GRAND UNION WEIGHS CLOSING TWO DEPOTS

LISA A. TIBBITTS

WAYNE, N.J. -- Grand Union Co. here is considering closing two distribution centers and expanding its supply arrangement with C&S Wholesale Grocers, Brattleboro, Vt.

Such a move would mean C&S would become the primary supplier for the chain's 231 stores. Grand Union has been primarily a self-distributing operator with full-line warehouses. Earlier this year, C&S picked up the business of Grand Union's 127 Northern region stores after the retailer closed a warehouse in Waterford, N.Y. If Grand Union decided to close the two distribution facilities, it would be left with a general merchandise and health and beauty care distribution center in Montgomery, N.Y.

C&S did not return calls for comment. Don Vallaincourt, vice president of corporate consumer affairs for the chain, told SN the two sites in question are a 250,000-square-foot facility in Carlstadt, N.J., and a 650,000-square-foot facility in Mount Kisco, N.Y. Grand Union is currently attempting to renegotiate contracts with union workers at those sites in an attempt to cut costs.

"We had received a proposal from C&S to handle distribution for our Mount Kisco and Carlstadt distribution centers, which handle 104 stores in our New York region. That proposal would save us in excess of $13 million a year," Vallaincourt told SN.

Grand Union has presented Teamsters union officials with "warn notices," he said. According to federal law, the company was required to give advance notice to parties that would be affected by the potential closures.

In the notices, Grand Union said the distribution centers could close Jan. 7, but Vallaincourt cautioned that that tentative closure date could be rescinded or extended depending "upon the nature of the discussions" with the unions. However, some union officials say Grand Union's terms are unreasonable.

"What they're saying to us is that it's not definite, let's negotiate, give us an offer, but there's no way we can match it [the $13 million savings from C&S's proposal]," said Eddy Doyle, president of Teamsters Local 456, which represents workers at the Mount Kisco facility. "They have a right to close their facility by law and they're just going to give our jobs away to C&S."

C&S is a non-union operator, according to Teamsters officials.

Grand Union has decided not to close its Montgomery, N.Y., warehouse. Nevertheless, the chain has laid off an unspecified number of workers there. The warehouse lost a significant portion of its volume when Penn Traffic Co., Syracuse, N.Y., terminated a supply agreement with Grand Union.

The agreement between Grand Union and Penn Traffic was ended in the wake of Grand Union's Chapter 11 bankruptcy protection reorganization. Grand Union emerged from Chapter 11 in June. Although he would not put a dollar figure on the lost volume in the Montgomery facility, Vallaincourt said, "Obviously, it's substantial because it was the loss of over 200 stores."

Grand Union is also trying to renegotiate contracts with workers at this facility, said Elmore Schueler, secretary-treasurer of Teamsters Local 445, which represents workers there. He said some 120 workers have been laid off since Penn Traffic decided to end the arrangement.

Although he could not give specific numbers, Vallaincourt said he did not think those layoff figures were accurate.

"What we did is, because of decreased volume, we made adjustments in labor at the Montgomery distribution center," Vallaincourt said.

Schueler claimed that Grand Union is searching for another customer to fill Penn Traffic's place. "It's a very big facility. It's operating at less than 50% of its capacity and that shows you that it can't last that way," he said.

Vallaincourt would not comment on the company's potential search for another revenue source but he said that even if the New York and New Jersey distribution centers are closed, Grand Union will not close the Montgomery facility.

In another development, Price Chopper Supermarkets, Schenectady, N.Y., is considering purchasing the Waterford, N.Y., warehouse that was vacated by Grand Union earlier this year. Grand Union leased the facility and its owner could not be determined.

"Price Chopper has some interest [in the site] but no deal has been reached yet," said Barbara Page, a Price Chopper spokeswoman.