of such issuance, by the maximum aggregate consideration payable upon exercise in full of all such rights or warrants.

(C) In the event that holders of shares of Common Stock of the Company receive after the Effective Date in respect of their shares of Common Stock any right or warrant to purchase capital stock of the Company (other than shares of Common Stock), including as such a right for all purposes of this paragraph, any security convertible into or exchangeable for capital stock of the Company (other than Common Stock), at a purchase price per share less than the Fair Market Value of such shares of capital stock on the date of issuance of such right or warrant, then and in each such event the dividend rights, voting rights and rights upon liquidation, dissolution or winding up of the Company of the shares of Series A Preferred Stock shall each be adjusted so that after such event each holder of a share of Series A Preferred Stock shall be entitled, in respect of each share of Series A Preferred Stock held, in addition to such rights in respect thereof to which such holder was entitled immediately prior to such event, to receive (i) such additional dividends as equal the Dividend Multiple in effect immediately prior to such event multiplied, first, by the additional dividends to which the holder of a share of Common Stock be entitled upon exercise of such right or warrant by virtue of the capital stock which could be acquired upon such exercise and multiplied again by the Discount Fraction (as hereinafter defined) and (ii) such additional voting rights as equal the Vote Multiple in effect immediately prior to such event multiplied, first, by the additional voting rights to which the holder of a share of Common Stock shall be entitled upon exercise of such right or warrant by virtue of the capital stock which could be acquired upon such exercise and multiplied again by the Discount Fraction and (iii) such additional distributions upon liquidation, dissolution or winding up of the Company as equal the Liquidation Multiple in effect immediately prior to such event multiplied, first, by the additional amount which the holder of a share of Common Stock shall be entitled to receive upon liquidation, dissolution or winding up of the Company upon exercise of such right or warrant by virtue of the capital stock which could be acquired upon such exercise and multiplied again by the Discount Fraction. For purposes of this paragraph, the “Discount Fraction” shall be a fraction the numerator of which shall be the difference between the Fair Market Value of a share of the capital stock subject to a right or warrant

6

distributed to holders of shares of Common Stock of the Company as contemplated by this paragraph immediately after the distribution thereof and the purchase price per share for such share of capital stock pursuant to such right or warrant and the denominator of which shall be the Fair Market Value of a share of such capital stock immediately after the distribution of such right or warrant.

(D) For purposes of this Certificate of Designations, the “Fair Market Value” of a share of capital stock of the Company (including a share of Common Stock) on any date shall be deemed to be the average of the daily closing price per share thereof over the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; provided, however, that, in the event that such Fair Market Value of any such share of capital stock is determined during a period which includes any date that is within 30 Trading Days after (i) the ex-dividend date for a dividend or distribution on stock payable in shares of such stock or securities convertible into shares of such stock, or (ii) the effective date of any subdivision, split, combination, consolidation, reverse stock split or reclassification of such stock, then, and in each such case, the Fair Market Value shall be appropriately adjusted by the Board of Directors of the Company to take into account ex-dividend or post-effective date trading. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way (in either case, as reported in the applicable transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange), or, if the shares are not listed or admitted to trading on the New York Stock Exchange, as reported in the applicable transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares are listed or admitted to trading or, if the shares are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System (“NASDAQ”) or such other system then in use, or if on any such date the shares are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the shares selected by the Board of Directors of the Company. The term “Trading Day” shall mean a day on which the principal national securities exchange on which the shares are listed or admitted to trading is open for the transaction of business or, if the shares are not listed or admitted to trading on any national securities exchange, on which the New York Stock Exchange or such other national securities exchange as may be selected by the Board of Directors of the Company is open. If the shares are not publicly held or not so listed or traded on any day within the period of 30 Trading Days applicable to the determination of Fair Market Value thereof as aforesaid, “Fair Market Value” shall mean the fair market value thereof per share as determined in good faith by the Board of Directors of the Company. In either case referred to in the foregoing sentence, the determination of Fair Market Value shall be described in a statement filed with the Secretary of the Company.

Section 8. Consolidation, Merger, etc. In case the Company shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each outstanding share of Series A Preferred Stock shall at the same time be similarly exchanged for or changed into the aggregate amount of stock, securities, cash and/or other property (payable in like kind), as the case may be, for which or into which each share of Common Stock is changed or exchanged multiplied by the highest of the Vote Multiple, the Dividend Multiple or the Liquidation Multiple in effect immediately prior to such event.

Section 9. Effective Time of Adjustments.

(A) Adjustments to the Series A Preferred Stock required by the provisions hereof shall be effective as of the time at which the event requiring such adjustments occurs.

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(B) The Company shall give prompt written notice to each holder of a share of Series A Preferred Stock of the effect of any adjustment to the voting rights, dividend rights or rights upon liquidation, dilution or winding up of the Company of such shares required by the provisions hereof. Notwithstanding the foregoing sentence, the failure of the Company to give such notice shall not affect the validity of or the force or effect of or the requirement for such adjustment.

Section 10. No Redemption. The shares of Series A Preferred Stock shall not be redeemable at the option of the Company or any holder thereof. Notwithstanding the foregoing sentence of this Section, the Company may acquire shares of Series A Preferred Stock in any other manner permitted by law, the provisions hereof and the Certificate of Incorporation of the Company.

Section 11. Ranking. Unless otherwise provided in the Certificate of Incorporation of the Company or a Certification of Designations relating to a subsequent series of preferred stock of the Company, the Series A Preferred Stock shall rank junior to all other series of the Company’s preferred stock as to the payment of dividends and the distribution of assets on liquidation, dissolution, or winding up and senior to the Common Stock.

Section 12. Amendment. After the Distribution Date (as defined in the Rights Agreement), the provisions hereof and the Certificate of Incorporation of the Company shall not be amended in any manner which would adversely affect the rights, privileges or powers of the Series A Preferred Stock without, in addition to any other vote of stockholders required by law, the affirmative vote of the holders of two-thirds or more of the outstanding shares of Series A Preferred Stock, voting together as a single class.

IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Company by one of its duly authorized officers and attested by its Secretary this 14th day of April, 2000.

/s/ Pamela K. Knous

Name: Pamela K. Knous

Title: Executive Vice President and CFO

ATTEST:

/s/ John P. Breedlove

Name: John P. Breedlove, Esq.

Title: Secretary

8

EXHIBIT B

CERTIFICATE OF DESIGNATIONS

of

4.50% PREFERRED STOCK

of

SUPERVALU INC.

(Pursuant to Section 151 of the

Delaware General Corporation Law)

SUPERVALU INC., a corporation organized and existing under the General Corporation Law of the State of Delaware (hereinafter called the “Corporation”), hereby certifies that the following resolution was duly adopted by the Pricing Committee (the “Committee”) of the Board of Directors of the Corporation as required by Section 151 of the General Corporation Law by a written action dated February 14, 1994:

RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of this Corporation (hereinafter called the “Board of Directors”) in accordance with the provisions of the Certificate of Incorporation of the Corporation (hereinafter, as amended and restated to date, called the “Certificate of Incorporation”), and pursuant to the authority granted to and vested in the Committee by the Board of Directors at a meeting duly held on December 15, 1993, the Committee hereby creates a series of Preferred Stock, no par value (the “Preferred Stock”), of the Corporation and hereby states the designation and number of shares, and fixes the relative rights, preferences, and limitations thereof as follows:

Section 1. Designation and Amount. The shares of such series shall be designated as “4.50% Preferred Stock” (hereinafter called this “Series”) and the number of shares constituting this Series shall be 6,000. Such number of shares may be increased or decreased by resolution of the Board of Directors, the Committee or any duly authorized committee of the Board of Directors; provided, that no decrease shall reduce the number of shares of this Series to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into shares of this Series.

Section 2. Dividends.

(A) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior to this Series with respect to dividends, the holders of shares of this Series, in preference to the holders of Common Stock, par value $1.00 per share (the “Common Stock”), of the Corporation, and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the fifteenth day of March, June, September and December in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of shares of this Series, in an amount per share equal to $45.00 per annum. The amount of the dividend for any period less than a full quarter shall be computed on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed in the period.

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(B) Dividends shall begin to accrue and be cumulative on outstanding shares of this Series from the date of original issue of such shares. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of this Series in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors or a duly authorized committee of the Board of Directors may fix a record date for the determination of holders of shares of this Series entitled to receive payment of a dividend declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof.

(C) Dividends payable on shares of this Series are subject in certain circumstances, to the Corporation’s right of offset as set forth in that certain Agreement and Plans of Reorganization dated February 14, 1994 (the “Agreement”) by and among the Corporation, Clyde Evans Markets, Inc. and the shareholders of Clyde Evans Markets, Inc.; a copy of which is on file at the principal executive offices of the Corporation, and any dividends so set-off by the Corporation shall not be deemed to be in arrears.

Section 3. Voting Rights. The holders of shares of this Series shall have the following voting rights:

(A) Each share of this Series shall entitle the holder thereof to one vote on all matters submitted to a vote of the stockholders of the Corporation.

(B) Except as otherwise provided herein, in any other Certificate of Designations creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of this Series and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.

(C) Except as set forth herein, or as otherwise provided by law, holders of this Series shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

Section 4. Certain Restrictions.

(A) Whenever quarterly dividends payable on this Series as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends, whether or not declared, on shares of this Series outstanding shall have been paid in full, the Corporation shall not:

(i) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to this Series;

(ii) declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with this Series, except dividends paid ratably on this Series and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to this Series, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to this Series; or

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(iv) redeem or purchase or otherwise acquire for consideration any shares of this Series, or any shares of stock ranking on a parity with this Series, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors or a duly authorized committee of the Board of Directors) to all holders of such shares upon such terms as the Board of Directors or a duly authorized committee of the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.

Section 5. Reacquired Shares. Any shares of this Series redeemed, purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation, or in any other Certificate of Designations creating a series of Preferred Stock or any similar stock or as otherwise required by law.

Section 6. Liquidation, Dissolution or Winding-Up. Upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, no distribution shall be made (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to this Series unless, prior thereto, the holders of shares of this Series shall have received $1,000.00 per share, plus an amount equal to accrued and unpaid dividends thereon, whether or not declared, to the date of such payment, or (2) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with this Series, except distributions made ratably on this Series and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. For the purposes of this Section 6, a voluntary or involuntary liquidation, dissolution or winding up of the Corporation shall not include the consolidation or merger of the Corporation with or into any other corporation, or a merger of another corporation with or into the Corporation, or any sale, lease or conveyance of all or any part of the property or business of the Corporation.

Section 7. Redemption at the Option of the Corporation.

(A) The shares of this Series shall not be redeemable at the option of the Corporation prior to the fifth anniversary of the date of first issuance of shares of this Series. Subject to the restrictions set forth in Section 4, the Corporation, at its option, may redeem shares of this Series, as a whole or in part, at any time or from time to time on or after the fifth anniversary of the date of first issuance of shares of this Series, at a redemption price equal to $1,000.00 per share, plus, in each case, accrued and unpaid dividends thereon, whether or not declared, to the date fixed for redemption.

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(B) In the event that fewer than all the outstanding shares of this Series are to be redeemed, the number of shares to be redeemed shall be determined by the Board of Directors or any duly authorized committee of the Board of Directors, and the shares to be redeemed shall be determined by lot, pro rata or by any other method as may be determined by the Board of Directors or any duly authorized committee of the Board of Directors in its sole discretion.

(C) In the event the Corporation shall redeem shares of this Series, notice of such redemption shall be given by first class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the redemption date, to each holder of record of the shares to be redeemed, at such holder’s address as the same appears on the stock register of the Corporation. Each such notice shall state: (i) the redemption date; (ii) the number of shares of this Series to be redeemed and, if fewer than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (iii) the redemption price; (iv) the place or places where certificates for such shares are to be surrendered for payment of the redemption price; and (v) that dividends on the shares to be redeemed will cease to accrue on the redemption date.

(D) Notice having been mailed as aforesaid, from and after the redemption date (unless default shall be made by the Corporation in providing money for the payment of the applicable redemption price), dividends on the shares of this Series so called for redemption shall cease to accrue, and said shares shall no longer be deemed to be outstanding, and all rights of the holders thereof as stockholders of the Corporation (except the right to receive from the Corporation the applicable redemption price) shall cease. Upon surrender in accordance with said notice of the certificates for any shares so redeemed (properly endorsed or assigned for transfer), such shares shall be redeemed by the Corporation at the redemption price. In case fewer than all the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof.

(E) The right of the Corporation to redeem shares of this Series, and the right of the holder of such shares to receive the redemption price therefor, pursuant to this Section 7 are, in certain circumstances, subject to certain restrictions (including the Corporation’s right of offset) set forth in the Agreement, a copy of which is on file at the principal executive offices of the Corporation.

Section 8. Redemption at the Option of the Holder.

(A) The shares of this Series shall not be redeemable at the option of any holder thereof prior to the fifth anniversary of the date of first issuance of shares of this Series. Subject to the restrictions set forth in Section 4, any holder of shares of this Series, at the option of such holder, may require the Corporation to redeem shares of this Series held by such holder, as a whole or in part, at any time or from time to time on or after the fifth anniversary of the date of first issuance of shares of this Series, at a redemption price equal to $1,000.00 per share, plus, in each case, accrued and unpaid dividends thereon, whether or not declared, to the date fixed for redemption; provided, however, that a holder of shares of this Series may exercise the right to require the Corporation to redeem such holder’s shares pursuant to this Section 8 not more than one time in any calendar year; and provided further, that no such request by a holder of shares of this Series shall be for less than the lesser of (i) ten percent of the number of shares of this Series originally issued to such holder by the Corporation, or (ii) all the shares of this Series owned of record by such holder.

(B) For a holder of shares of this Series to exercise the right to require the Corporation to redeem such holder’s shares pursuant to this Section 8, such holder shall give notice of such exercise by first class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the redemption date, to the Corporation at its principal executive offices

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(which, until further notice by the Corporation, shall be 11840 Valley View Road, Eden Prairie, Minnesota 55344) to the attention of the Corporate Secretary. Each such notice shall state: (i) the name of such holder, (ii) the redemption date and (iii) the number of shares of this Series to be redeemed from such holder.

(C) Not later than 20 days after receipt by the Corporation of a notice from a holder of shares of this Series pursuant to Section 8(B), the Corporation shall give notice by first class mail, postage prepaid, to such holder confirming the redemption date and the number of shares to be redeemed from such holder and stating (i) the redemption price, (ii) the place or places where certificates for such shares are to be surrendered for payment of the redemption price and (iii) that dividends on the shares to be redeemed will cease to accrue on the redemption date.

(D) Notice having been mailed by the Corporation as aforesaid, from and after the redemption date (unless default shall be made by the Corporation in providing money for the payment of the applicable redemption price), dividends on the shares of this Series so put for redemption shall cease to accrue, and said shares shall no longer be deemed to be outstanding, and all rights of the holder thereof as a stockholder of the Corporation (except the right to receive from the Corporation the applicable redemption price) shall cease. Upon surrender of the certificates for any shares so redeemed (properly endorsed or assigned for transfer), such shares shall be redeemed by the Corporation at the redemption price. In case fewer than all the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without cost to the holder thereof.

(E) The right of a holder of shares of this Series to require the Corporation to redeem such holder’s shares, and the right of such holder to receive the redemption price therefor, pursuant to this Section 8 are, in certain circumstances, subject to certain restrictions (including the Corporations right of offset) set forth in the Agreement, a copy of which is on file at the principal executive offices of the Corporation.

Section 9. Rank. Any stock of any class or classes of the Corporation shall be deemed to rank:

(A) Prior to the shares of this Series, either as to dividends or upon liquidation, dissolution or winding up, if the holders of such class or classes shall be entitled to the receipt of dividends or of amounts distributable upon dissolution, liquidation or winding up of the Corporation, as the case may be, in preference or priority to the holders of shares of this Series;

(B) On a parity with shares of this Series, either as to dividends or upon liquidation, dissolution or winding up, whether or not the dividend rates, dividend payment dates or redemption or liquidation prices per share or sinking fund provisions, if any, be different from those of this Series, if the holders of such stock shall be entitled to the receipt of dividends or of amounts distributable upon dissolution, liquidation or winding up of the Corporation, as the case may be, in proportion to their respective dividend rates or liquidation prices, without preference or priority, one over the other, as between the holders of such stock and the holders of shares of this Series; and

(C) Junior to shares of this Series, either as to dividends or upon liquidation, dissolution or winding up, if such class shall be Common Stock or if the holders of shares of this Series shall be entitled to receipt of dividends or of amounts distributable upon dissolution, liquidation or winding up of the Corporation, as the case may be, in preference or priority to the holders of shares of such class or classes. The outstanding shares of the Corporation’s Series

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B Junior Participating Preferred Stock shall be deemed to rank junior to the outstanding shares of this Series with respect to the payment of dividends and upon liquidation, dissolution or winding up.

IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation by one of its Vice Presidents and attested by its Secretary this 14th day of February, 1994.

/s/ David L. Boehnen

Senior Vice President

Attest:

/s/ Teresa H. Johnson

Secretary

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EX-10.25

Exhibit 10.25

SUPERVALU INC.

1993 STOCK PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

(Amended and Restated as of December 1, 2003)

This Restricted Stock Unit Award Agreement (this “Agreement”), dated as of June 28, 2000, as amended and restated as of December 1, 2003, is entered into between SUPERVALU INC., a Delaware corporation (the “Company”), and David L. Boehnen, a key employee of the Company (the “Participant”).

The Company, pursuant to its 1993 Stock Plan (the “Plan”), desires to carry out the purpose of the Plan by awarding to the Participant Restricted Stock Units, representing the right to receive shares of Common Stock, par value $1.00 per share, of the Company (“Common Stock”), subject to the terms and conditions contained in this Agreement and in the Plan. Terms used in this Agreement, which are defined in the Plan, shall have the respective meanings ascribed to such terms in the Plan, unless otherwise defined herein.

Accordingly, in consideration of the premises and the agreements contained herein, the parties hereto hereby agree as follows:

1. Grant of Restricted Stock Units

The Company, effective as of the date of this Agreement, hereby grants to the Participant Thirty Thousand (30,000) Restricted Stock Units, each Restricted Stock Unit representing the right to receive one share of Common Stock on such date as set forth herein, subject to the terms and conditions contained herein (the “Restricted Stock Units”).

2. Rights of the Participant with Respect to Restricted Stock Units

The rights of the Participant with respect to the Restricted Stock Units shall remain forfeitable at all times prior to the date on which such rights become vested in accordance with Section 3 hereof. The Participant shall not be entitled to any rights of a stockholder of the Company’s Common Stock solely by reason of this award of Restricted Stock Units. Neither the Participant nor the Participant’s legal representatives shall have any of the rights and privileges of a stockholder of the Company with respect to shares of Common Stock issuable in payment of the Restricted Stock Units unless and until certificates for such shares shall have been issued pursuant to Section 4 hereof.

3. Vesting; Forfeiture

(a) Subject to the terms and conditions of this Agreement, the Restricted Stock Units shall vest in installments on the dates and in the amounts shown below if the Participant remains continuously employed by the Company or a subsidiary of the Company until such date.

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Date	Percentage of Restricted Stock Units Vested
June 28, 2004	66 2/3	%
June 28, 2005	83 1/3	%
June 28, 2006	100	%

(b) Notwithstanding the vesting provisions contained in Section 3(a) above, but subject to the other terms and conditions contained herein, upon the date of the consummation of a “Change of Control” as defined in the Change of Control Severance Agreement, dated February 12, 1999, or any successor agreement thereto, between the Company and the Participant (the “Severance Agreement”), prior to any termination of the Participant’s employment with the Company or a subsidiary of the Company, all of the Restricted Stock Units granted to the Participant pursuant to this Agreement shall vest immediately.

(c) Upon the Participant’s termination of employment with the Company or a subsidiary of the Company, any Restricted Stock Units that have not vested pursuant to the vesting provisions set forth in either Section 3(a) or 3(b) above shall be forfeited and all associated rights shall lapse without value.

(d) Subject to the terms and conditions of this Agreement, if the Participant dies before reaching age sixty-two (62), the Participant’s legal representatives, beneficiaries or heirs, as the case may be, shall be entitled to the Restricted Stock Units that have vested pursuant to Section 3(a) or 3(b) above prior to the date of such death, but any Restricted Stock Units that have not so vested by such date shall be forfeited and all associated rights shall lapse without value.

4. Payment of Restricted Stock Units; Issuance of Shares

(a) If all or a portion of the Restricted Stock Units vest pursuant to Section 3(a) above, the Company shall make payment to the Participant by issuing one share of the Company’s Common Stock for each Restricted Stock Unit that has vested pursuant to Section 3(a) above on the later of the following dates (the “Payment Date”):

(i) the date the Participant reaches age 62; or

(ii) the first anniversary of the date of the Participant’s termination of employment with the Company or a subsidiary of the Company or the 30th day following the date of the Participant’s death, if earlier.

Promptly following the Payment Date, the Company shall cause to be issued one or more stock certificates, registered in the name of the Participant, evidencing the shares issued in payment of the Restricted Stock Units.

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(b) If the Restricted Stock Units vest pursuant to Section 3(b) above, the Company shall make payment to the Participant by issuing one share of the Company’s Common Stock for each Restricted Stock Unit granted to the Participant pursuant to this Agreement as of the date of the consummation of a “Change of Control” as defined in the Severance Agreement (the “Change of Control Payment Date”). Promptly following the Change of Control Payment Date, the Company shall cause to be issued one or more stock certificates, registered in the name of the Participant, evidencing the shares issued in payment of the Restricted Stock Units.

(c) If the Participant should die before reaching age sixty-two (62) and Restricted Stock Units shall have vested as of the date of such death as provided in Section 3(d) above, then, notwithstanding the payment provisions of Section 4(a) above, the Company promptly shall cause to be issued one or more stock certificates, registered in the name of the Participant’s legal representatives, beneficiaries or heirs, as the case may be, evidencing the shares issued in payment of the vested Restricted Stock Units.

(d) For purposes of this Agreement, the date of the Participant’s termination of employment shall be the date on which the Participant actually or effectively ceases to be an employee of the Company or a subsidiary of the Company, in accordance with the Company’s personnel policies. The Participant shall not be deemed to have terminated employment as a result of short-term illness, vacation or other authorized leave of absence, provided the Participant continues to be an employee and returns to his duties as an employee following the completion of such illness, vacation or other absence.

(e) The Participant shall also not be deemed to have terminated employment as a result of a disability, which renders the Participant incapable of returning to work. In the event of such a disability, the Restricted Stock Units shall continue to vest as and when provided in Section 3 and shall be paid as and when provided in Sections 4(a)-(c) above as if the Participant had remained employed by the Company. For purposes of this Section 4(e), “disability” is defined as eligibility for long-term disability payments under the applicable Long-Term Disability Plan of the Company.

5. Adjustments

In the event of any stock dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase shares of Common Stock or other securities of the Company, or other similar corporate transaction or event, the Committee may, as it determines to be appropriate, adjust the number and/or type of shares subject to the Restricted Stock Units.

6. Covenant Not to Compete and Protection of Confidential Information

(a) The Participant stipulates and represents that the following facts are true: the Participant is an Executive Vice President of the Company and led one of the Company’s primary business units; the Participant participates as a member of the Company’s senior executive staff; by virtue of his position on that senior executive staff, the Participant has had access to highly sensitive and confidential information regarding, without limitation, the

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Company’s margins on products in all areas of its business, financial data and strategic plans for all areas of the Company’s business. The Participant acknowledges that this information was gained by virtue of his employment at the Company, is confidential and secret information from which the Company draws economic value, actual or potential, from its not being generally known to persons outside the Company, is information which the Company has taken reasonable measures to preserve its confidentiality, and could not easily be duplicated by others, and is information which the Company required considerable time and effort to develop. The Participant further acknowledges that the misuse, misappropriation or disclosure of this information could cause irreparable harm to the Company, both during and after the term of the Participant’s employment.

(b) The Participant agrees that he will not, within the Continental United States, directly or indirectly, own, manage, operate, join, control, be employed by or participate in ownership, management, operation or control of, provide consulting services to, or be connected in any manner with any business that competes with the Company or any of its food retailing or food wholesaling affiliates; provided, however, that this subparagraph (b) shall not apply after a “Change of Control” as defined in the Severance Agreement. The Participant shall retain the right to seek the written approval of the Company’s Chief Executive Officer to waive the requirements of this Paragraph 6(b) with respect to any particular activity in which the Participant seeks to engage, which approval shall be granted or denied based upon the Company’s reasonable desire to protect its business interest, but in its sole discretion.

(c) The Participant agrees that during his employment and at all times thereafter the Participant will hold in a fiduciary capacity for the benefit of the Company and will not divulge or disclose, directly or indirectly, to any other person, firm or business, all confidential or proprietary information, knowledge and data (including, but not limited to, processes, programs, trade “know how,” ideas, details of contracts, marketing plans, strategies, business development techniques, business acquisition plans, personnel plans, pricing practices and business methods and practices) relating in any way to the business of the Company, its affiliates, customers, suppliers, joint ventures, licensors, licensees, distributors or other persons and entities with whom the Company does business (“Confidential Data”), except upon the Company’s written consent or as required by the Participant’s duties with the Company, for so long as such Confidential Data remains confidential and all such Confidential Data, together with all copies thereof and notes and other references thereto, shall remain the sole property of the Company.

(d) The Participant agrees that the Participant will not either directly, or in concert with others, recruit, solicit or induce, or attempt to induce, any employee or employees of the Company or any of its subsidiaries to terminate their employment with the Company and/or become associated with another employer. The Participant further agrees that the Participant will not either directly, or in concert with others, solicit, divert or take away or attempt to divert or take away, the business or patronage of any of the customers or accounts which were contacted, solicited or served by the Company while the Participant was employed with the Company.

(e) The Participant agrees not to make disparaging statements about the Company, its officers, directors, agents, employees, products or services which are false or misleading.

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(f) The Participant agrees that except as otherwise provided in Section 6(b) above, the foregoing covenants contained in this Section 6 shall continue in effect:

(i) For two (2) years after the Participant’s termination (for any reason whatsoever) of employment with the Company in the event such termination occurs prior to June 28, 2004; or

(ii) Until the later of age sixty-two (62) or one (1) year after the Participant’s termination (for any reason whatsoever) of employment with the Company in the event such termination occurs after June 27, 2004.

(g) The Participant acknowledges that damages, which may arise from a breach of any of the foregoing covenants contained in this Section 6, are impossible to ascertain or prove with certainty. If any covenant in this Section 6 is breached, all Restricted Stock Units shall be forfeited, and all associated rights shall lapse and be terminated, and in addition to other legal remedies which may be available, the Company shall be entitled to an immediate injunction from a court of competent jurisdiction to end such breach, without further proof of damage.

(h) To the extent any provision of this Section of the Agreement shall be determined to be invalid or unenforceable, such provision shall be deleted from this Agreement, and the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected. In furtherance of and not in limitation of the foregoing, the Participant expressly agrees that should the duration of or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid or enforceable under applicable law, then such provision shall be construed to cover only that duration, extent or activities that may validly or enforceably be covered. The Participant acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement shall be construed in a manner that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.

(i) Nothing in this Section 6 shall amend, limit, terminate or replace any other confidentiality or non-compete obligation that the Participant may have in any other agreement with the Company.

7. Transferability

The Restricted Stock Units shall not be transferable otherwise than by will or the laws of descent and distribution. More particularly (but without limiting the generality of the foregoing), the Restricted Stock Units may not be assigned, transferred (except as aforesaid), pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Restricted Stock Units contrary to the provisions hereof and the levy of an execution, attachment or similar process upon the Restricted Stock Units shall be void.

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8. Taxes

(a) The Participant acknowledges that he will consult with his personal tax advisor regarding the income tax consequences of the vesting and payment of the Restricted Stock Units or any other matters related to this Agreement. In order to comply with all applicable federal or state income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal or state payroll, withholding, income or other taxes, which are the sole and absolute responsibility of a Participant, are withheld or collected from the Participant.

(b) The Participant may elect to satisfy any federal and state income tax withholding obligations arising from the payment of the Restricted Stock Units pursuant to Section 4 hereof by (i) having the Company withhold a portion of the shares of Common Stock otherwise to be delivered in payment of the Restricted Stock Units having a Fair Market Value (as defined in the Plan) equal to the amount of federal and state income taxes required to be withheld in connection with such payment or (ii) delivering to the Company shares of Common Stock other than the shares issuable in connection with the payment of the Restricted Stock Units having a Fair Market Value equal to such taxes. The Participant may elect to satisfy any federal and state income tax withholding obligations arising prior to the payment of the Restricted Stock Units pursuant to Section 4 hereof by delivering to the Company shares of Common Stock other than the shares issuable in payment of the Restricted Stock Units having a Fair Market Value equal to such taxes. Any election must be made on or before the date that the amount of taxes to be withheld is determined.

9. No Right to Employment

Nothing in this Agreement or in the Plan shall be construed as giving the Participant any right to be retained in the employ of the Company or any subsidiary of the Company, nor shall this Agreement or the Plan affect in any way the right of the Company or a subsidiary of the Company to terminate the Participant’s employment at any time, with or without cause.

10. General Provisions

(a) The Restricted Stock Units are granted pursuant to the Plan and are subject to the terms and conditions contained therein. A copy of the Plan is available to the Participant upon request.

(b) This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to the Restricted Stock Units.

(c) This Agreement is subject to all applicable laws and the applicable rules and regulations of any governmental agencies or national securities exchanges. The Company shall not be required to issue or deliver any shares of Common Stock in payment of the Restricted Stock Units until the requirements of any federal or state securities laws, rules or regulations or other laws or rules (including the rules of the New York Stock Exchange) as may be determined by the Company to be applicable are satisfied.

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(d) The validity, construction and effect of this Agreement, and any rules and regulations relating to this Agreement, shall be determined in accordance with the laws of the State of Minnesota (other than its law respecting choice of law), except to the extent the general corporation law of the State of Delaware would be applicable.

(e) If any provision of this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any applicable jurisdiction, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of this Agreement, such provision shall be stricken and the remainder of this Agreement shall remain in full force and effect.

(f) The headings in this Agreement are for convenience of reference only and shall not be deemed in any way to be material or relevant to the construction or interpretation of this Agreement or any provision hereof.

IN WITNESS WHEREOF, the Company and the Participant have signed this Agreement as of the date first above written.

SUPERVALU INC.
By:	/s/ Ronald C. Tortelli
	Ronald C. Tortelli
Its:	Senior Vice President,
	Human Resources
PARTICIPANT
/s/ David L. Boehnen
David L. Boehnen

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EX-10.26

Exhibit 10.26

SUPERVALU INC.

1993 STOCK PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

(Amended and Restated as of December 1, 2003)

This Restricted Stock Unit Award Agreement (this “Agreement”), dated as of June 28, 2000, as amended and restated as of December 1, 2003, is entered into between SUPERVALU INC., a Delaware corporation (the “Company”), and Pamela K. Knous, a key employee of the Company (the “Participant”).

The Company, pursuant to its 1993 Stock Plan (the “Plan”), desires to carry out the purpose of the Plan by awarding to the Participant Restricted Stock Units, representing the right to receive shares of Common Stock, par value $1.00 per share, of the Company (“Common Stock”), subject to the terms and conditions contained in this Agreement and in the Plan. Terms used in this Agreement, which are defined in the Plan, shall have the respective meanings ascribed to such terms in the Plan, unless otherwise defined herein.

Accordingly, in consideration of the premises and the agreements contained herein, the parties hereto hereby agree as follows:

1. Grant of Restricted Stock Units

The Company, effective as of the date of this Agreement, hereby grants to the Participant Thirty Thousand (30,000) Restricted Stock Units, each Restricted Stock Unit representing the right to receive one share of Common Stock on such date as set forth herein, subject to the terms and conditions contained herein (the “Restricted Stock Units”).

2. Rights of the Participant with Respect to Restricted Stock Units

The rights of the Participant with respect to the Restricted Stock Units shall remain forfeitable at all times prior to the date on which such rights become vested in accordance with Section 3 hereof. The Participant shall not be entitled to any rights of a stockholder of the Company’s Common Stock solely by reason of this award of Restricted Stock Units. Neither the Participant nor the Participant’s legal representatives shall have any of the rights and privileges of a stockholder of the Company with respect to shares of Common Stock issuable in payment of the Restricted Stock Units unless and until certificates for such shares shall have been issued pursuant to Section 4 hereof.

3. Vesting; Forfeiture

(a) Subject to the terms and conditions of this Agreement, the Restricted Stock Units shall vest in installments on the dates and in the amounts shown below if the Participant remains continuously employed by the Company or a subsidiary of the Company until such date.

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Date	Percentage of Restricted Stock Units Vested
June 28, 2005	71	%
June 28, 2006	86	%
June 28, 2007	100	%

(b) Notwithstanding the vesting provisions contained in Section 3(a) above, but subject to the other terms and conditions contained herein, upon the date of the consummation of a “Change of Control” as defined in the Change of Control Severance Agreement, dated February 12, 1999, or any successor agreement thereto, between the Company and the Participant (the “Severance Agreement”), prior to any termination of the Participant’s employment with the Company or a subsidiary of the Company, all of the Restricted Stock Units granted to the Participant pursuant to this Agreement shall vest immediately.

(c) Upon the Participant’s termination of employment with the Company or a subsidiary of the Company, any Restricted Stock Units that have not vested pursuant to the vesting provisions set forth in either Section 3(a) or 3(b) above shall be forfeited and all associated rights shall lapse without value.

(d) Subject to the terms and conditions of this Agreement, if the Participant dies before reaching age fifty-seven (57), the Participant’s legal representatives, beneficiaries or heirs, as the case may be, shall be entitled to the Restricted Stock Units that have vested pursuant to Section 3(a) or 3(b) above prior to the date of such death, but any Restricted Stock Units that have not so vested by such date shall be forfeited and all associated rights shall lapse without value.

4. Payment of Restricted Stock Units; Issuance of Shares

(a) If all or a portion of the Restricted Stock Units vest pursuant to Section 3(a) above, the Company shall make payment to the Participant by issuing one share of the Company’s Common Stock for each Restricted Stock Unit that has vested pursuant to Section 3(a) above on the later of the following dates (the “Payment Date”):

(i) the date the Participant reaches age 57; or

(ii) the first anniversary of the date of the Participant’s termination of employment with the Company or a subsidiary of the Company or the 30th day following the date of the Participant’s death, if earlier.

Promptly following the Payment Date, the Company shall cause to be issued one or more stock certificates, registered in the name of the Participant, evidencing the shares issued in payment of the Restricted Stock Units.

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(b) If the Restricted Stock Units vest pursuant to Section 3(b) above, the Company shall make payment to the Participant by issuing one share of the Company’s Common Stock for each Restricted Stock Unit granted to the Participant pursuant to this Agreement as of the date of the consummation of a “Change of Control” as defined in the Severance Agreement (the “Change of Control Payment Date”). Promptly following the Change of Control Payment Date, the Company shall cause to be issued one or more stock certificates, registered in the name of the Participant, evidencing the shares issued in payment of the Restricted Stock Units.

(c) If the Participant should die before reaching age fifty-seven (57) and Restricted Stock Units shall have vested as of the date of such death as provided in Section 3(d) above, then, notwithstanding the payment provisions of Section 4(a) above, the Company promptly shall cause to be issued one or more stock certificates, registered in the name of the Participant’s legal representatives, beneficiaries or heirs, as the case may be, evidencing the shares issued in payment of the vested Restricted Stock Units.

(d) For purposes of this Agreement, the date of the Participant’s termination of employment shall be the date on which the Participant actually or effectively ceases to be an employee of the Company or a subsidiary of the Company, in accordance with the Company’s personnel policies. The Participant shall not be deemed to have terminated employment as a result of short-term illness, vacation or other authorized leave of absence, provided the Participant continues to be an employee and returns to her duties as an employee following the completion of such illness, vacation or other absence.

(e) The Participant shall also not be deemed to have terminated employment as a result of a disability, which renders the Participant incapable of returning to work. In the event of such a disability, the Restricted Stock Units shall continue to vest as and when provided in Section 3 and shall be paid as and when provided in Sections 4(a)-(c) above as if the Participant had remained employed by the Company. For purposes of this Section 4(e), “disability” is defined as eligibility for long-term disability payments under the applicable Long-Term Disability Plan of the Company.

5. Adjustments

In the event of any stock dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase shares of Common Stock or other securities of the Company, or other similar corporate transaction or event, the Committee may, as it determines to be appropriate, adjust the number and/or type of shares subject to the Restricted Stock Units.

6. Covenant Not to Compete and Protection of Confidential Information

(a) The Participant stipulates and represents that the following facts are true: the Participant is an Executive Vice President of the Company and led one of the Company’s primary administrative functions; the Participant participates as a member of the Company’s senior executive staff; by virtue of her position on that senior executive staff, the Participant has had access to highly sensitive and confidential information regarding, without limitation,

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the Company’s margins on products in all areas of its business, and financial data and strategic plans for all areas of the Company’s business. The Participant acknowledges that this information was gained by virtue of her employment at the Company, is confidential and secret information from which the Company draws economic value, actual or potential, from its not being generally known to persons outside the Company, is information which the Company has taken reasonable measures to preserve its confidentiality, and could not easily be duplicated by others, and is information which the Company required considerable time and effort to develop. The Participant further acknowledges that the misuse, misappropriation or disclosure of this information could cause irreparable harm to the Company, both during and after the term of the Participant’s employment.

(b) The Participant agrees that she will not, within the Continental United States, directly or indirectly, own, manage, operate, join, control, be employed by or participate in ownership, management, operation or control of, provide consulting services to, or be connected in any manner with any business that competes with the Company or any of its food retailing or food wholesaling affiliates; provided, however, that this subparagraph (b) shall not apply after a “Change of Control” as defined in the Severance Agreement. The Participant shall retain the right to seek the written approval of the Company’s Chief Executive Officer to waive the requirements of this Paragraph 6(b) with respect to any particular activity in which the Participant seeks to engage, which approval shall be granted or denied based upon the Company’s reasonable desire to protect its business interest, but in its sole discretion.

(c) The Participant agrees that during her employment and at all times thereafter the Participant will hold in a fiduciary capacity for the benefit of the Company and will not divulge or disclose, directly or indirectly, to any other person, firm or business, all confidential or proprietary information, knowledge and data (including, but not limited to, processes, programs, trade “know how,” ideas, details of contracts, marketing plans, strategies, business development techniques, business acquisition plans, personnel plans, pricing practices and business methods and practices) relating in any way to the business of the Company, its affiliates, customers, suppliers, joint ventures, licensors, licensees, distributors or other persons and entities with whom the Company does business (“Confidential Data”), except upon the Company’s written consent or as required by the Participant’s duties with the Company, for so long as such Confidential Data remains confidential and all such Confidential Data, together with all copies thereof and notes and other references thereto, shall remain the sole property of the Company.

(d) The Participant agrees that the Participant will not either directly, or in concert with others, recruit, solicit or induce, or attempt to induce, any employee or employees of the Company or any of its subsidiaries to terminate their employment with the Company and/or become associated with another employer. The Participant further agrees that the Participant will not either directly, or in concert with others, solicit, divert or take away or attempt to divert or take away, the business or patronage of any of the customers or accounts which were contacted, solicited or served by the Company while the Participant was employed with the Company.

(e) The Participant agrees not to make disparaging statements about the Company, its officers, directors, agents, employees, products or services which are false or misleading.

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(f) The Participant agrees that except as otherwise provided in Section 6(b) above, the foregoing covenants contained in this Section 6 shall continue in effect:

(i) For two (2) years after the Participant’s termination (for any reason whatsoever) of employment with the Company in the event such termination occurs prior to June 28, 2005; or

(ii) Until the later of age fifty-seven (57) or one (1) year after the Participant’s termination (for any reason whatsoever) of employment with the Company in the event such termination occurs after June 27, 2005.

(g) The Participant acknowledges that damages, which may arise from a breach of any of the foregoing covenants contained in this Section 6, are impossible to ascertain or prove with certainty. If any covenant in this Section 6 is breached, all Restricted Stock Units shall be forfeited, and all associated rights shall lapse and be terminated, and in addition to other legal remedies which may be available, the Company shall be entitled to an immediate injunction from a court of competent jurisdiction to end such breach, without further proof of damage.

(h) To the extent any provision of this Section of the Agreement shall be determined to be invalid or unenforceable, such provision shall be deleted from this Agreement, and the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected. In furtherance of and not in limitation of the foregoing, the Participant expressly agrees that should the duration of or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid or enforceable under applicable law, then such provision shall be construed to cover only that duration, extent or activities that may validly or enforceably be covered. The Participant acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement shall be construed in a manner that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.

(i) Nothing in this Section 6 shall amend, limit, terminate or replace any other confidentiality or non-compete obligation that the Participant may have in any other agreement with the Company.

7. Transferability

The Restricted Stock Units shall not be transferable otherwise than by will or the laws of descent and distribution. More particularly (but without limiting the generality of the foregoing), the Restricted Stock Units may not be assigned, transferred (except as aforesaid), pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Restricted Stock Units contrary to the provisions hereof and the levy of an execution, attachment or similar process upon the Restricted Stock Units shall be void.

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8. Taxes

(a) The Participant acknowledges that she will consult with her personal tax advisor regarding the income tax consequences of the vesting and payment of the Restricted Stock Units or any other matters related to this Agreement. In order to comply with all applicable federal or state income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal or state payroll, withholding, income or other taxes, which are the sole and absolute responsibility of a Participant, are withheld or collected from the Participant.

(b) The Participant may elect to satisfy any federal and state income tax withholding obligations arising from the payment of the Restricted Stock Units pursuant to Section 4 hereof by (i) having the Company withhold a portion of the shares of Common Stock otherwise to be delivered in payment of the Restricted Stock Units having a Fair Market Value (as defined in the Plan) equal to the amount of federal and state income taxes required to be withheld in connection with such payment or (ii) delivering to the Company shares of Common Stock other than the shares issuable in connection with the payment of the Restricted Stock Units having a Fair Market Value equal to such taxes. The Participant may elect to satisfy any federal and state income tax withholding obligations arising prior to the payment of the Restricted Stock Units pursuant to Section 4 hereof by delivering to the Company shares of Common Stock other than the shares issuable in payment of the Restricted Stock Units having a Fair Market Value equal to such taxes. Any election must be made on or before the date that the amount of taxes to be withheld is determined.

9. No Right to Employment

Nothing in this Agreement or in the Plan shall be construed as giving the Participant any right to be retained in the employ of the Company or any subsidiary of the Company, nor shall this Agreement or the Plan affect in any way the right of the Company or a subsidiary of the Company to terminate the Participant’s employment at any time, with or without cause.

10. General Provisions

(a) The Restricted Stock Units are granted pursuant to the Plan and are subject to the terms and conditions contained therein. A copy of the Plan is available to the Participant upon request.

(b) This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to the Restricted Stock Units.

(c) This Agreement is subject to all applicable laws and the applicable rules and regulations of any governmental agencies or national securities exchanges. The Company shall not be required to issue or deliver any shares of Common Stock in payment of the Restricted Stock Units until the requirements of any federal or state securities laws, rules or regulations or other laws or rules (including the rules of the New York Stock Exchange) as may be determined by the Company to be applicable are satisfied.

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(d) The validity, construction and effect of this Agreement, and any rules and regulations relating to this Agreement, shall be determined in accordance with the laws of the State of Minnesota (other than its law respecting choice of law), except to the extent the general corporation law of the State of Delaware would be applicable.

(e) If any provision of this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any applicable jurisdiction, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of this Agreement, such provision shall be stricken and the remainder of this Agreement shall remain in full force and effect.

(f) The headings in this Agreement are for convenience of reference only and shall not be deemed in any way to be material or relevant to the construction or interpretation of this Agreement or any provision hereof.

IN WITNESS WHEREOF, the Company and the Participant have signed this Agreement as of the date first above written.

SUPERVALU INC.
By:	/s/ Jeffrey Noddle
	Jeffrey Noddle
Its:	Chairman and Chief Executive Officer
PARTICIPANT
/s/ Pamela K. Knous Pamela K. Knous

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EX-10.27

Exhibit 10.27

SUPERVALU INC.

2002 STOCK PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

This Restricted Stock Unit Award Agreement (this “Agreement”), dated as of December 1, 2003, is entered into between SUPERVALU INC., a Delaware corporation (the “Company”), and John H. Hooley, a key employee of the Company (the “Participant”).

The Company, pursuant to its 2002 Stock Plan (the “Plan”), desires to carry out the purpose of the Plan by awarding to the Participant Restricted Stock Units, representing the right to receive shares of Common Stock, par value $1.00 per share, of the Company (“Common Stock”), subject to the terms and conditions contained in this Agreement and in the Plan. Terms used in this Agreement, which are defined in the Plan, shall have the respective meanings ascribed to such terms in the Plan, unless otherwise defined herein.

Accordingly, in consideration of the premises and the agreements contained herein, the parties hereto hereby agree as follows:

1. Grant of Restricted Stock Units

The Company, effective as of the date of this Agreement, hereby grants to the Participant Forty Thousand (40,000) Restricted Stock Units, each Restricted Stock Unit representing the right to receive one share of Common Stock on such date as set forth herein, subject to the terms and conditions contained herein (the “Restricted Stock Units”).

2. Rights of the Participant with Respect to Restricted Stock Units

The rights of the Participant with respect to the Restricted Stock Units shall remain forfeitable at all times prior to the date on which such rights become vested in accordance with Section 3 hereof. The Participant shall not be entitled to any rights of a stockholder of the Company’s Common Stock solely by reason of this award of Restricted Stock Units. Neither the Participant nor the Participant’s legal representatives shall have any of the rights and privileges of a stockholder of the Company with respect to shares of Common Stock issuable in payment of the Restricted Stock Units unless and until certificates for such shares shall have been issued pursuant to Section 4 hereof.

3. Vesting; Forfeiture

(a) Subject to the terms and conditions of this Agreement, the Restricted Stock Units shall vest in installments on the dates and in the amounts shown below if the Participant remains continuously employed by the Company or a subsidiary of the Company until such date.

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Date	Percentage of Restricted Stock Units Vested
April 9, 2008	71	%
April 9, 2009	86	%
April 9, 2010	100	%

(b) Notwithstanding the vesting provisions contained in Section 3(a) above, but subject to the other terms and conditions contained herein, upon the date of the consummation of a “Change of Control” as defined in the Change of Control Severance Agreement, dated February 12, 1999, or any successor agreement thereto, between the Company and the Participant (the “Severance Agreement”), prior to any termination of the Participant’s employment with the Company or a subsidiary of the Company, all of the Restricted Stock Units granted to the Participant pursuant to this Agreement shall vest immediately.

(c) Upon the Participant’s termination of employment with the Company or a subsidiary of the Company, any Restricted Stock Units that have not vested pursuant to the vesting provisions set forth in either Section 3(a) or 3(b) above shall be forfeited and all associated rights shall lapse without value.

(d) Subject to the terms and conditions of this Agreement, if the Participant dies before reaching age sixty-two (62), the Participant’s legal representatives, beneficiaries or heirs, as the case may be, shall be entitled to the Restricted Stock Units that have vested pursuant to Section 3(a) or 3(b) above prior to the date of such death, but any Restricted Stock Units that have not so vested by such date shall be forfeited and all associated rights shall lapse without value.

4. Payment of Restricted Stock Units; Issuance of Shares

(a) If all or a portion of the Restricted Stock Units vest pursuant to Section 3(a) above, the Company shall make payment to the Participant by issuing one share of the Company’s Common Stock for each Restricted Stock Unit that has vested pursuant to Section 3(a) above on the later of the following dates (the “Payment Date”):

(i) the date the Participant reaches age 60; or

(ii) the first anniversary of the date of the Participant’s termination of employment with the Company or a subsidiary of the Company or the 30th day following the date of the Participant’s death, if earlier.

Promptly following the Payment Date, the Company shall cause to be issued one or more stock certificates, registered in the name of the Participant, evidencing the shares issued in payment of the Restricted Stock Units.

(b) If the Restricted Stock Units vest pursuant to Section 3(b) above, the Company shall make payment to the Participant by issuing one share of the Company’s

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Common Stock for each Restricted Stock Unit granted to the Participant pursuant to this Agreement as of the date of the consummation of a “Change of Control” as defined in the Severance Agreement (the “Change of Control Payment Date”). Promptly following the Change of Control Payment Date, the Company shall cause to be issued one or more stock certificates, registered in the name of the Participant, evidencing the shares issued in payment of the Restricted Stock Units.

(c) If the Participant should die before reaching age sixty-two (62) and Restricted Stock Units shall have vested as of the date of such death as provided in Section 3(d) above, then, notwithstanding the payment provisions of Section 4(a) above, the Company promptly shall cause to be issued one or more stock certificates, registered in the name of the Participant’s legal representatives, beneficiaries or heirs, as the case may be, evidencing the shares issued in payment of the vested Restricted Stock Units.

(d) For purposes of this Agreement, the date of the Participant’s termination of employment shall be the date on which the Participant actually or effectively ceases to be an employee of the Company or a subsidiary of the Company, in accordance with the Company’s personnel policies. The Participant shall not be deemed to have terminated employment as a result of short-term illness, vacation or other authorized leave of absence, provided the Participant continues to be an employee and returns to his duties as an employee following the completion of such illness, vacation or other absence.

(e) The Participant shall also not be deemed to have terminated employment as a result of a disability, which renders the Participant incapable of returning to work. In the event of such a disability, the Restricted Stock Units shall continue to vest as and when provided in Section 3 and shall be paid as and when provided in Sections 4(a)-(c) above as if the Participant had remained employed by the Company. For purposes of this Section 4(e), “disability” is defined as eligibility for long-term disability payments under the applicable Long-Term Disability Plan of the Company.

5. Adjustments

In the event of any stock dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase shares of Common Stock or other securities of the Company, or other similar corporate transaction or event, the Committee may, as it determines to be appropriate, adjust the number and/or type of shares subject to the Restricted Stock Units.

6. Covenant Not to Compete and Protection of Confidential Information

(a) The Participant stipulates and represents that the following facts are true: the Participant is an Executive Vice President of the Company and led one of the Company’s primary business units; the Participant participates as a member of the Company’s senior executive staff; by virtue of his position on that senior executive staff, the Participant has had access to highly sensitive and confidential information regarding, without limitation, the Company’s margins on products in all areas of its business, financial data and strategic plans for all areas of the Company’s business, and the Participant has a business

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relationship with most if not all of the Company’s major customers and it is an important part of the Participant’s responsibilities to cultivate and further those relationships. The Participant acknowledges that this information was gained by virtue of his employment at the Company, is confidential and secret information from which the Company draws economic value, actual or potential, from its not being generally known to persons outside the Company, is information which the Company has taken reasonable measures to preserve its confidentiality, and could not easily be duplicated by others, and is information which the Company required considerable time and effort to develop. The Participant further acknowledges that the misuse, misappropriation or disclosure of this information could cause irreparable harm to the Company, both during and after the term of the Participant’s employment.

(b) The Participant agrees that he will not, within the Continental United States, directly or indirectly, own, manage, operate, join, control, be employed by or participate in ownership, management, operation or control of, provide consulting services to, or be connected in any manner with any business that competes with the Company or any of its food retailing or food wholesaling affiliates; provided, however, that this subparagraph (b) shall not apply after a “Change of Control” as defined in the Severance Agreement. The Participant shall retain the right to seek the written approval of the Company’s Chief Executive Officer to waive the requirements of this Paragraph 6(b) with respect to any particular activity in which the Participant seeks to engage, which approval shall be granted or denied based upon the Company’s reasonable desire to protect its business interest, but in its sole discretion.

(c) The Participant agrees that during his employment and at all times thereafter the Participant will hold in a fiduciary capacity for the benefit of the Company and will not divulge or disclose, directly or indirectly, to any other person, firm or business, all confidential or proprietary information, knowledge and data (including, but not limited to, processes, programs, trade “know how,” ideas, details of contracts, marketing plans, strategies, business development techniques, business acquisition plans, personnel plans, pricing practices and business methods and practices) relating in any way to the business of the Company, its affiliates, customers, suppliers, joint ventures, licensors, licensees, distributors or other persons and entities with whom the Company does business (“Confidential Data”), except upon the Company’s written consent or as required by the Participant’s duties with the Company, for so long as such Confidential Data remains confidential and all such Confidential Data, together with all copies thereof and notes and other references thereto, shall remain the sole property of the Company.

(d) The Participant agrees that the Participant will not either directly, or in concert with others, recruit, solicit or induce, or attempt to induce, any employee or employees of the Company or any of its subsidiaries to terminate their employment with the Company and/or become associated with another employer. The Participant further agrees that the Participant will not either directly, or in concert with others, solicit, divert or take away or attempt to divert or take away, the business or patronage of any of the customers or accounts which were contacted, solicited or served by the Company while the Participant was employed with the Company.

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(e) The Participant agrees not to make disparaging statements about the Company, its officers, directors, agents, employees, products or services which are false or misleading.

(f) The Participant agrees that except as otherwise provided in Section 6(b) above, the foregoing covenants contained in this Section 6 shall continue in effect:

(i) For two (2) years after the Participant’s termination (for any reason whatsoever) of employment with the Company in the event such termination occurs prior to April 9, 2008; or

(ii) Until the later of age sixty (60) or one (1) year after the Participant’s termination (for any reason whatsoever) of employment with the Company in the event such termination occurs after April 8, 2008.

(g) The Participant acknowledges that damages, which may arise from a breach of any of the foregoing covenants contained in this Section 6, are impossible to ascertain or prove with certainty. If any covenant in this Section 6 is breached, all Restricted Stock Units shall be forfeited, and all associated rights shall lapse and be terminated, and in addition to other legal remedies which may be available, the Company shall be entitled to an immediate injunction from a court of competent jurisdiction to end such breach, without further proof of damage.

(h) To the extent any provision of this Section of the Agreement shall be determined to be invalid or unenforceable, such provision shall be deleted from this Agreement, and the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected. In furtherance of and not in limitation of the foregoing, the Participant expressly agrees that should the duration of or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid or enforceable under applicable law, then such provision shall be construed to cover only that duration, extent or activities that may validly or enforceably be covered. The Participant acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement shall be construed in a manner that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.

(i) Nothing in this Section 6 shall amend, limit, terminate or replace any other confidentiality or non-compete obligation that the Participant may have in any other agreement with the Company.

7. Transferability

The Restricted Stock Units shall not be transferable otherwise than by will or the laws of descent and distribution. More particularly (but without limiting the generality of the foregoing), the Restricted Stock Units may not be assigned, transferred (except as aforesaid), pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Restricted Stock Units contrary to the provisions hereof and the levy of an execution, attachment or similar process upon the Restricted Stock Units shall be void.

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8. Taxes

(a) The Participant acknowledges that he will consult with his personal tax advisor regarding the income tax consequences of the vesting and payment of the Restricted Stock Units or any other matters related to this Agreement. In order to comply with all applicable federal or state income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal or state payroll, withholding, income or other taxes, which are the sole and absolute responsibility of a Participant, are withheld or collected from the Participant.

(b) The Participant may elect to satisfy any federal and state income tax withholding obligations arising from the payment of the Restricted Stock Units pursuant to Section 4 hereof by (i) having the Company withhold a portion of the shares of Common Stock otherwise to be delivered in payment of the Restricted Stock Units having a Fair Market Value (as defined in the Plan) equal to the amount of federal and state income taxes required to be withheld in connection with such payment or (ii) delivering to the Company shares of Common Stock other than the shares issuable in connection with the payment of the Restricted Stock Units having a Fair Market Value equal to such taxes. The Participant may elect to satisfy any federal and state income tax withholding obligations arising prior to the payment of the Restricted Stock Units pursuant to Section 4 hereof by delivering to the Company shares of Common Stock other than the shares issuable in payment of the Restricted Stock Units having a Fair Market Value equal to such taxes. Any election must be made on or before the date that the amount of taxes to be withheld is determined.

9. No Right to Employment

Nothing in this Agreement or in the Plan shall be construed as giving the Participant any right to be retained in the employ of the Company or any subsidiary of the Company, nor shall this Agreement or the Plan affect in any way the right of the Company or a subsidiary of the Company to terminate the Participant’s employment at any time, with or without cause.

10. General Provisions

(a) The Restricted Stock Units are granted pursuant to the Plan and are subject to the terms and conditions contained therein. A copy of the Plan is available to the Participant upon request.

(b) This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to the Restricted Stock Units.

(c) This Agreement is subject to all applicable laws and the applicable rules and regulations of any governmental agencies or national securities exchanges. The Company shall not be required to issue or deliver any shares of Common Stock in payment of the Restricted Stock Units until the requirements of any federal or state securities laws, rules or regulations or other laws or rules (including the rules of the New York Stock Exchange) as may be determined by the Company to be applicable are satisfied.

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(d) The validity, construction and effect of this Agreement, and any rules and regulations relating to this Agreement, shall be determined in accordance with the laws of the State of Minnesota (other than its law respecting choice of law), except to the extent the general corporation law of the State of Delaware would be applicable.

(e) If any provision of this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any applicable jurisdiction, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of this Agreement, such provision shall be stricken and the remainder of this Agreement shall remain in full force and effect.

(f) The headings in this Agreement are for convenience of reference only and shall not be deemed in any way to be material or relevant to the construction or interpretation of this Agreement or any provision hereof.

IN WITNESS WHEREOF, the Company and the Participant have signed this Agreement as of the date first above written.

SUPERVALU INC.
By:	/s/ Jeffrey Noddle
	Jeffrey Noddle
Its:	Chairman and Chief Executive Officer
PARTICIPANT
/s/ John H. Hooley
John H. Hooley

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EX-10.28

Exhibit 10.28

SUPERVALU INC.

2002 STOCK PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

This Restricted Stock Unit Award Agreement (this “Agreement”), dated as of December 1, 2003, is entered into between SUPERVALU INC., a Delaware corporation (the “Company”), and Michael L. Jackson, a key employee of the Company (the “Participant”).

The Company, pursuant to its 2002 Stock Plan (the “Plan”), desires to carry out the purpose of the Plan by awarding to the Participant Restricted Stock Units, representing the right to receive shares of Common Stock, par value $1.00 per share, of the Company (“Common Stock”), subject to the terms and conditions contained in this Agreement and in the Plan. Terms used in this Agreement, which are defined in the Plan, shall have the respective meanings ascribed to such terms in the Plan, unless otherwise defined herein.

Accordingly, in consideration of the premises and the agreements contained herein, the parties hereto hereby agree as follows:

1. Grant of Restricted Stock Units

The Company, effective as of the date of this Agreement, hereby grants to the Participant Forty Thousand (40,000) Restricted Stock Units, each Restricted Stock Unit representing the right to receive one share of Common Stock on such date as set forth herein, subject to the terms and conditions contained herein (the “Restricted Stock Units”).

2. Rights of the Participant with Respect to Restricted Stock Units

The rights of the Participant with respect to the Restricted Stock Units shall remain forfeitable at all times prior to the date on which such rights become vested in accordance with Section 3 hereof. The Participant shall not be entitled to any rights of a stockholder of the Company’s Common Stock solely by reason of this award of Restricted Stock Units. Neither the Participant nor the Participant’s legal representatives shall have any of the rights and privileges of a stockholder of the Company with respect to shares of Common Stock issuable in payment of the Restricted Stock Units unless and until certificates for such shares shall have been issued pursuant to Section 4 hereof.

3. Vesting; Forfeiture

(a) Subject to the terms and conditions of this Agreement, the Restricted Stock Units shall vest in installments on the dates and in the amounts shown below if the Participant remains continuously employed by the Company or a subsidiary of the Company until such date.

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Date	Percentage of Restricted Stock Units Vested
April 9, 2008	71	%
April 9, 2009	86	%
April 9, 2010	100	%

(b) Notwithstanding the vesting provisions contained in Section 3(a) above, but subject to the other terms and conditions contained herein, upon the date of the consummation of a “Change of Control” as defined in the Change of Control Severance Agreement, dated February 12, 1999, or any successor agreement thereto, between the Company and the Participant (the “Severance Agreement”), prior to any termination of the Participant’s employment with the Company or a subsidiary of the Company, all of the Restricted Stock Units granted to the Participant pursuant to this Agreement shall vest immediately.

(c) Upon the Participant’s termination of employment with the Company or a subsidiary of the Company, any Restricted Stock Units that have not vested pursuant to the vesting provisions set forth in either Section 3(a) or 3(b) above shall be forfeited and all associated rights shall lapse without value.

(d) Subject to the terms and conditions of this Agreement, if the Participant dies before reaching age sixty-two (62), the Participant’s legal representatives, beneficiaries or heirs, as the case may be, shall be entitled to the Restricted Stock Units that have vested pursuant to Section 3(a) or 3(b) above prior to the date of such death, but any Restricted Stock Units that have not so vested by such date shall be forfeited and all associated rights shall lapse without value.

4. Payment of Restricted Stock Units; Issuance of Shares

(a) If all or a portion of the Restricted Stock Units vest pursuant to Section 3(a) above, the Company shall make payment to the Participant by issuing one share of the Company’s Common Stock for each Restricted Stock Unit that has vested pursuant to Section 3(a) above on the later of the following dates (the “Payment Date”):

(i) the date the Participant reaches age 60; or

(ii) the first anniversary of the date of the Participant’s termination of employment with the Company or a subsidiary of the Company or the 30th day following the date of the Participant’s death, if earlier.

Promptly following the Payment Date, the Company shall cause to be issued one or more stock certificates, registered in the name of the Participant, evidencing the shares issued in payment of the Restricted Stock Units.

(b) If the Restricted Stock Units vest pursuant to Section 3(b) above, the Company shall make payment to the Participant by issuing one share of the Company’s

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Common Stock for each Restricted Stock Unit granted to the Participant pursuant to this Agreement as of the date of the consummation of a “Change of Control” as defined in the Severance Agreement (the “Change of Control Payment Date”). Promptly following the Change of Control Payment Date, the Company shall cause to be issued one or more stock certificates, registered in the name of the Participant, evidencing the shares issued in payment of the Restricted Stock Units.

(c) If the Participant should die before reaching age sixty-two (62) and Restricted Stock Units shall have vested as of the date of such death as provided in Section 3(d) above, then, notwithstanding the payment provisions of Section 4(a) above, the Company promptly shall cause to be issued one or more stock certificates, registered in the name of the Participant’s legal representatives, beneficiaries or heirs, as the case may be, evidencing the shares issued in payment of the vested Restricted Stock Units.

(d) For purposes of this Agreement, the date of the Participant’s termination of employment shall be the date on which the Participant actually or effectively ceases to be an employee of the Company or a subsidiary of the Company, in accordance with the Company’s personnel policies. The Participant shall not be deemed to have terminated employment as a result of short-term illness, vacation or other authorized leave of absence, provided the Participant continues to be an employee and returns to his duties as an employee following the completion of such illness, vacation or other absence.

(e) The Participant shall also not be deemed to have terminated employment as a result of a disability, which renders the Participant incapable of returning to work. In the event of such a disability, the Restricted Stock Units shall continue to vest as and when provided in Section 3 and shall be paid as and when provided in Sections 4(a)-(c) above as if the Participant had remained employed by the Company. For purposes of this Section 4(e), “disability” is defined as eligibility for long-term disability payments under the applicable Long-Term Disability Plan of the Company.

5. Adjustments

In the event of any stock dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase shares of Common Stock or other securities of the Company, or other similar corporate transaction or event, the Committee may, as it determines to be appropriate, adjust the number and/or type of shares subject to the Restricted Stock Units.

6. Covenant Not to Compete and Protection of Confidential Information

(a) The Participant stipulates and represents that the following facts are true: the Participant is an Executive Vice President of the Company and led one of the Company’s primary business units; the Participant participates as a member of the Company’s senior executive staff; by virtue of his position on that senior executive staff, the Participant has had access to highly sensitive and confidential information regarding, without limitation, the Company’s margins on products in all areas of its business, financial data and strategic plans for all areas of the Company’s business, and the Participant has a business

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relationship with most if not all of the Company’s major customers and it is an important part of the Participant’s responsibilities to cultivate and further those relationships. The Participant acknowledges that this information was gained by virtue of his employment at the Company, is confidential and secret information from which the Company draws economic value, actual or potential, from its not being generally known to persons outside the Company, is information which the Company has taken reasonable measures to preserve its confidentiality, and could not easily be duplicated by others, and is information which the Company required considerable time and effort to develop. The Participant further acknowledges that the misuse, misappropriation or disclosure of this information could cause irreparable harm to the Company, both during and after the term of the Participant’s employment.

(b) The Participant agrees that he will not, within the Continental United States, directly or indirectly, own, manage, operate, join, control, be employed by or participate in ownership, management, operation or control of, provide consulting services to, or be connected in any manner with any business that competes with the Company or any of its food retailing or food wholesaling affiliates; provided, however, that this subparagraph (b) shall not apply after a “Change of Control” as defined in the Severance Agreement. The Participant shall retain the right to seek the written approval of the Company’s Chief Executive Officer to waive the requirements of this Paragraph 6(b) with respect to any particular activity in which the Participant seeks to engage, which approval shall be granted or denied based upon the Company’s reasonable desire to protect its business interest, but in its sole discretion.

(c) The Participant agrees that during his employment and at all times thereafter the Participant will hold in a fiduciary capacity for the benefit of the Company and will not divulge or disclose, directly or indirectly, to any other person, firm or business, all confidential or proprietary information, knowledge and data (including, but not limited to, processes, programs, trade “know how,” ideas, details of contracts, marketing plans, strategies, business development techniques, business acquisition plans, personnel plans, pricing practices and business methods and practices) relating in any way to the business of the Company, its affiliates, customers, suppliers, joint ventures, licensors, licensees, distributors or other persons and entities with whom the Company does business (“Confidential Data”), except upon the Company’s written consent or as required by the Participant’s duties with the Company, for so long as such Confidential Data remains confidential and all such Confidential Data, together with all copies thereof and notes and other references thereto, shall remain the sole property of the Company.

(d) The Participant agrees that the Participant will not either directly, or in concert with others, recruit, solicit or induce, or attempt to induce, any employee or employees of the Company or any of its subsidiaries to terminate their employment with the Company and/or become associated with another employer. The Participant further agrees that the Participant will not either directly, or in concert with others, solicit, divert or take away or attempt to divert or take away, the business or patronage of any of the customers or accounts which were contacted, solicited or served by the Company while the Participant was employed with the Company.

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(e) The Participant agrees not to make disparaging statements about the Company, its officers, directors, agents, employees, products or services which are false or misleading.

(f) The Participant agrees that except as otherwise provided in Section 6(b) above, the foregoing covenants contained in this Section 6 shall continue in effect:

(i) For two (2) years after the Participant’s termination (for any reason whatsoever) of employment with the Company in the event such termination occurs prior to April 9, 2008; or

(ii) Until the later of age sixty (60) or one (1) year after the Participant’s termination (for any reason whatsoever) of employment with the Company in the event such termination occurs after April 8, 2008.

(g) The Participant acknowledges that damages, which may arise from a breach of any of the foregoing covenants contained in this Section 6, are impossible to ascertain or prove with certainty. If any covenant in this Section 6 is breached, all Restricted Stock Units shall be forfeited, and all associated rights shall lapse and be terminated, and in addition to other legal remedies which may be available, the Company shall be entitled to an immediate injunction from a court of competent jurisdiction to end such breach, without further proof of damage.

(h) To the extent any provision of this Section of the Agreement shall be determined to be invalid or unenforceable, such provision shall be deleted from this Agreement, and the validity and enforceability of the remainder of such provision and of this Agreement shall be unaffected. In furtherance of and not in limitation of the foregoing, the Participant expressly agrees that should the duration of or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid or enforceable under applicable law, then such provision shall be construed to cover only that duration, extent or activities that may validly or enforceably be covered. The Participant acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement shall be construed in a manner that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.

(i) Nothing in this Section 6 shall amend, limit, terminate or replace any other confidentiality or non-compete obligation that the Participant may have in any other agreement with the Company.

7. Transferability

The Restricted Stock Units shall not be transferable otherwise than by will or the laws of descent and distribution. More particularly (but without limiting the generality of the foregoing), the Restricted Stock Units may not be assigned, transferred (except as aforesaid), pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted assignment, transfer, pledge, hypothecation or other disposition of the Restricted Stock Units contrary to the provisions hereof and the levy of an execution, attachment or similar process upon the Restricted Stock Units shall be void.

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8. Taxes

(a) The Participant acknowledges that he will consult with his personal tax advisor regarding the income tax consequences of the vesting and payment of the Restricted Stock Units or any other matters related to this Agreement. In order to comply with all applicable federal or state income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal or state payroll, withholding, income or other taxes, which are the sole and absolute responsibility of a Participant, are withheld or collected from the Participant.

(b) The Participant may elect to satisfy any federal and state income tax withholding obligations arising from the payment of the Restricted Stock Units pursuant to Section 4 hereof by (i) having the Company withhold a portion of the shares of Common Stock otherwise to be delivered in payment of the Restricted Stock Units having a Fair Market Value (as defined in the Plan) equal to the amount of federal and state income taxes required to be withheld in connection with such payment or (ii) delivering to the Company shares of Common Stock other than the shares issuable in connection with the payment of the Restricted Stock Units having a Fair Market Value equal to such taxes. The Participant may elect to satisfy any federal and state income tax withholding obligations arising prior to the payment of the Restricted Stock Units pursuant to Section 4 hereof by delivering to the Company shares of Common Stock other than the shares issuable in payment of the Restricted Stock Units having a Fair Market Value equal to such taxes. Any election must be made on or before the date that the amount of taxes to be withheld is determined.

9. No Right to Employment

Nothing in this Agreement or in the Plan shall be construed as giving the Participant any right to be retained in the employ of the Company or any subsidiary of the Company, nor shall this Agreement or the Plan affect in any way the right of the Company or a subsidiary of the Company to terminate the Participant’s employment at any time, with or without cause.

10. General Provisions

(a) The Restricted Stock Units are granted pursuant to the Plan and are subject to the terms and conditions contained therein. A copy of the Plan is available to the Participant upon request.

(b) This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and shall supersede any prior expressions of intent or understanding with respect to the Restricted Stock Units.

(c) This Agreement is subject to all applicable laws and the applicable rules and regulations of any governmental agencies or national securities exchanges. The Company shall not be required to issue or deliver any shares of Common Stock in payment of the Restricted Stock Units until the requirements of any federal or state securities laws, rules or regulations or other laws or rules (including the rules of the New York Stock Exchange) as may be determined by the Company to be applicable are satisfied.

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(d) The validity, construction and effect of this Agreement, and any rules and regulations relating to this Agreement, shall be determined in accordance with the laws of the State of Minnesota (other than its law respecting choice of law), except to the extent the general corporation law of the State of Delaware would be applicable.

(e) If any provision of this Agreement is or becomes or is deemed to be invalid, illegal or unenforceable in any applicable jurisdiction, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the purpose or intent of this Agreement, such provision shall be stricken and the remainder of this Agreement shall remain in full force and effect.

(f) The headings in this Agreement are for convenience of reference only and shall not be deemed in any way to be material or relevant to the construction or interpretation of this Agreement or any provision hereof.

IN WITNESS WHEREOF, the Company and the Participant have signed this Agreement as of the date first above written.

SUPERVALU INC.
By:	/s/ Jeffrey Noddle
	Jeffrey Noddle
Its:	Chairman and Chief Executive Officer
PARTICIPANT
/s/ Michael L. Jackson
Michael L. Jackson

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EX-12.1

Exhibit 12.1

SUPERVALU INC.

Ratio of Earnings to Fixed Charges

(unaudited)

	Fiscal Year End			Fiscal Year End			Fiscal Year End			Fiscal Year End			Fiscal Year End
	February 28, 2004			February 22, 2003			February 23, 2002			February 24, 2001			February 26, 2000
	(In thousands, except ratios)
Earnings before income taxes	$	454,880		$	408,004		$	331,998		$	139,590		$	445,393
Less undistributed earnings of less than fifty percent owned affiliates		(15,793	)		(16,368	)		(13,450	)		(9,429	)		(6,605	)
Earnings before income taxes		439,087			391,636			318,548			130,161			438,788
Interest expense		165,581			182,499			194,294			212,898			154,482
Interest on operating leases		44,280			44,864			35,971			29,047			23,838
Subtotal		648,948			618,999			548,813			372,106			617,108
Total fixed charges	$	209,861		$	227,363		$	230,265		$	241,945		$	178,320
Ratio of earnings to fixed charges		3.09			2.72			2.38			1.54			3.46

EX-21.1

EXHIBIT 21.1

SUPERVALU INC.

Subsidiaries

As of April 1, 2004

(All are Subsidiary Corporations 100% Owned Directly or Indirectly, Except as Noted)

	JURISDICTION OF ORGANIZATION	PERCENTAGE OF VOTING SECURITIES OWNED BY IMMEDIATE PARENT
SUPERVALU INC.
Advantage Logistics USA, Inc.	Delaware	100	%
Advantage Logistics USA West L.L.C.	Delaware Limited Liability Company	100	%
Arden Hills 2003 L.L.C.	Delaware Limited Liability Company	90	%
Blaine North 1996 L.L.C.	Delaware Limited Liability Company	70	%
Bloomington 1998 L.L.C.	Delaware Limited Liability Company	40	%
Burnsville 1998 L.L.C.	Delaware Limited Liability Company	77.5	%
Coon Rapids 2002 L.L.C.	Delaware Limited Liability Company	64	%
Diamond Lake 1994 L.L.C.	Delaware Limited Liability Company	25	%
Forest Lake 2000 L.L.C.	Delaware Limited Liability Company	65	%
Fridley 1998 L.L.C.	Delaware Limited Liability Company	74.5	%
Hastings 2002 L.L.C.	Delaware Limited Liability Company	51.0	%
Inver Grove Heights 2001 L.L.C.	Delaware Limited Liability Company	66.0	%
Keltsch Bros., Inc.	Indiana	100	%
Maplewood East 1996 L.L.C.	Delaware Limited Liability Company	70	%
Great Valu LLC	Virginia Limited Liability Company	100	%
Monticello 1998 L.L.C.	Delaware Limited Liability Company	90	%
NAFTA Industries Consolidated, Inc.	Texas	51	%
NAFTA Industries, Ltd.	Texas Limited Partnership	51	%
International Data, LLC	Indiana Limited Liability Company	50	%
NC&T Supermarkets, Inc.	Ohio	100	%
Nevada Bond Investment Corp.	Nevada	100	%
Northfield 2002 L.L.C.	Delaware	51	%
Planmark Architecture of Oregon, P.C.	Oregon	100	%
Planmark, Inc.	Minnesota	100	%
Plymouth 1998 L.L.C.	Delaware Limited Liability Company	62.5	%
Preferred Products, Inc.	Minnesota	100	%
Richfood Holdings, Inc.	Delaware	100	%
Market Funding, Inc.	Delaware	100	%
Retail Licensing Corporation	Delaware	100	%
Richfood, Inc.	Virginia	100	%
Bridgeview Warehouse LLC	Delaware Limited Liability Company	100	%
75th Avenue Headquarters LLC	Delaware Limited Liability Company	100	%
Cabot Morgan Real Estate Company	Delaware	100	%
California Ontario Warehouse LLC	Delaware Limited Liability Company	100	%
Dart Group Financial Corporation	Delaware	100	%
Discount Books East, Inc.	Delaware	100	%
Eastern Region Management Corporation	Virginia	100	%
Great Valu LLC	Virginia Limited Liability Company	100	%
GWM Holdings, Inc.	Virginia	100	%
Market Brands, Inc.	Delaware	100	%
Market Improvement Corporation	Virginia	100	%
Market Insurance Agency, Inc.	Virginia	100	%
Market Leasing Company	Virginia	100	%
Pennsy Warehouse Leasing Corporation	Delaware	100	%
Pennsy Drive Warehouses LLC	Delaware	100	%
Rich-Temps, Inc.	Virginia	100	%
Rotelle Management, Inc.	Pennsylvania	100	%
SFW Holding Corp.	Delaware	100	%
Shoppers Food Warehouse Corporation	Delaware	100	%
RBC Corporation	Maryland	100	%

	JURISDICTION OF ORGANIZATION	PERCENTAGE OF VOTING SECURITIES OWNED BY IMMEDIATE PARENT
SFW DC Corp.	District of Columbia	100	%
SFW Investment Corporation	Delaware	100	%
Spring House Leasing, Inc.	Pennsylvania	100	%
Super Rite Foods, Inc.	Delaware	100	%
FF Acquisition LLC	Virginia Limited Liability Company	100	%
FF Construction L.L.C.	Virginia Limited Liability Company	100	%
Foodarama LLC	Delaware Limited Liability Company	100	%
Foodarama, Inc.	Maryland	100	%
Foodarama Group, Inc.	Maryland	100	%
Midway Markets of Delaware, Inc.	Delaware	100	%
Food-A-Rama G.U., Inc.	Maryland	100	%
Oxon Run, Inc.		100	%
SRF Subsidiary Corporation	Delaware	100	%
Richfood Procurement LLC	Virginia Limited Liability Company	100	%
Risk Planners Agency of Ohio, Inc.	Ohio	100	%
Risk Planners of Mississippi, Inc.	Mississippi	100	%
Risk Planners of Pennsylvania, Inc.	Pennsylvania	100	%
Risk Planners, Inc.	Minnesota	100	%
Risk Planners of Illinois, Inc.	Illinois	100	%
Risk Planners of Montana, Inc.	Montana	100	%
Risk Planners of Washington, Inc.	Washington	100	%
Savage 2002 L.L.C.	Delaware Limited Liability Company	51	%
Shakopee 1997 L.L.C.	Delaware Limited Liability Company	25	%
Shorewood 2001 L.L.C.	Delaware Limited Liability Company	55	%
Silver Lake 1996 L.L.C.	Delaware Limited Liability Company	51	%
SUPERVALU Finance, Inc.	Minnesota	100	%
SUPERVALU Holdings, Inc.	Missouri	0.1	%
SUPERVALU Management Corp.	Delaware	100	%
SUPERVALU Pharmacies, Inc.	Minnesota	100	%
SUPERVALU Receivables, Inc.	Delaware	100	%
SUPERVALU Transportation, Inc.	Minnesota	100	%
SUVACO Insurance International, Ltd.	Islands of Bermuda	100	%
Sweet Life Products Co., Inc.	New York	75	%
Valu Ventures, Inc.	Minnesota	100	%
Valu Ventures 2, Inc.	Indiana	100	%
SUPERVALU Terre Haute Limited Partnership	Indiana Limited Partnership	100	%
Western Dairy Distributors, Inc.	Colorado	100	%
Supermarket Operators of America Inc.	Delaware	100	%
Advantage Logistics - Southeast, Inc.	Alabama	100	%
Clyde Evans Markets, Inc.	Ohio	100	%
Scott’s Food Stores, Inc.	Indiana	100	%
SV Ventures*	Indiana General Partnership	50	%
SUPERVALU Receivables Funding Corporation	Delaware	100	%
SUPERVALU Holdings, Inc.	Missouri	99.5	%
Advantage Logistics Southwest, Inc.	Arizona	100	%
Advantage Logistics – PA LLC	Pennsylvania Limited Liability Company	100	%
Advantage Logistics USA East L.L.C.	Delaware Limited Liability Company	100	%
Airway Redevelopment Corporation	Missouri	100	%
Augsburger’s, Inc.	Indiana	100	%
Butson’s Enterprises, Inc.	New Hampshire	100	%
Butson’s Enterprises of
Massachusetts, Inc.	Massachusettts	100	%
Butson’s Enterprises of Vermont, Inc.	Vermont	100	%
Keatherly, Inc.	New Hampshire	100	%

2

	JURISDICTION OF ORGANIZATION	PERCENTAGE OF VOTING SECURITIES OWNED BY IMMEDIATE PARENT
SUPERVALU Holdings, Inc.	Missouri	0.1	%
Peoples Market, Incorporated	New Hampshire	100	%
Violette’s Supermarkets, Inc.	New Hampshire	100	%
East Main Development, Inc.	Rhode Island	100	%
GM Distributing, Inc.	California	100	%
John Alden Industries, Inc.	Rhode Island	100	%
Livonia Holding Company, Inc.	Michigan	100	%
Foodland Distributors	Michigan General Partnership	50	%
Mohr Developers, Inc.	Missouri	100	%
Mohr Distributors of Litchfield, Inc.	Illinois	100	%
Moran Foods, Inc.	Missouri	100	%
Deals-Nothing Over A Dollar, L.L.C.	Missouri Limited Liability Company	100	%
Save-A-Lot Food Stores, Inc.	Missouri	100	%
SUPERVALU Holdings, Inc.	Missouri	0.1	%
Lot 18 Redevelopment Corp.	Missouri	100	%
R&M Kenosha LLC	Delaware	100	%
Rostraver Township L.L.C.	Pennsylvania	85	%
Rostraver Township	Pennsylvania Limited Partnership	1	%
Shop ‘N Save Warehouse Foods, Inc.	Missouri	100	%
Shop ‘N Save St. Louis, Inc.	Missouri	100	%
SUPERVALU Holdings, Inc.	Missouri	0.1	%
WSI Satellite, Inc.	Missouri	100	%
SUPERVALU Holdings – PA LLC	Pennsylvania Limited Liability Company	100	%
SV Markets, Inc.	Ohio	100	%
SV Ventures*	Indiana General Partnership	50	%
SUPERVALU Holdings, Inc.	Missouri	0.1	%
SVH Holding, Inc.	Delaware	100	%
SVH Realty, Inc.	Delaware	100	%
TC Michigan LLC	Michigan Limited Liability Company	100	%
Total Insurance Marketing Enterprises, Inc.	Pennsylvania	100	%
Ultra Foods, Inc.	New Jersey	100	%
Verona Road Associates, Inc.	Pennsylvania	100	%
WC&V Supermarkets, Inc.	Vermont	100	%
Wetterau Finance Co.	Missouri	100	%
Wetterau Insurance Co. Ltd.	Bermuda	100	%

* SV Ventures is a general partnership between SUPERVALU Holdings, Inc. and Scott’s Food Stores, Inc. each of which holds a 50% interest. Both general partners are direct subsidiaries of Supermarket Operators of America, Inc.

3

EX-23.1

Exhibit 23.1

Independent Auditors’ Consent

The Board of Directors

SUPERVALU INC.:

We consent to incorporation by reference in the Registration Statements No. 33-16934, No. 33-50071, No. 333-10151, No. 333-24813, No. 333-61365, No. 333-72851, No. 333-89157, No. 333-32354, No. 333-32356, No. 333-44570, No. 333-100912, No. 333-100913, No. 333-100915, No. 333-100917 and No. 333-100919 on Form S-8 and No. 33-56415, No. 333-94965, No. 333-43538 and No. 333-81252 on Form S-3 of SUPERVALU INC., of our report dated April 14, 2004 (except as to the second paragraph of the note to the consolidated financial statements entitled “Subsequent Events,” which is as of May 3, 2004), relating to the consolidated balance sheets of SUPERVALU INC. and subsidiaries as of February 28, 2004 and February 22, 2003, and the related consolidated statements of earnings, stockholders’ equity, and cash flows, and the related consolidated financial statement schedule for each of the fiscal years in the three-year period ended February 28, 2004, which report appears in the 2004 annual report on Form 10-K of SUPERVALU INC.

As discussed in the note entitled “Summary of Significant Accounting Policies” to the consolidated financial statements, the Company adopted the provisions of Statement of Financial Accounting Standards No. 142, “Goodwill and other Intangible Assets”, on February 24, 2002.

/s/    KPMG LLP

Minneapolis, Minnesota

May 4, 2004

EX-24.1

Exhibit 24.1

POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints Jeffrey Noddle, David L. Boehnen, John P. Breedlove and Warren E. Simpson, and each of them, the undersigned’s true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for the undersigned and in such person’s name, place and stead, in any and all capacities (including the undersigned’s capacity as Director and/or Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer or any other officer of SUPERVALU INC.), to sign SUPERVALU’s Annual Report on Form 10-K to be filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, for the fiscal year ended February 28, 2004, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in or about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, this Power of Attorney has been signed as of the 30th day of April, 2004, by the following persons:

/s/ Irwin Cohen	/s/ Pamela K. Knous
Irwin Cohen	Pamela K. Knous
/s/ Ronald E. Daly	/s/ Richard L. Knowlton
Ronald E. Daly	Richard L. Knowlton
/s/ Lawrence A. Del Santo	/s/ Charles M. Lillis
Lawrence A. Del Santo	Charles M. Lillis
/s/ Susan E. Engel	/s/ Jeffrey Noddle
Susan E. Engel	Jeffrey Noddle
/s/ Edwin C. Gage	/s/ Harriet Perlmutter
Edwin C. Gage	Harriet Perlmutter
/s/ Garnett L. Keith, Jr.	/s/ Marissa Peterson
Garnett L. Keith, Jr.	Marissa Peterson
	/s/ Steven S. Rogers
	Steven S. Rogers

EX-31.1

Exhibit 31.1

Certification Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

I, Jeffrey Noddle, certify that:

1. I have reviewed this annual report on Form 10-K of SUPERVALU INC. for the fiscal year ended February 28, 2004;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2004	/s/    JEFFREY NODDLE
	Chief Executive Officer and President

EX-31.2

Exhibit 31.2

Certification Pursuant to Section 302 of the

Sarbanes-Oxley Act of 2002

I, Pamela K. Knous, certify that:

1. I have reviewed this annual report on Form 10-K of SUPERVALU INC. for the fiscal year ended February 28, 2004;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 4, 2004	/s/    PAMELA K. KNOUS
	Executive Vice President, Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification Pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of SUPERVALU INC. (the “company”) certifies that the annual report on Form 10-K of the company for the fiscal year ended February 28, 2004, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in that Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the company for the period and as of the dates covered thereby.

A signed original of this written statement required by Section 906 has been provided to SUPERVALU INC. and will be retained by SUPERVALU INC. and furnished to the Securities and Exchange Commission or its staff upon request.

Dated: May 4, 2004	/s/    JEFFREY NODDLE
	Jeffrey Noddle Chief Executive Officer and President

EX-32.2

Exhibit 32.2

Certification Pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of SUPERVALU INC. (the “company”) certifies that the annual report on Form 10-K of the company for the fiscal year ended February 28, 2004, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and the information contained in that Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the company for the period and as of the dates covered thereby.

A signed original of this written statement required by Section 906 has been provided to SUPERVALU INC. and will be retained by SUPERVALU INC. and furnished to the Securities and Exchange Commission or its staff upon request.

Dated: May 4, 2004	/s/    PAMELA K. KNOUS
	Pamela K. Knous Executive Vice President, Chief Financial Officer