GREG GATTUSO WESTBURY, N.Y. -- King Kullen Grocery Co. here announced last week it will close its Long Island warehouse this fall and switch to an outside wholesaler in an effort to remain competitive with nationally and internationally owned chains on its home turf.
will be eliminated, the company said.
Bernard D. King, King Kullen president and chief operating officer, said the decision came after "months of study and deliberation." He said switching to an outside wholesaler would help it compete with other chains and ultimately safeguard the jobs of King Kullen's 4,400 other employees.
For Bozzuto's, the new business reflects a strategy that is becoming increasingly popular among wholesalers: targeting regional medium-size and small chains -- in addition to a base of independents -- eager to benefit from a large distributor's economy of scale. Bozzuto's, with its 600,000-square-foot distribution facility, services more than 250 retail clients within a 275-mile radius throughout New England and parts of New York, New Jersey and Pennsylvania, split about evenly between supermarkets and limited-assortment stores.
The wholesaler's roster of customers already includes several independent retailers on Long Island under the IGA banner, said Jim Dorcy, vice president of advertising and marketing. The King Kullen stores, which range from 80 to 110 miles from Bozzuto's base, are well within its reach, he added.
He said the information systems personnel from both companies are working closely to ensure a smooth transition.
Dorcy said recent growth at Bozzuto's, which includes the addition of King Kullen's business, has created about 200 warehouse and driver positions at the non-union company. However, King Kullen's announcement "embittered, stunned and devastated" the warehouse employees, said Gary LaBarbera, international trustee for Teamsters Local 282. LaBarbera said the union was never consulted about the possibility of the closing.
"It's not about saving jobs," he said. "It's about evading the unions and employees, which have a collective bargaining agreement with the company.
"We, as a union, have increased productivity 40% over the last two years," LaBarbera said. "We have done everything we can to make the operation more efficient. If they had told us there was a problem, we would have come up with other creative ways to improve the warehouse."
King Kullen has had collective bargaining agreements in place with its employees for 45 years, LaBarbera said. Local 282's current contract expires Aug. 31, but the union has no intention of renewing it for the final month the warehouse is in operation.
LaBarbera said the union will try to bring political and economic pressure on the company in the next several weeks to find a way to retain the warehouse employees.
As of last week, there were no plans to find jobs for wholesale workers in the company's retail operations, said Lloyd Singer, an outside spokesman for King Kullen.
However, the affected employees will have an opportunity to interview with Bozzuto's, he said. However, there is little chance that the warehouse employees, many of whom have worked at the facility for more than 20 years, would uproot their families to take a non-union job in another state, said LaBarbera.
Meanwhile, King Kullen has not decided the fate of the warehouse, which measures 120,000 square feet and has been in use since 1962.
King Kullen said it is looking to Bozzuto's to achieve the purchasing clout and distribution expertise needed to offer customers more competitive pricing.
King Kullen said its affiliation with Bozzuto's will also allow it to expand its merchandise selection.
King Kullen also said Long Island's high electrical and real estate costs were prohibitive. "King Kullen had looked around at other wholesalers, and there was not another one large enough on Long Island to handle the volume that the company does," said Singer
