Supermarket company Giant Food, a subsidiary of Dutch retailer Royal Ahold’s US arm Ahold USA, has announced restructuring plans for the remainder of 2005 and 2006.
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“We are very excited about the significant store construction and remodels which will occur in the next two years,” said Bill Holmes, executive vice president and general manager of Giant. “Customers will see the difference in these new and improved store facilities.”
During the next two years Giant plans to make substantial investments in building new and replacement stores and remodelling existing stores. By the end of 2005, Giant also plans to exit three of its manufacturing operations and to close several older warehouses which can no longer efficiently support Giant’s supply chain network
Also before the end of 2005, Giant intends to sell its Sheriff Road, Landover, Maryland warehouse and office complex and to relocate the company’s office headquarters in the region.
In the next two years Giant plans to build at least 12 new and replacement stores and to remodel at least 25 existing stores. Approximately 250 management positions will be added at Giant to support the company’s current and expanded operations.
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By GlobalDataNew store projects currently underway include the Tivoli and Van Ness stores in Washington D.C. and a new store in Millville, Delaware. Giant’s new store development and remodels will be in each of its Maryland, Virginia, District of Columbia and Delaware regions.
Within the next six months, the company intends to transfer the operating responsibility for the Super G stores in Southern New Jersey from Giant to Stop & Shop’s New York Metro Division. The company has decided that its stores in New Jersey will trade under the Stop & Shop trade name. These stores are located within 60 miles of the Stop & Shop offices in Edison, New Jersey and this change will provide both Giant and Stop & Shop with improved efficiencies to better focus on their core markets and customers. The Super G stores located in Delaware will continue to be operated by Giant.
The Giant manufacturing operations to be sold or closed are the Giant dairy and ice cube manufacturing plant, each located in Landover, Maryland, and the company’s ice cream manufacturing facility located in Jessup, Maryland. The Giant dairy will be sold and several potential dairy manufacturing operators have been identified. Giant expects that the associates who currently work in the dairy will remain employed under the new owner-operator. The Giant ice cube manufacturing plant and ice cream manufacturing facility will either be sold or closed. Giant is seeking alternative suppliers for these commodities and will continue to operate these two facilities until they are sold or closed.
The Giant warehouse and distribution facilities to be closed are the company’s frozen food distribution centre, located in Jessup and the company’s health and beauty care distribution center and a non-food products distribution centre, both located in Landover. Giant’s frozen food distribution centre operations will be transferred to a third-party distributor. Giant’s health and beauty care distribution centre and non-food products distribution centre operations will be transferred to American Sales Company of Buffalo, New York, a company owned by Giant’s parent company, Ahold.
Giant will continue to operate its modern dry grocery facility and its new perishable distribution centres which opened in 2003 and are both located in Jessup. Giant has made significant investments in these facilities and plans expansion of operations and further investments in each during the next two years, including adding state of the art voice selection technology and the shipping of additional product lines.
Following the foregoing facility closures, the remaining operations at Giant’s distribution and office complex on Sheriff Road in Landover will consist solely of Giant’s headquarters office and its construction shop. As a result, Giant also plans to sell its Sheriff Road complex and relocate Giant’s headquarters office to a new location in the region. The company has begun looking for sites in Prince George’s County that would cause the least disruption for Giant associates. No decisions have been made regarding future operations or location of the Giant Construction Shop.
“The distribution centres being closed are very old and largely inefficient,” said Holmes. “It is no longer economically viable to continue to operate these smaller, outdated facilities. In ceasing our manufacturing operations, we are turning the business over to those who are experts in their field. All of these changes will advance our long-term goal of significantly improving our supply chain operations, leading to greater service to our stores.”
