Marsh Supermarkets Inc. said Monday it will outsource distribution services for all 97 of its stores in Indiana and Ohio.

The Indianapolis-based grocery chain said it reached a long-term agreement with C&S Wholesale Grocers Inc. to manage purchasing, inventory management and distribution of products from its distribution centers.

Marsh said 250 logistics workers will become employees for C&S and work from Marsh’s distribution centers.

“With this agreement, Marsh will be leaving the logistics business,” the grocer said in a prepared statement. With the move, “Marsh will realize greater operational efficiencies and will focus exclusively on its core retail business,” it said.

C&S, based in Keene, N.H., bills itself as the largest wholesale grocery distributor in the United States, based on revenue. Forbes ranks it as the 10th largest private firm in the nation, with $19.4 billion in sales in fiscal 2010. Its clients include Target, A&P and Safeway.

The company, founded in 1918, primarily does business in the Northeast, Southeast, and California and Hawaii, but will add the Midwest to its network through the Marsh agreement.

“C&S is also very excited about its further expansion into the Midwest and its ability to service new and existing customers from the Indianapolis distribution centers."  Michael Newbold, executive vice president of corporate development at C&S, said in a prepared statement.

Marsh CEO Joe Kelley said the agreement will allow Marsh  to “focus our full attention and resources on upgrading our current fleet of Marsh stores as well as expanding into new locations by opening new stores or acquiring other supermarkets.”

Kelley joined Marsh in early May from Price Chopper, a Schenectady, N.Y.-based grocery chain with about 125 locations in six states, mostly in New York. He promptly hired former PriceChopper exec David C. Siegel in the newly created position of senior vice president of merchandising and marketing strategic initiatives.

Siegel told IBJ in late May that he planned to revamp Marsh’s product mix by expanding offerings available under its Marsh label to give frugal shoppers more options.