NY grocer plans to close 53 stores, lay off 4,000

AP News
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Posted: Nov 24, 2009 4:47 PM

The Penn Traffic Co. has told New York officials it expects to close dozens of supermarkets in upstate New York and lay off more than 4,000 employees.

The Syracuse-based supermarket operator's layoff notice filed with the state Labor Department says it will close 53 P&C and Quality Markets in central and western New York by Feb. 15. The affected stores and warehouses, located from the state's southwest corner to the Canadian border in the north, employ 4,132 people.

Penn Traffic says the layoffs include 669 jobs at two suburban Syracuse warehouses the company uses through C&S Wholesale Grocers.

Penn Traffic filed for Chapter 11 bankruptcy last week. It also operates stores in Pennsylvania, Vermont and New Hampshire.

Calls to the company weren't returned Tuesday. It was unclear if stores outside of New York also will be affected. The company has said that it still hopes to raise enough money to avoid shutdowns, according to a letter obtained by television station WSTM in Syracuse.

Labor Department spokeswoman Karen Williamson said the company last week alerted the agency about the layoffs within 90 days, as required by state law. She said businesses can cancel or amend their layoff notice if circumstances change.

In addition to its P&C and Quality Markets stores in upstate New York, Penn Traffic operates nine Quality Markets and 33 BiLo stores in Pennsylvania, and three P&C stores in northern New England. Employment in all four states totals about 5,700.

Penn Traffic CEO Gregory Young announced last Wednesday that the company plans to sell off its stores and other assets. At that time he said the stores would remain open while a buyer is sought.

Penn Traffic has struggled financially for more than a decade. It emerged from a nearly two-year bankruptcy reorganization in April 2005, but has continued to lose money. It lost $17.6 million last year and nearly $42 million the previous year.

The company also went through bankruptcy reorganization in 1999.