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C&S To Assume Ownership of Bi-Lo Holdings' Distribution Arm

GREENVILLE, S.C. - Bi-Lo Holdings, LLC here, the new parent company of the Bi-Lo
and Bruno’s Supermarkets chains that had been owned by Ahold, said yesterday it will
transfer the ownership of its warehouse facilities and management of its distribution and
replenishment functions to C&S Wholesale Grocers, Inc., a food distributor based in
Keene, N.H.

The news came as Bi-Lo Holdings announced key elements of a new business plan. As
part of the plan, Bi-Lo Holdings will also begin integrating Bruno’s information
technology systems with Bi-Lo’s systems, and will consolidate the corporate support
functions of both chains at Bi-Lo’s headquarters office in Mauldin, S.C.

Dean Cohagan, president and c.e.o. of Bi-Lo and Bruno’s said in a statement, "After a
careful and comprehensive analysis of our business performance and future prospects, we
have developed a plan that is designed to make our company more efficient by reducing
costs and more responsive by simplifying the way we do business. The plan is also aimed
at focusing our efforts and resources more sharply on what we do best -- operating great
supermarkets and providing exceptional customer service."

Under the distribution agreement, C&S will assume ownership of warehouse facilities
when the transaction closes and management of distribution and replenishment activities
over the next several months. The financial terms of the agreement were not disclosed.

C&S will purchase Bi-Lo’s distribution centers in Mauldin, S.C. and Chattanooga, Tenn.,
as well as a third center in Birmingham, Ala. that primarily services the Bruno’s chain.
The centers distribute products to more than 450 Bi-Lo and Bruno’s supermarkets
throughout the Southeast.

Preparation for the transition of the distribution facilities to C&S will begin immediately
and proceed over the next several months, Bi-Lo Holdings said. The transition is expected
to be completed by mid-year 2005.

All 1,650 employees who currently work in the three distribution centers will be offered
positions with C&S.

Commenting on the agreement, C&S c.e.o. Rick Cohen said, "Combining the strength of
C&S's distribution expertise with the experience and commitment of the newest members
of our team, we hope to make a significant contribution to Bi-Lo and Bruno's future
success. We are very excited to be able to enter the Southeast market with such a well-
established and respected supermarket business."

Other key elements of Bi-Lo and Bruno’s business plan include the integration of Bruno’s
information technology systems with Bi-Lo’s systems, as well as the consolidation of the
corporate support functions of both chains at Bi-Lo’s office in Mauldin.

Bruno’s current accounting, merchandising, pricing, payroll, and store systems will be
integrated into Bi-Lo’s systems. Once the store systems conversions are completed, Bi-
Lo and Bruno’s stores will operate under common systems.

Like the systems integration initiative, the consolidation of the corporate support
functions of Bi-Lo and Bruno’s in Mauldin is aimed at reducing costs and eliminating
duplications. The consolidation will begin immediately and is expected to be completed in
the third quarter of 2005. Approximately 175 positions at Bruno’s headquarters office in
Birmingham will be affected.

Bi-Lo operates 287 stores in South Carolina, North Carolina, Georgia, and Tennessee, and
employs approximately 23,000 associates. Bruno’s operates 168 stores in Alabama,
Florida, Georgia, and Mississippi, and employs approximately 11,500 associates.

C&S, a privately owned company, distributes to more than 3,500 stores and warehouse
clubs from its 42 distribution centers in Vermont, Massachusetts, Connecticut, New
York, New Jersey, Maryland, Ohio, Pennsylvania, California, and Hawaii.
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