D&W ENDS 40-YEAR RELATIONSHIP WITH SPARTAN

GRAND RAPIDS, Mich. -- D&W Food Centers here said last week it has reached an agreement with Supervalu, Minneapolis, under which it will become D&W's primary wholesaler in November.

when Spartan continued to acquire independent grocery chains. D&W said Spartan, D&W's largest supplier, became a direct retail competitor as a result of these acquisitions.

Doug Blease, D&W president and chief operating officer, said, "Spartan has fundamentally changed its entire business focus from being a cooperative independent grocery supplier to becoming a retail supermarket chain. It just doesn't make good sense to continue to buy from them."

Spartan said it will implement cost reduction plans so that D&W's decision does not affect Spartan's overall financial results. Spartan said its annual sales to D&W represent less than 4%, or approximately $130 million, of Spartan's volume. Also, Spartan noted that D&W leases five of its store locations from Spartan, and conditions in those leases include minimum purchase requirements.

James B. Meyer, Spartan chairman, president and CEO, said, "While we are disappointed by D&W's decision, we expect specific cost-cutting measures that we are taking to minimize any financial impact. [Meanwhile], we will work with D&W to effect a smooth transition over the course of the next month and a half."