Grand Union announces major organizational change.

WAYNE, N.J.--(BUSINESS WIRE)--Jan. 24, 1996--The Grand Union Company today announced a major organizational change that "will enable us to focus our resources much more effectively while at the same time creating major reductions in our overhead costs," according to Joseph J. McCaig, President and

McCaig said "We will no longer have a structure composed of two separate Regional profit centers and a Corporate headquarters group. Instead, we are eliminating the Regional organizations by consolidating all merchandising and administrative functions into our Wayne, N.J. headquarters. Simultaneously, we are establishing five operating Areas, each of which will have a team focused on store operations within that particular geographic area."

"By making these changes," McCaig said, "the Company will be accomplishing three major objectives:

(1) "Centralizing all functions not essential to day-to-day store operations by creating a unified team to effectively and efficiently perform those non-store functions;

(2) "Decentralizing the functions essential to insure that our stores satisfy our customers by creating five localized teams to work with our store associates to be sure that we are providing excellent customer service and store conditions as well as effective execution of our merchandising plans;

(3) "Elimination of $5 million per year of administrative overhead costs. By taking these costs out of the system in areas the customer doesn't see, we will be able to reinvest those savings to strengthen areas the customer does see, i.e., pricing, sales programs and store service levels, to drive our sales growth."

A major part of the consolidation is the centralization in Grand Union's corporate headquarters of its Grocery merchandising function, including its related marketing and pricing functions, by mid-February. Grocery will join with the Company's Perishables, General Merchandise and Advertising functions that had previously been centralized. All these functions will now be unified, reporting to William A. Louttit, executive vice president and chief operating officer.

Each of the Area teams will be headed by an Area Vice President and will include either three or four District Sales Managers, a team of Specialists who will coordinate in-store merchandising plans, and an Area Trainer. This new field structure will be fully operational by April 1 and will report to Darrell W. Stine, Executive Vice President Store Operations.

Roger E. Stangeland, Chairman of the Board, said "For the last six months, Grand Union's management team, in consultation with the Board of Directors, has developed and refined an overall strategic plan. The organizational changes announced today will allow the Company to achieve a significant part of that plan."

Common stock of Grand Union is traded on the NASDAQ National Market under the ticker symbol GUCO.

CONTACT: Grand Union, Wayne

Donald C. Vaillancourt, 201/890-6100