News Watch

FRESHDIRECT: EMPLOYEE EXODUS SLOWING SERVICE NEW YORK A recent employee exodus related to a federal audit of employment records at FreshDirect is likely to slow service through the end of January, the online grocery retailer said last week. It has been challenging for us to keep up with January demand in the past, and this January we're going to have a harder time meeting your food needs than we usually

FRESHDIRECT: EMPLOYEE EXODUS SLOWING SERVICE

NEW YORK — A recent employee exodus related to a federal audit of employment records at FreshDirect is likely to slow service through the end of January, the online grocery retailer said last week. “It has been challenging for us to keep up with January demand in the past, and this January we're going to have a harder time meeting your food needs than we usually do,” Steve Michaelson, chief executive officer of FreshDirect, said in an email to customers. He added that training and new hiring should bring the company back to capacity by the end of the month. As reported last week in SN, around 100 employees left or were dismissed related to the federal employment audit.

PENN TRAFFIC SHUTTERS BAKERY OPERATION

SYRACUSE, N.Y. — Penn Traffic Co. here last week said it would shutter its Penny Curtiss bakery operation, effective immediately, to focus on its core supermarket business. The company said Penny Curtiss was contributing less than 4% of Penn Traffic's annual revenues. In August, Penn Traffic reported that it had lost a significant contract to supply Aldi stores with fresh-baked goods. About 160 employees will lose their jobs as a result of the closure, Penn Traffic said. The retailer operates 103 supermarkets in four Northeastern states under the BiLo, P&C and Quality banners.

SAFEWAY, UNIONS APPROVE CALIFORNIA CONTRACT

PLEASANTON, Calif. — Employees at Northern California Safeway stores approved a new contract last week, according to the United Food and Commercial Workers union. The four-year agreement covers about 25,000 workers at 300 Safeway stores. As previously reported, the union locals and the chain, based here, reached a tentative agreement on a new pact on Dec. 1 that calls for wage increases and what the unions described as “improvements in health care.”

REPORT ON INDIA VENTURE ‘ERRONEOUS’: KROGER

CINCINNATI — Kroger Co. here last week said that reports it was looking into real estate deals in India were “erroneous.” A Kroger spokeswoman told SN the retailer was trying to determine how it was named in an article published in India's Economic Times newspaper saying that representatives of the company had met with real estate companies for joint-venture projects in India. “We think they may have gotten us confused with another company,” Meghan Glynn, the spokeswoman, told SN. Kroger was not looking into deals in India, she added.

RUDDICK LINES UP $450 MILLION IN NEW CREDIT

MATTHEWS, N.C. — Ruddick Corp. here, the parent of the Harris Teeter supermarket chain, said it has entered a new $450 million credit agreement with a consortium of banks. The new agreement calls for the banks to offer a $350 million, five-year revolving credit facility and a $100 million term loan due Dec. 20, 2012. The credit facility includes the option for a $100 million increase and two one-year options to extend the maturity, both requiring the consent of the lenders. The company said it has retired a previous $350 million credit facility with Wachovia Bank.

THREE WIC-ONLY STORES CLOSE IN KANSAS

KANSAS CITY, Kan. — The owner of three grocery stores that specialized in offering only products approved for sale through the USDA's Women, Infants and Children (WIC) program here has closed all three locations, citing price competition from larger retailers, according to reports. The Kansas Nutrition Store here and two other locations in Topeka, Kan., and Garden City, Kan., closed after the USDA implemented new rules in 2006 that required the stores to be more price-competitive, owner David Criswell told the Kansas City Star.