MECHANICSVILLE, Va. -- Richfood Holdings here last week entered a five-year supply agreement with Magruder, Rockville, Md.
The wholesaler, through its distribution center here, will become the chain's primary supplier of dry grocery, meats, frozen food, dairy and some produce and health and beauty care items. It already supplies Magruder with some dairy and food products.
With the deal, Magruder drops Supervalu's Mid-Atlantic division, Temple, Pa., as its primary wholesaler. The chain, with 12 supermarkets in metro Washington, had 1995 sales of about $120 million. "The Magruder's business is a great addition to our base of customers. Their locations are all strategically located in the Washington area, which strengthens our position in this important Mid-Atlantic market," said Donald D. Bennett, Richfood chairman and chief executive officer.
Richfood was Magruder's longtime supplier until 1986, when Supervalu arranged a six-store acquisition for the chain, which, in return, signed a 10-year supply contract, Gary Bortnick, a Magruder vice president, told SN. The contract expired earlier this year. "We had a good relationship with Supervalu for 10 and a half years. They treated us well and supplied us well," Bortnick said. "But we felt in this part of the market, Richfood, which is regional, is a little bit more aggressive and understands the marketplace a little better."
Richfood and Supervalu have faced off for Mid-Atlantic supply contracts in recent months. In late summer, Richfood inked a deal with a Supervalu customer, Boyer's, a 15-unit operator in Orwigsburg, Pa. About the same time, Valu Food, a 17-store Baltimore chain, switched from Richfood to Supervalu.