(July 7) NEW YORK — The disintegration of what once was the largest grocery distributor in the U.S. is continuing. Some indicate that it is accelerating.

Lewisville, Texas-based Fleming Cos. Inc., which has been operating under Chapter 11 bankruptcy protection since April 1, announced June 30 that it had reached a preliminary agreement to sell its wholesale grocery business to Brattleboro, Vt.-based C&S Wholesale Grocers Inc.

Terms of the bid were not released.


Though the agreement must be approved by the U.S. Bankruptcy Court in Delaware, Fleming representatives asked the court to schedule an auction for the business. The company also said C&S would immediately begin supplying its customers with food.

On June 4, Fleming sold 31 of its Rainbow Foods Inc. stores in the Minneapolis-St. Paul area to Milwaukee-based chain Roundy’s Inc. in another auction set up by the bankruptcy court.

“Fleming is, right now, really looking at whatever they can do to try to salvage their total company,” said Ed Odron, president of Produce Marketing Consultants, a Stockton, Calif.-based retail consulting firm.


Fleming had announced earlier in June that it would discontinue operations in July at grocery wholesale divisions in Geneva, Ala.; Lafayette, La.; and Superior, Wis. The firm also recently sold its retail grocery unit, which has than 100 supermarkets.

C&S, which Forbes magazine has ranked as the 11th-largest privately held U.S. firm, has annual sales of more than $11 billion. The company distributes groceries to more than 2,200 stores from its distribution centers in Vermont, Massachusetts, Connecticut, New York, New Jersey, Maryland, Ohio and Pennsylvania.