Penn Traffic Closes Penny Curtiss Bakery Division

SYRACUSE, N.Y. -- The Penn Traffic Co. said yesterday that would close its Penny Curtiss commercial bakery operation, effective immediately, as part of the retailer's plan to boost its long-term financial performance and further devote its resources to bettering its stores.

"This decision was very difficult, particularly because it affects a number of dedicated, long-term employees," said Penn Traffic president and c.e.o. Gregory J. Young. "Penny Curtiss Bakery has been a part of central New York for over four decades. But after exhausting efforts to replace lost volume, and facing prohibitive modernization costs, we made this difficult decision."

Penn Traffic said Penny Curtiss has been struggling to survive in a daunting commercial bakery landscape, dealing with such issues as national overcapacity. Penn Traffic said the division was contributing less than 4 percent of total annual revenue, and in August lost a significant contract to provide Aldi stores with fresh-baked goods.

The closure will affect about 160 employees, Peen Traffic said. The grocer employs over 7,700 people companywide, with over 2,400 employees in its hometown of Syracuse.

The shuttering of Penny Curtiss "will enable Penn Traffic to focus on its core store portfolio and wholesale operations," added Young. "In recent months we've devoted resources to key locations, enhancing their appearance and improving customers' overall shopping experience. We expect to continue and accelerate that process in our core store portfolio during 2008 and beyond."

Young pointed out that the grocer is changing over its Cazenovia, N.Y. location to a P&C Fresh store. "The P&C Fresh concept is focused on meeting the growing consumer demand for premium products, including many store-made fresh signature products and an expanded natural and organic product offering," he explained. "The multimillion-dollar renovation expands the Cazenovia store by nearly 50 percent, and the new look creates a more-inviting consumer experience in a full-service, friendly environment. We have also been working hard to continue to grow our wholesale business, and look forward to adding new customers in 2008."

Penn Traffic operates 103 supermarkets in Pennsylvania, upstate New York, Vermont, and New Hampshire under the BiLo, P&C, and Quality banners. The company additionally operates a wholesale food distribution business serving about 121 independent operators.
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