Retail Watchers

So I'm not sure if you heard, but due to the fact that C&S Wholesale Grocers had a contract with A&P which of course went up in smoke, they had to announce layoffs, including shuttering two distribution centers that serviced the Eastern Safeway division, a facility in Upper Marlboro, MD, and a GM/HBC center in Landover. Problem was, the Upper Marlboro center was owned by Safeway (having built it in '98) with C&S operating it through their subsidiary "Collington Services" since 2000. At the time, Safeway was talking about selling the warehouse.

Well, good news. Safeway is keeping the warehouse open and taking distribution back in-house. Backed by state and local funding, they re-negotiated the contract and kept the 700 jobs at the warehouse (the Landover facility wasn't saved because it wasn't owned by Safeway). There was talk for a while that the Eastern Division might take advantage of the giant ACME warehouse in Denver PA (about halfway between Lancaster and Philadelphia), but I guess this means that Safeway Eastern will distribute for its own division and possibly might even grow south.

Safeway won't grow South but I think they will take the Acme distribution to this warehouse as soon as possible (they are stuck in a contract with Supervalu).

Using third parties for distribution is never good. Safeway had similar arrangements elsewhere in the past and got out of them as soon as they could. These were 1990's and early 2000's moves that were designed to cut costs but there were other issues.

storewanderer wrote:Safeway won't grow South but I think they will take the Acme distribution to this warehouse as soon as possible (they are stuck in a contract with Supervalu).

Using third parties for distribution is never good. Safeway had similar arrangements elsewhere in the past and got out of them as soon as they could. These were 1990's and early 2000's moves that were designed to cut costs but there were other issues.

If I recall correctly, the contract with SuperValu is already on a phase-out process. They're already using Safeway products in the ACME stores, for instance, and by "growing south", I don't mean seeing Safeway eventually in the Carolinas, I mean, what if SuperValu decides to put Farm Fresh up for sale at some point?