EDISON, N.J. -- For Twin County Grocers here and its retail customers, the future is on the line.
With efforts to sell the company apparently dead, Twin County directors reportedly met last week with at least two other wholesalers to find alternative sources of supply for its Foodtown members while some of the cooperative's larger members have begun seeking alternative sources on their own.
Those actions preceded the reported shutdown late last week of Twin County's perishables distribution center and the pending shutdown in late January of its dry groceries facility, observers told SN.
According to one observer, "While Twin County's customer base is still viable, there's a strong possibility the company is financially unable to sustain its operations." Exacerbating the situation for the Foodtown operators is a boycott at a handful of stores by the Teamsters union, which said it is trying to discourage deliveries to protest the inability of the company and the union to reach agreement on a termination package. Officials at Twin County were unavailable for comment last week.
Twin County is a cooperative with approximately 30 members operating about 125 supermarkets trading under the name Foodtown in New Jersey and New York; D'Agostino Supermarkets in New York, and Grande stores in Puerto Rico, with annual sales of approximately $1 billion.
The company began exploring strategic alternatives -- including a possible partnership, merger or sale -- last spring in a move the company said was "somewhat related" to an alleged embezzlement scheme, in which three former Twin County officials and seven others are accused of stealing $12.7 million from the company between 1993 and 1997. The company reportedly signed a tentative agreement late last summer, pending a due diligence review, with White Rose, Carteret, N.J., under which White Rose would have acquired Twin County's wholesale business. However, talks between the two companies have reportedly broken down, and Twin County has reportedly begun exploring other contingencies, observers said last week.
They said the company met separately last week with representatives of both White Rose and Bozzuto's, Cheshire, Conn., to supply Twin County's customer base; observers have also said Richfood Holdings, Richmond, Va., is a potential alternative supplier.
John Stokely, chairman of Richfood, declined comment last week; representatives of White Rose and Bozzuto's couldn't be reached last week.
Observers said Twin County was scheduled to close its perishables warehouse last Friday. They also said the company has stopped accepting deliveries at its dry groceries warehouse and plans to close that facility Jan. 27.
As a result, several Twin County customers have already begun buying from other sources.
A spokesman for Nicholas Markets, Haledon, N.J., said the company has switched its buying to Bozzuto's. In addition, he said David Maniaci, president and chief executive of Nicholas, has resigned from Twin County's board.
Observers said D'Agostino Supermarkets, Larchmont, N.Y., has switched to White Rose; Norkus Enterprises, Point Pleasant Beach, N.J., is buying from Richfood, and Food Circus Supermarkets, Middletown, N.J. -- whose owner, Joseph Azzolina, is chairman of Twin County's board -- is also buying from other sources.
Nicholas D'Agostino Jr., chairman and CEO of D'Agostino, declined comment. Jerry Norkus, owner of Norkus Enterprises, and Azzolina could not be reached for comment last week.
Joe Tramontana, secretary-treasurer of Teamsters Local 863, based in Mountainside, N.J., told SN his union set up pickets at about a dozen Foodtown stores last Monday "because the company is trying to screw us on severance pay" in negotiations to terminate its contracts.
"Once the perishables warehouse closes and our 61 members there are laid off, we'll be able to extend the pickets to most of the other Foodtown locations," he added.
Harvey Whille, president of United Food and Commercial Workers Union Local 1262, based in Clifton, N.J., said the Teamster pickets at the stores could create problems for retail clerks, "since any loss of store volume means the employer needs less hours for service, and that could lead to layoffs of my members."
However, he said he understands why the Teamsters are taking the action they have, "and I understand the anxiety of their members, who have a long-term relationship with Twin County and now stand to lose their jobs."