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                                                                    Exhibit 10.7
                             THE GRAND UNION COMPANY
                            201 Willowbrook Boulevard
                                 Wayne, NJ 07470

                                                     July 30, 1996

Shamrock Capital Advisors, Inc.
4444 Lakeside Drive
Burbank, California  91505

Attention:  Geoffrey T. Moore

Gentlemen:

     This letter will confirm our engagement of Shamrock Capital Advisors, Inc.,
a Delaware corporation ("SCA") to provide management and consulting services to
The Grand Union Company, a Delaware corporation (the "Company"), and its
subsidiaries for a period of three years commencing on the Principal Closing
Date (as that term is defined in the Purchase Agreement, defined below). We
understand that SCA is the investment manager for Trefoil Capital Investors II,
L.P., a Delaware limited partnership ("Trefoil"), which is a party to that Stock
Purchase Agreement, dated July 30, 1996 (the "Purchase Agreement"), by and among
the Company, Trefoil and GE Investment Private Placement Partners II, A Limited
Partnership, a Delaware limited partnership ("GEI") (Trefoil and GEI to be
referred to collectively as the "Purchasers").

     1. SCA will consult with, and provide advice to, the officers and
management employees of the Company concerning matters (i) relating to the
Company's financial policies and the development and implementation of the
Company's business plans and (ii) generally arising out of the business affairs
of the Company. It is understood that the Company shall have no obligation to
follow any of SCA's advice. SCA shall devote such time as it deems is necessary
to perform the services to be rendered by it hereunder, and SCA shall not be
required to devote any minimum amount of time to the performance of such
services. SCA may also be retained to provide additional special services to the
Company as approved from time to time by the independent directors of the
Company (directors of the Company neither affiliated nor associated with any of
the Purchasers), upon such terms and conditions and for such compensation as
shall be negotiated in good faith by SCA and the Company.

     2. SCA's compensation for management and consulting services hereunder will
be $300,000 in the first year of SCA's engagement to provide services hereunder
(each such year a "Service Year"), $400,000 in the second Service Year, and
$500,000 in the third Service Year, such amounts to be payable semiannually in
advance in equal installments each Service Year, with the initial semiannual
payment for the first Service Year to be made on the Principal Closing Date. The
Company shall also reimburse SCA (or cause SCA to be reimbursed) for all of its
reasonable out-of-pocket costs and expenses in connection with the performance
of its services hereunder, which shall include the reasonable fees and
disbursements of its counsel, upon documentation thereof. In addition to the
foregoing compensation, the officers, directors or employees of any of the
Purchasers or their respective affiliates serving as directors of the Company
will also be paid customary director fees paid to non-employee directors of the
Company and will be reimbursed for all of their reasonable out-of-pocket costs

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and expenses in connection therewith.

     3. The Company has been advised that SCA (and its officers and directors)
provides consulting, management and other services to Trefoil, entities in which
Trefoil invests, Shamrock Holdings, Inc., a Texas corporation ("Shamrock"),
entities in which Shamrock invests, and others and that SCA anticipates it will
continue to provide such services and similar services to other persons and
entities. Accordingly, the Company acknowledges and agrees that SCA shall not be
prevented or restricted, in any manner whatsoever, by this letter agreement from
providing services (pursuant to a written agreement or otherwise) to any other
person or entity and will be supplying services to the Company on a
non-exclusive basis.

     4. The Company agrees to indemnify SCA and its affiliates in accordance
with Schedule A, as attached hereto.

     5. This letter agreement may be terminated at any time, with or without
cause, by SCA or the Company. Termination of this letter agreement by the
Company shall not relieve the Company from its obligations (i) to pay to SCA any
unpaid portion of the total amount of fees due to SCA during the entire stated
term of this letter agreement, without giving effect to such termination
(including any and all expenses incurred by SCA but not yet reimbursed by the
Company in connection with the performance of services hereunder), which may be
paid in one lump sum at the time of termination or in accordance with paragraph
2 hereof, at the Company's option, and (ii) to indemnify SCA in accordance with
the provisions of Schedule A hereto, which obligations shall survive any
termination of this letter agreement by the Company or SCA.

     6. SCA hereby agrees that it will, and will use its best efforts to, cause
its directors, officers, employees, agents and advisors ("Representatives") to,
maintain the confidentiality of all information obtained by it or its
Representatives in connection with its services hereunder; will not disclose
such information to any third party (including any other company to which SCA
provides management services), except for information which (i) is or becomes
generally available to the public other than as a result of a disclosure by SCA
or its Representatives, (ii) was within SCA's possession prior to its being
furnished to you by or on behalf of the Company pursuant hereto, provided that
the source of such information was not known by SCA to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any other party with respect to
such information or (iii) becomes available to SCA on a nonconfidential basis
from a source other than the Company or any of its Representatives, provided
that such source is not bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Company or
any other party with respect to such information.

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    If this letter accurately sets forth our understanding with respect to the
subject matter hereof, please indicate that SCA will be bound hereby by
executing the enclosed copy of this letter in the space provided and return it
to us.

                                   Very truly yours,

                                   THE GRAND UNION COMPANY


                                   By: /s/ Jospeh J. McCaig
                                   Name:   Joseph J. McCaig
                                   Title:  President and Chief Executive Officer

Agreed to and accepted
this 30th day of July, 1996

SHAMROCK CAPITAL ADVISORS, INC.

By: /s/ Geoffrey T. Moore

        Managing Director