THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, February 21, 1995 TAG: 9502210319
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 69 lines
Camellia Food Stores Inc., the parent company of the Be-Lo supermarket chain, said Monday that it will lay off most of the 300 employees who work at its warehouse and distribution center.
Camellia said it won't need the workers because the company will no longer distribute food to its own stores. Those duties will be handed over to Richfood Holdings Inc., a wholesale food distributor that also supplies Farm Fresh grocery stores. Richmond-based Richfood doesn't need Camellia's center, a 425,000-square-foot building in the Norfolk Industrial Park.
There was nothing the union could do ``short of buying the place and running it ourselves,'' said Marvin Foreman, secretary and treasurer of the Food & Beverage Workers Union Local 32. ``At this point, we still have the opportunity to negotiate with the company the impact of the plant closing.''
Foreman said he was told of the layoffs Monday morning, though rumors had been circulating for weeks. Recently, about 20 employees at the Norfolk center were laid off, he said.
But company officials said that they had few options.
``If we had not signed this agreement, the board of Camellia Foods was concerned for the future of our entire company and the jobs of more than 1,400 workers,'' said Walter L. Grant, president and chief executive of Norfolk-based Camellia.
Grant said that officials hoped to find jobs for many of the workers. Richfood was planning to interviewseveral employees today for jobs with the distribution company, and Camellia may be able to find positions at its supermarkets. Layoffs are expected to begin in April.
Camellia Foods' biggest problem was that it paid higher prices for groceries and was forced to pass them on to consumers. Over the past several years, its Be-Lo stores have lost market share. And things didn't look much brighter with a new wave of competitors planning to move into Camellia territory.
Hannaford Brothers, a Maine-based chain, and upscale Harris Teeter, based in North Carolina, both plan to open several stores in Hampton Roads.
``I wish we could keep the warehouse open,'' Grant said. ``But the reality of the grocery industry today is that a small wholesaler like Camellia simply cannot compete with the purchasing power of larger distributors like Richfood.''
Camellia buys about $160 million in merchandise a year, compared with Richfood's $1.7 billion.
The agreement calls for Richfood to take over Camellia's wholesale inventory, tractor-trailers and dairy plant. Company officials would not release the amount of the contract.
Under the agreement, Richfood will supply Camellia's Be-Lo Foods, Meatland and Food City stores in Virginia, Maryland and Delaware. Richfood also will distribute food to Camellia's 120 wholesale customers, like Jimmy's Fresh Markets.
The transaction is expected to close within 45 days.
``Our agreement allows each company to focus on what it does best: Richfood on procurement and wholesale distribution, and Camellia on its retail customers,'' said Donald D. Bennett, Richfood's president and chief executive. ILLUSTRATION: [Color Photo]
RICHARD L. DUNSTON/Staff
Camellia Food Stores said that the company no longer will distribute
food to its own stores.
by CNB