SUPPLY CHAIN

Longs Drug Plans New DC

BY CSA STAFF

Walnut Creek, Calif., Longs Drug Stores will build a new 800,000-sq.-ft. distribution center in Patterson, Calif. The new facility will support the company’s goal to raise its self-distribution of front-end merchandise to 80% in 2007 from its 40% today.

Longs will invest $50 million to $55 million in the facility to open by fall 2006. Eventually, the facility will absorb the front-end merchandise distribution currently handled by the retailer’s 427,000-sq.-ft. Lathrop, Calif., distribution center.

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U.K.’s Asda to Cut 1,400 Jobs

BY CSA STAFF

Leeds, England, The Wal-Mart-owned British supermarket group Asda today said it plans to cut 200 management jobs and up to 1,200 managerial store positions in a bid to challenge its rival, Tesco PLC. Asda has been engaged in a price war with Britian’s No. 1 chain Tesco for the past year, and the job cuts are part of a restructuring of its executive lineup and headquarters. Asda also brought back two directors from other posts. The supermarket group said the managerial changes would allow the company to better invest in frontline customer service. As Britian’s No. 2 supermarket chain, Asda employs 140,000 people across the country, so the planned cuts could affect up to 1% of the work force. The company said it hopes to reassign 400 of the 1,200 stores positions to other posts.

CEO Andy Bond, who took the reins earlier this year, said, “I’m simply not satisfied with this year’s average performance—our natural home is out-performance and today’s changes put in place the teams that will re-ignite our business over the next 12 to 18 months.”

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Associated Grocers to Explore Strategic Alternatives

BY CSA STAFF

Seattle, Associated Grocers has announced its intention to explore strategic alternatives for the company, the result of a preliminary strategic evaluation by the company’s board. Investment bank Piper Jaffray will provide assessment and advice regarding alternatives for the wholesaler’s future. Associated Grocers has emphasized that this is not a decision to sell the company, but that it would explore options that could lead to its sale. The company said that its goals include attaining a stable, competitive supply chain and maximizing shareholder value.

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