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A&P, C&S to Merge A&P, Pathmark Supply Deals

The Great Atlantic & Pacific Tea Co., Inc. and C&S Wholesale Grocers, Inc. said yesterday they had signed a 10-year agreement to merge their previously separate A&P and Pathmark supply agreements into a single agreement.

The agreement restructures the terms of the relationship, aligning distribution operations, procurement practices, and warehousing facility goals for all of Montvale, N.J.-based A&P's retail banners.

"The contract is a major change in the way A&P and C&S work together," said A&P in a statement. "With this agreement A&P and C&S will create increased efficiencies across A&P's distribution network, improve service levels to all stores, and enable both companies to achieve cost savings, which further contributes to the attainment of A&P's synergy targets."

A&P said key aspects of the agreement include a new business model, a dedicated network of distribution centers, coordination and collaboration of resources, the reduction of on-hand inventory, improved in-stock levels, best-in-class service levels with improved speed-to-market delivery, and cost reductions that should result in savings for shoppers.

A&P and Keene, N.H.-based C&S said they hope to develop one of the lowest-cost distribution systems in the Northeast grocery industry. They said they also plan to create what they call a "world-class" distribution system to meet the merchandising needs of A&P's various store formats, providing customers with superior product selections.

"Our partnering with C&S and its high-tech infrastructure, combined with our new agreement, creates the value that is only derived from a 'big-business model,'" said A&P president and c.e.o. Eric Claus.

"This agreement revolutionizes the way we do business with large retailers," added C&S chairman and c.e.o. Richard Cohen.

A&P operates 456 stores in eight states and the District of Columbia under the following banners: A&P, Pathmark, Waldbaum's, The Food Emporium, Super Foodmart, Super Fresh. and Food Basics.

The second-largest food wholesaler and the 10th-largest privately held company in the United States, C&S distributes food to supermarkets, retail stores, and military bases across the country, serving more than 5,000 stores from over 70 locations in 12 states.
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