A&P and C&S Wholesale Grocers Sign Supply Pact

Food & Beverage Close-Up, March 12, 2008

FOOD AND BEVERAGE CLOSE-UP-12 March 2008-A&P and C&S Wholesale Grocers Sign Supply Pact(C)2008 - CloseUpMedia - newsdesk@closeupmedia.com

The Great Atlantic & Pacific Tea Co. and C&S Wholesale Grocers have announced the signing of a new ten-year agreement to combine their previously separate A&P and Pathmark supply agreements into one partnership.

The agreement restructures the terms of their relationship aligning distribution operations, procurement practices and warehousing facility goals throughout A&P s retail banners.

The contract is a major change in the way A&P and C&S work together. With this agreement A&P and C&S will create increased efficiencies across A&P s distribution network, improve service levels to all stores, and enable both companies to achieve cost savings, which further contributes to the attainment of A&P s synergy targets.

The key aspects of the agreement are:

A new business modelA dedicated network of distribution centersCoordination and collaboration of resourcesReduction of on-hand inventoryImproved in-stock levelsService levels with improved speed-to-market deliveryCost reductions aimed to result in savings for customers

The new agreement aligns both companies objectives and provides incentives to achieve mutual goals. Together, A&P and C&S expect to develop one of the lowest cost distribution systems in the Northeast grocery industry. Further, they plan to create a world-class distribution system to fulfill the merchandising needs of all of A&P s diverse store formats, providing customers with the best product selections.

As part of the new agreement the supply roles and responsibilities will be streamlined, creating clarity that will improve coordination and result in more productive procurement practices. The agreement will enable both A&P and C&S to implement warehouse efficiency controls to reduce costs and improve store service.

Eric Claus, President & CEO, The Great Atlantic & Pacific Tea Co., said, We are extremely pleased to arrive at this ground-breaking agreement. Our partnering with C&S and its high tech infrastructure combined with our new agreement creates the value that is only derived from a big business model . This leading-edge agreement will provide cost savings and efficiencies in warehousing while benefiting all parties including, most importantly, our customers.

Richard Cohen, Chairman & CEO, C&S Wholesale Grocers, added, C&S is excited to partner with A&P in an innovative relationship structure which could be the model for our industry. This agreement revolutionizes the way we do business with large retailers.

A&P is a supermarket chain that operates 456 stores in 8 states and the District of Columbia under the following trade names: A&P, Pathmark, Waldbaum's, The Food Emporium, Super Foodmart, Super Fresh and Food Basics.

C&S is a food wholesaler and the 10th largest privately held company in the United States. The company distributes food to supermarkets, retail stores and military bases across the country, currently serving over 5,000 stores from over 70 locations in 12 states.

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