WAYNE, N.J. -- Grand Union Co. here last week unveiled a major organizational restructuring plan that it says will save the company about $5 million and make it more responsive to the needs of individual stores.
The move is another in a string of big changes Grand Union has made since emerging from Chapter 11 bankruptcy protection in June. Last week's plan called for:
Centralizing administrative and support functions as well as forming a centralized grocery merchandising department at corporate headquarters here, moves made possible by the closure of two regional offices.
Decentralizing store support services through the creation of five "area teams" to handle the needs of stores in each of the company's five new geographic areas.
The $5 million in savings will come from the elimination of administrative overhead and will allow the company "to focus our resources much more effectively," said Joseph J. McCaig, president and chief executive officer, in a statement.
"By taking these costs out of the system in areas the customer doesn't see, we will be able to reinvest those savings to strengthen areas the customer does see . . . [such as] pricing, sales programs and store service levels, to drive our sales growth," McCaig continued.
According to a statement from Chairman Roger Stangeland, these changes are part of the chain's long-range strategic plan.
Donald Vaillancourt, corporate vice president of corporate consumer affairs, told SN these changes will be completed by the beginning of the company's new fiscal year April 1. Although the changes may seem to some to be happening very quickly, Vaillancourt noted that this reorganization has been in the works for the last six months.
Grand Union plans to close its Northern Region office in Colonie, N.Y., and reallocate the space at its New York Region office, which shares facilities with its headquarters here. About 56 people at the Colonie offices will be laid off.
A variety of duties that were previously handled by the regional offices have been centralized at headquarters as well, including the grocery merchandising function and related pricing and marketing functions.
Grand Union also has created at least two new departments -- sales and marketing, and remerchandising -- which will be fully staffed and operated out of the Wayne, N.J., headquarters.
To improve merchandising at the store level, the chain has established five separate operating areas, each with an area vice president and a small staff. The staff's purpose is "to work with our store associates to be sure that we are providing excellent customer service and store conditions as well as effective execution of our merchandising plans," McCaig said.
The Hudson Valley area, based in Clifton Park, N.Y., headed by John McLaughlin, who also holds the title of corporate vice president.