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    Clemens Markets Sold to Giant/Carlisle, C&S

    KULPSVILLE, Pa. - Clemens Markets here, the Philadelphia area's largest independent supermarket chain, will be acquired in a two-part deal by Ahold's Carlisle, Pa.-based Giant Food Stores division, and Keene, N.H.-based C&S Wholesale Grocers Inc.

    KULPSVILLE, Pa. - Clemens Markets here, the Philadelphia area's largest independent supermarket chain, will be acquired in a two-part deal by Ahold's Carlisle, Pa.-based Giant Food Stores division, and Keene, N.H.-based C&S Wholesale Grocers Inc.

    The deal -- which includes store personnel, inventory, equipment, and existing lease agreements -- will add 14 locations to Giant's store count in the competitive Delaware Valley market, where the strong-performing Ahold division already operates about 25 stores.

    Giant said it will convert 13 of the 14 Supervalu-supplied Clemens Markets it will acquire to its namesake banner, while keeping intact the smaller, upscale Foodsource by Clemens store in Bryn Mawr, Pa.

    The announcement comes amid pressure parent company Ahold Group is facing from hedge fund shareholders Paulson & Co. Inc. and Centaurus Capital, to sell its U.S. operations and concentrate on Europe. Ahold said last month it was also putting 46 under-performing Tops stores in Ohio, also part of the Giant of Carlisle division, on the block, noting then that the planned sale bore no relation to the fate of the parent company's other U.S. chains.

    "Shocked but not surprised," was the reaction of one local food industry executive who requested anonymity, to the news about Clemens' pending departure from the local supermarket scene.

    "The long-term fate of Clemens has been a subject of trade speculation throughout the past several years," the observer said, adding that many suppliers had openly wondered in recent years how much longer the family chain could remain viable in the saturated Delaware Valley, which is considered to be among the most competitive marketing territories in the country and a particularly difficult one for larger independents to compete in.

    For Giant's part, however, the deal looks promising. "This is an excellent fit for Giant and will provide an opportunity to reach many new customers in greater Philadelphia," said Tony Schiano, president and c.e.o. of Giant Food Stores. "The Clemens stores have experienced staff and great customer service. We will do everything we can to make sure they are warmly welcomed into the Giant family."

    C&S Wholesale Grocers, meanwhile, which provides groceries and distribution services to Giant, will acquire eight Philadelphia area Clemens Markets locations, which it will in turn sell to C&S affiliates or customers.

    Giant Food Stores, LLC operates 103 stores as Giant Food Stores, 119 stores as Tops Markets and 26 stores as Martin's Food Markets. With nearly 38,000 employees, Giant serves a six-state market area including Pennsylvania, Maryland, Virginia, West Virginia, New York, and Ohio.

    C&S Wholesale Grocers, Inc., with annual sales projected to surpass $19 billion in 2006, is the eighth largest privately held company in the nation, as ranked by Forbes magazine. C&S provides distribution services to grocery chains and independent stores, delivering to nearly 5,000 locations from its distribution centers in Alabama, California, Connecticut, Hawaii, Massachusetts, Maryland, New Jersey, New York, Ohio, Pennsylvania, South Carolina, Tennessee, and Vermont.

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