GRAND UNION TO SHUT DEPOT, USE DISTRIBUTOR

LISA A. TIBBITTS

WAYNE, N.J. -- To help it regain its financial footing in the aftermath of its Chapter 11 bankruptcy protection filing, Grand Union Co. here is closing a company-owned distribution facility in Waterford, N.Y., and turning to a third-party distributor.

The company, in a cost reduction move, has chosen C&S Wholesale Grocers, Brattleboro, Vt., to service its Northern region stores -- those in mid and upper New York state, Vermont and New Hampshire. C&S will supply the 127 stores in the region from its Vermont headquarters and from a site in Hatfield, Mass. The balance of Grand Union's 234 stores -- or 107 stores -- will continue to be supplied by company-owned distribution facilities.

In conjunction with that arrangement, Grand Union will close its Waterford distribution center near the end of July, displacing close to 400 union and non-union employees.

"We cannot ignore the significant difference in savings as we attempt to maximize the future security of our company and our 17,000 associates," said Joseph J. McCaig, president and chief executive officer, in a statement.

Currently located in the Waterford distribution center, the Northern region office will be moved to a nearby location. About 90 headquarters-based employees will be transferred to the new office.

Louis Esposito, president of the Independent Transportation Employees Association, an independent union based in Waterford, said Grand Union officials told him the cost of continuing to run the facility was "prohibitive."

Grand Union owns four other distribution centers, utilizes a frozen food distribution facility operated by a third party and also leases space in several other storage facilities, according to its disclosure statement filed with the U.S. Bankruptcy Court in Wilmington, Del., in February.