RESTRUCTURING, COST-CUTTING ARE PLANNED AT MEGAFOODS

MESA, Ariz. -- Megafoods Stores here said it is undertaking a major management reorganization and cost-cutting program that it expects will "lead the company back to profitability." Besides several middle-management changes, Megafoods is reducing its corporate staffs here and in San Antonio, "though no store-level staff reduction is contemplated," the company said. Megafoods said it also has decided not to proceed with a supply agreement with Safeway. Instead it has signed a new agreement with current supplier Fleming, which, as reported, was predicted by industry sources. The deal is a five-year noncancellable agreement with Oklahoma City-based Fleming.