C&S Cites A&P's Sales Woes

ELLIOT ZWIEBACH

KEENE, N.H. — C&S Wholesale Grocers here reportedly told bondholders it is concerned about the possible loss of business from two major customers, though it anticipates making up some of the shortfall through new business.

C&S officials could not be reached for comment. Media were prohibited from monitoring the call with bondholders, which took place last month.

According to sources who were on the call, C&S said third-quarter sales were flat at $4.8 billion, while net earnings rose to $40 million, compared with $9 million a year ago, following of a settlement with Bi-Lo, Mauldin, S.C., during that chain's Chapter 11 process.

Bondholders said C&S expressed concern during the call about lower sales levels at A&P, Montvale, N.J., whose business represents approximately 20% of the wholesaler's volume.

The company also reportedly said it expects Minneapolis-based Supervalu, which owns Shaw's Supermarkets, West Bridgewater, Mass., to begin supplying groceries and frozen foods to the chain once the C&S contract with Shaw's expires in September, though C&S said it will continue to supply dairy and delicatessen categories through 2011 under a separate contract.

C&S said it expects to balance the lost business at Shaw's with wholesale volume it's adding from Giant Foods, Carlisle, Pa., the Ahold division that will become one of its customers, industry sources said.