Central Grocers will close 9 Ultra Foods stores, sell 22 Strack & Van Til sites

Strack & Van Til worker Brad Root removes shopping carts from the parking lot of a Valparaiso store in 2015. The grocery chain's parent company plans to sell 22 Strack & Van Til stores in Illinois and Indiana, it announced April 18, 2017. (Kyle Telechan / Post-Tribune)

Greg TrotterContact ReporterChicago Tribune

 

Central Grocers, the Joliet-based parent company of Strack & Van Til and Ultra Foods grocery stores, is closing nine Ultra Foods stores, including some in the Chicago area, and intends to sell 22 Strack & Van Til stores in Illinois and Indiana, the company announced Tuesday.

The nine "underperforming" Ultra Foods stores include locations in Wheaton, Lansing, Joliet, Chicago Heights, Calumet Park and Forest Park. Central Grocers, a grocery cooperative incorporated in 1917, operates as a wholesaler to independent grocery retailers in the Chicago area that are members of the co-op.

The cooperative could be making other dramatic changes. In a lawsuit filed Tuesday in federal court in Chicago, Teamsters Local 703 allege Central Grocers signed a letter of intent to "sell its operations and/or facilities."

It's unclear what that means for Central Grocers' massive warehouse in Joliet, where about 300 members of Teamsters Local 703 work. The union filed a motion for a temporary restraining order and preliminary injunction to stop Central Grocers from selling its business, alleging that the sale would violate the collective bargaining agreements — unless the purchaser adopted the agreements, according to the lawsuit.

 It's also unclear whether the end is near for the almost 100-year-old business. Calls to Central Grocers President Ken Nemeth were referred to Joele Frank, a public relations company in New York. Michael Freitag, a partner at the firm, largely declined to comment, other than to say that Central Grocers is "exploring strategic alternatives" for the company.

Freitag wouldn't say whether a buyer has been identified, nor would he say whether bankruptcy is among the alternatives being considered by Central Grocers.

In a letter to co-op members in February, Central Grocers said the company's board of directors hired New York-based Peter J. Solomon Co., an investment banking advisory firm, to consult.

2,500 Illinois layoffs reported to state in March, many from store closings

"That process has produced several indications of interest from multiple parties hoping to expand their presence here in our marketplace," according to an excerpt of the letter provided to the Tribune.

 

Freitag declined to comment on the union's lawsuit. Calls to Teamsters Local 703 and Joint Council 25 were not returned.

The union's lawsuit alleges that Central Grocers "confirmed it intends to sell to an unknown purchaser" but hasn't provided any assurances that the buyer will honor the two collective bargaining agreements that cover the 300 employees at the warehouse.

There have been other recent signs of upheaval for Central Grocers' retail operations.

Last month, Strack & Van Til disclosed to the state that it will cut a total of 370 people when it shutters a Strack & Van Til store at 2627 N. Elston Ave. in Chicago, plus three Ultra Foods locations, in Downers Grove, Lombard and at 3250 W. 87th St. on Chicago's South Side. They are set to close April 30.

Central Grocers acquired Strack & Van Til in 1998.