Giant Food to Sell or Close Some Manufacturing and Distribution Operations

LANDOVER, Md. -- The management of Stop & Shop and Giant Food have announced several major changes that will take place at Giant for the remainder of 2005 and 2006, including selling Giant's headquarters here, and selling or closing several manufacturing operations and distribution centers, which will impact about 500 jobs.

"These plans are designed to reposition Giant through new investments in stores and the streamlining of Giant's manufacturing and distribution operations," the Ahold-owned retailer said in a statement.

Prior to the end of 2005, Giant plans to exit three of its manufacturing operations and to close several older warehouses that can no longer efficiently support Giant's supply chain network, according to the company.

Also before the end of 2005, Giant intends to sell its Landover warehouse and office complex on Sheriff Road and to relocate its office headquarters in the region.

In the next two years Giant plans to build at least 12 new and replacement stores, and to remodel at least 25 existing stores. Approximately 250 management positions will be added at Giant to support the company's current and expanded operations.

New store projects currently under way include the Tivoli and Van Ness stores in Washington, D.C., and a new store in Millville, Del.

Within the next six months, the company intends to transfer the operating responsibility for the Super G stores in Southern New Jersey from Giant to Stop & Shop's New York Metro Division. The company has decided that its stores in New Jersey will trade under the Stop & Shop trade name. These stores are located within 60 miles of the Stop & Shop offices in Edison, N.J. The Super G stores located in Delaware will continue to be operated by Giant.

The Giant manufacturing operations to be sold or closed are the Giant dairy and ice cube manufacturing plant, both located in Landover, and the company's ice cream manufacturing facility, located in Jessup, Md. The Giant dairy will be sold, the company said, and several potential dairy manufacturing operators have been identified. Giant is seeking alternative suppliers for these commodities and will continue to operate these two facilities until they are sold or closed.

The Giant warehouse and distribution facilities to be closed are the company's frozen food distribution center, located in Jessup, and the company's health and beauty care distribution center and a nonfood products distribution center, both located in Landover. Giant's frozen food distribution center operations will be transferred to a third-party distributor. The health and beauty care distribution center and nonfood products distribution center operations will be transferred to American Sales Co. of Buffalo, N.Y., a company owned by Ahold.

Giant said it will continue to operate its modern dry grocery facility and its new perishable distribution centers in Jessup, which opened in 2003. The company plans expansion of operations and further investments during the next two years, including adding voice selection technology and the shipping of additional product lines.

"We are very excited about the significant store construction and remodels which will occur in the next two years. Customers will see the difference in these new and improved store facilities," said Bill Holmes, e.v.p. and general manager of Giant, in a statement.

The approximately 500 Giant distribution, manufacturing, and transportation associates who will likely be affected by Giant's decision to cease operations in facilities were informed in a series of staff meetings that began May 1, the company said.

Giant Food LLC employs more than 25,000 associates and operates 203 supermarkets in Virginia, Maryland, Delaware, New Jersey, and the District of Columbia. Included within the 203 stores are 174 full-service pharmacies.

The Stop & Shop Supermarket Co., LLC, based in Quincy, Mass., employs more than 58,000 associates and operates 360 stores throughout Massachusetts, Connecticut, Rhode Island, New Hampshire, New York, and New Jersey.
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