Beleaguered US convenience store operator Kmart and US food distributor Fleming have announced that they have terminated their supply relationship.

The companies determined that the continuation of the supply arrangement was not in either of their best interests. Kmart and Fleming are continuing their ongoing discussions regarding transition arrangements and resolution of outstanding claims under the agreement.

Kmart president and chief executive officer Julian Day said: “We have determined that given the change in our store base, among other things, the Fleming supply arrangement no longer meets our needs and the rejection of the contract at this time is appropriate.”

Fleming chairman and chief executive officer Mark Hansen said, “Despite our mutual efforts to negotiate modifications to the supply agreement, it was clear to both parties that termination was the right solution. The basis on which the parties entered into the agreement have substantially changed, warranting an end to the relationship.”