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Tops Awarded Winning Bid for Penn Traffic's 79 Stores

Company will control Quality Markets in WNY

By Samantha Maziarz Christmann

January 26, 2010

 Tops Markets was awarded the winning bid for Penn Traffic's 79-store grocery chain in a Delaware bankruptcy court Monday, doubling Tops' holdings. The deal is expected to close by Friday.

Tops has hinted it will close three stores in Vermont and New Hampshire but has not said which ones it will close in New York and Pennsylvania.

The company operates 13 Quality Markets in Attica, Dunkirk, Ellicottville, Falconer, Frewsburg, Jamestown, Lakewood, Lockport, Mayville, Randolph, Silver Creek, Westfield and Amherst. There is no word about whether any of those locations will be shuttered, but there has been no indication that they will.

Tops has 71 stores plus five franchise locations in New York and Pennsylvania. The acquisition will create an undetermined number of jobs at Tops' corporate headquarters in Amherst.

Sen. Charles E. Schumer, who pushed the court to extend its deadline for additional bids such as Tops', was thrilled with Tops' winning bid.

"Hallelujah! The judge's signature on the court documents this afternoon marks the positive completion of our long journey and is the best possible outcome to ensure the vast majority of the 4,000 workers stay employed at decent wages and that the vast majority of stores stay open," said Schumer in a statement.

But even as some are celebrating the growth of a locally based company and the retention of thousands of grocery jobs, others are lamenting the ripple effects of the sale.

A C&S Wholesale Grocers frozen distribution facility, which supplies Tops Markets in New York and Pennsylvania, has been threatened with closure. That closing would put roughly 60 people on the unemployment rolls.

In order to secure new work created by the Tops purchase, C&S is requesting concessions from workers at the Cheektowaga warehouse. If those concessions are not granted, the company has warned the work currently being done in Cheektowaga could be outsourced to a Seneca Falls facility, sources said.

Penn Traffic's stores were also supplied by C&S. As part of the Penn Traffic bankruptcy case, C&S will close its two Syracuse warehouses and consolidate them with a third in Pennsylvania in the event of the Tops purchase. Those C&S warehouses are staffed with Penn Traffic workers.

According to their contract, the Cheektowaga warehouse workers would be given a required 60 days' notice before layoffs took place. Those workers, represented by Teamsters Local 264, have a contract that expires in 2011.

Though Teamster representatives declined to comment on the specifics of the situation, the union gave a brief statement.

"The local is committed to preserving every Teamster job that may or may not be impacted through the Penn Traffic bankruptcy situation. Discussions with C&S Wholesale Grocery on the continuing employment relationship at the frozen food facility are ongoing," said Ron Lucas, president and principal officer of Teamsters Local 264. "No material change to the current operation is expected imminently."

C&S' nearly 1 million-square-foot Lancaster warehouse would not be immediately affected by the Penn Traffic case, sources said. The New Hampshire-based company laid off roughly 60 workers there in April. That warehouse, which employs 700 workers (about 600 of whom are unionized) is represented under a separate Teamsters contract.

Tops' McKenna declined to comment on the matter.

"It is not Tops' policy to discuss the operations or personnel matters of our business partners, so we'd prefer not to comment," said Tops' McKenna.

C&S Wholesale grocers was named the 12th largest private company in America by Forbes magazine in 2009.

It had more than $19 billion in revenues in 2008 and currently employs more than 17,000 people at 70 locations in 12 states, according to Forbes. Five of its East Coast warehouses are unionized.

C&S is the second-largest food wholesaler in the United States, serving national and regional grocery chains and military bases. In addition to Tops and Penn Traffic, C&S supplies 5,000 independent grocers as well as Safeway, Target, A&P, BJ's Warehouse, Pathmark and Kroger.

e-mail: schristmann@buffnews.com