Target Selects Fleming for National Supply Agreement

Discussion
Jul 09, 2002
George Anderson

Fleming’s National Distribution Network
Provides Compelling Single-Source Solution

Fleming has announced that it has been selected by Target to supply candy, cookies, and convenience frozen and refrigerated foods to all Target stores nationally. Fleming will also supply food products to Target’s in-store Food Avenue Cafes.

The deal is said to be worth roughly $300 million in annual volume beginning in October of this year. Target will become one of Fleming’s five largest customers in the process. This is another big win for Fleming coming after the announcement in March that the wholesaler had signed a five-year agreement worth about $250 million a year with Albertson’s.

“We are excited about expanding our relationship with Target,” says Mark Hansen, chairman and chief executive officer of Fleming. “This agreement is an example of the outstanding additional organic growth opportunities made possible by our new, national piece-pick distribution operations. It also represents the continued diversification of our customer base with high quality retailers of all formats.”

Target’s deal with Fleming comes on the heels of a previously announced distribution pact between Supervalu and Target in May. The agreement was for Supervalu to supply groceries to 74 SuperTarget stores in 15 states as well as 400 Target stores. There is no word at this time how (or if) the separate deals with impact one another.

Moderator Comment: What will this deal mean for Fleming? Target? Supervalu? Will there be a continued trend to outsourcing distribution to wholesalers and away from self-distribution? [George Anderson – Moderator]

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