Fleming Companies Inc. plans a $41.4 million consolidation of
its distribution system, in a move that is expected to cost 1,000
jobs nationwide, the Oklahoma City-based firm announced Thursday.
The consolidation effort is expected to be completed in two
years and will give the nation's largest wholesale food distributor
fewer and larger distribution centers, according to a statement by
Dean Werries, chairman and chief executive officer.
"High volume, high productivity super centers are the wave of
the future in our business," he said. "With this action, we are
providing for the transition to more of these highly efficient
The consolidation plan will combine smaller operations into
ones with higher volumes which provide economies of scale.
Decisions on which warehouses or divisions to be consolidated have
not been made, according to Ron Frost, director of corporate
"Our business, which is food wholesaling, is extremely
It is a low-margin business. We are earning one penny or less
on the dollar, and it is absolutely vital that we operate as
efficiently as possible. On the other side of it is that we want to
keep the cost of goods to our retailers as low as possible."
Werries called the consolidation a "necessary part of the
company's ongoing effort to increase efficiency."
The 1,000 jobs expected to be eliminated represent less than 5
percent of the company's 22,800 associates. Frost said it could not
be immediately determined how many jobs in the Oklahoma City area
would be affected.
The two-year period for implementation of the plan "gives us a
long lead time. Attrition will take care of a lot, and early
retirements will take care of some," he said. Some affected workers
also are expected to be transferred.
"The reductions will happen over the next two years, but we
don't know when they will begin. We don't have a date set, but I
imagine they will start in the next few months," Frost said.
A key element of Fleming's long-range strategy for its
distribution system has been the development of super centers,
which have annual sales of $800 million to $1 billion. Fleming has
five such centers and already had announced plans for another one
in the Kansas City area, Frost said.
The existing five super centers are in Phoenix; Memphis, Tenn.;
Lubbock, Texas; Philadelphia; and Waukesha, Wis. The Kansas City
super center will combine the Topeka and Kansas City operations
into a new Heartland division. It is expected to be operational in
"We may only have two or three more super centers" as part of
the consolidation plan, Frost said. …