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In the wake of yesterday's announcement that Fleming and Kmart were severing the contract that had the wholesaler supplying groceries to the troubled discounter, Kmart said that it would launch "a previously prepared contingency plan that would immediately transition us to a self-distribution process," according to a spokesman.

The Kmart executive would not speculate about the company’s long-term plans for grocery supplies.

The companies cancelled their agreement because it no longer was in either of their best interests to continue it; Kmart is in the process of closing more than 300 stores as it struggles to emerge from bankruptcy protection. While there has been some speculation that Kmart would get out of the supercenter business altogether, and therefore would have less need for a grocery wholesaler, the company has to this point said it plans to keep operating the format, albeit fewer of them than in the past.
KC's View:
Suggestion to any company that might decide to take on the Kmart grocery supply business…

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