Aug 1, 2005 12:00 PM

The Great Atlantic & Pacific Tea Co Inc (A&P) has entered into an agreement to transfer its United States distribution operations and some warehouse facilities and related assets to C&S Wholesale Grocers. Transition of property and operations is expected to begin in July and be completed this autumn.

This agreement follows A&P's May 10 announcement of plans to focus on future Northeast US retail development by realizing the value of its Canadian company, divesting its Midwest operations, and pursuing supply chain and other cost reductions. A&P said the new long-term supply and logistics arrangement is expected to produce an estimated $40 million in annual savings.

The company said that due to the scope of C&S's distribution network, A&P-operated facilities in Edison NJ and The Bronx NY will not be transferred as part of the transaction and are slated to be closed. A&P is also pursuing the sale of its Michigan warehouses separately as part of its Midwest divestiture plan.