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Penn Traffic, C&S Sign Procurement Agreement

SYRACUSE, N.Y. -- The Penn Traffic Co. said yesterday that it has signed a produce procurement contract with Keene, N.H.-based C&S Wholesale Grocers, Inc., the second-largest food wholesaler in the United States. Starting March 1, the agreement will permit Penn Traffic to benefit from purchasing cost efficiencies while expanding access to new and alternative products.

C&S, which services more than 5,000 stores from over 70 locations in 12 states, will provide sourcing, purchasing, and in-bound logistics services for all of Penn Traffic's retail stores and wholesale customers.

"We're continually seeking process enhancements that will drive greater value throughout our company," noted Penn Traffic president and c.e.o. Greg Young in a statement. "The C&S agreement will benefit our organization's financial well-being while improving the service we provide our customers."

Penn Traffic will continue operating all of its existing warehouse and transportation functions, including the internal management of out-bound product delivery to its retail stores and wholesale customers, along with merchandising and inspection teams.

The regional grocer operates 98 supermarkets in Pennsylvania, upstate New York, Vermont, and New Hampshire under the BiLo, P&C and Quality banner. Penn Traffic also operates a wholesale food distribution business serving about 121 independent operators.

Penn Traffic last week announced plans to close five underperforming stores in Pennsylvania and New York and concentrate on its core store portfolio.

In other C&S news, a Central Islip, N.Y.-based grocery distribution warehouse operated by the distributor and servicing Waldbaum's and A&P stores throughout lower New York state will close March 28, a union official negotiating severance terms for workers told Newsday.

The facility, once a Waldbaum's warehouse, employs about 400 people, according to Kevin McCaffrey, president of Teamsters Local 707, which represents 220 warehouse workers. Another 90 unionized workers, among them truck drivers, and about 80 non-union management and support staff will also lose their jobs, McCaffrey said.

Since 2005, C&S Wholesale Grocers has handled warehousing and distribution functions for the Great Atlantic & Pacific Tea Co., the Montvale, N.J.-based grocer that owns the Waldbaum's and A&P banners.

McCaffrey said that C&S officials told workers and the union that closing the Central Islip Warehouse would save the company $7 million annually. He added that the company would service New York stores from warehouses in Pennsylvania and Connecticut that employ non-union workers.

A call to C&S for confirmation wasn't returned by presstime.
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