SuperValu Inc. is exploring a separation of its Save-A-Lot business, and as part of that process it has begun preparations to allow for a possible spin-off of Save-A-Lot into a stand-alone, publicly traded company.

“Save-A-Lot is a leading national hard discount retailer with over 1,300 total stores, comprised of approximately 430 corporate stores and approximately 900 stores operated by licensee owners, and we believe Save-A-Lot has significant growth potential," Sam Duncan, president and chief executive officer, said in a press release. "Over the last two-and-a-half years, Save-A-Lot has repositioned its brand, refocused its efforts on fresh produce and meat, and remerchandised its stores and product offerings to better appeal to a broader group of customers.

"Today’s announcement reflects our commitment to continuing to explore ways to maximize value for our shareholders," he said. "We believe a separation of our Save-A-Lot business could allow Save-A-Lot, our Independent Business and our Retail Food banners to better focus on their respective operations, and pursue strategies specific to their business characteristics and growth potentials, for the benefit of our shareholders, customers, licensees and employees.”

The news came alongside the announcement of the company's Q1 sales results for fiscal 2016.

First quarter net sales were $5.41 billion compared to $5.26 billion last year, an increase of $143 million or 2.7 percent. Save-A-Lot network identical store sales were positive 0.6 percent. Identical store sales for corporate stores within the Save-A-Lot network were positive 2.8 percent. Retail Food segment identical store sales were negative 0.3 percent. Total sales within the Independent Business segment increased 1.7 percent. Fees earned under transition services agreements in the first quarter were $64 million compared to $58 million last year.

"We delivered sales increases across all three business segments and managed our costs very well in this first quarter," Duncan said. "I'm pleased with our bottom line and ability to manage to these results in spite of softer sales at Save-A-Lot and in our Retail Food stores. We have plans in place and operationally we remain well positioned."

No specific timetable for a separation has been set and there can be no assurance that a separation of Save-A-Lot will be completed or that any other change in the company’s overall structure or business model will occur.