The Great Atlantic & Pacific Tea Co. (A&P), which has experienced a steady stream of financial difficulties throughout the past two decades, is looking to sell as many as 137 of its 301 stores, according to published reports.
According to The New York Post, stores to be sold across the Montvale, N.J.-based retailer’s six-store footprint include all 10 of The Food Emporium stores in Manhattan. The newspaper also cited a list of stores to be sold, which it said features both money-making and underperforming locations.
The company hasn’t confirmed a sale, but acknowledged it's conducting a strategic review that could lead to shedding stores. “The review includes raising new capital from investors, considering new business-partner relationships and exploring the sale of certain assets of the company,” A&P noted in a statement.
The latest news of A&P's potential store divestures finds many trade observers unfazed.
“I’m not surprised in the least" by reports of a potential sale, Baltimore-based grocery industry analyst Jeremy Diamond told Progressive Grocer. “The company has struggled for so many years and has ‘missed the boat’ every time. They relied on their brand too much, which no longer has much value."
Recalling the company's halcyon days as the nation's largest and most envied supermarket chain, Diamond observed: "A&P did not evolve and change with the demographics and shopping habits of today’s grocery shoppers. Without identifying their niche, they would not survive. The company tried shuffling around its leadership team and other survival methods; however, it failed to identify [its] niche and communicate effectively with the public," as well as with associates.
Diamond further observed, “I think whoever buys the company will remove the A&P namesake, since it has little value in today's marketplace.”
Eleven locals of the United Food & Commercial Workers (UFCW) represent A&P workers and met on Wednesday, June 17, to discuss the matter.
Meantime, the Washington, D.C.-based UFCW International this week issued the following statement:
"We would like all UFCW members employed by the A&P Company and all of its banners (including A&P, Pathmark, Waldbaums, SuperFresh, Food Basics, and the Food Emporium) to know that we are well aware of the rumors circulating about the potential sale of the A&P Company in whole or in part.
"In order to keep our members as informed as possible, we would like to make you aware of the facts as we know them as of this posting:
- We have confirmed that A&P is actively seeking potential buyers for part or all of the company.
- There is interest being shown by several companies regarding a purchase of A&P in whole or in part.
- The A&P Company has not contacted us directly regarding any such potential sale.
- We have not met with any representatives of potential buyers to discuss any such purchase
"For the past five years all of our local unions have been united, working together to protect and maintain the jobs of over 30,000 UFCW members working under the A&P banner. Please be assured that as we move forward with a potential sale of the company your local unions will continue to work together to ensure that the best interests of all of our members are being protected.
Furthermore, should a sale in fact be pending, we will demand a seat at the table with both the A&P Company and any potential buyers to ensure that our members and their jobs are protected.
We will continue to issue updates on this situation as more information becomes available. In the meantime, we urge you to ignore the rumor mill and to trust only information disseminated by the UFCW or your local union and its representatives."
Partly owned by Ron Burkle’s Yucaipa Cos., A&P filed for Chapter 11 bankruptcy protection in 2010, emerging in 2012 as a privately held company, but its financial woes have persisted.
Burt P. Flickinger III, managing director of the New York, N.Y.-based Strategic Resource Group, shared observations with Progressive Grocer earlier this spring about the fate of A&P, which was No. 19 on PG's Super 50 list of the nation's leading food retailers, excerpts of which follow below:
"A&P's future appears uncertain. While Yucaipa has had significant success, it has been primarily in western states. In my professional view, Yucaipa has been less than successful, starting with Almac's in New England and other investments in eastern supermarket chains.
"The 'white knight' hypothesis of Kroger or another strategic food retailer buying A&P appears very unlikely. Kroger and other food retailers with strong financial foundations only buy thoroughbred companies, and A&P has failed to win, place or show – or even finish anywhere near the money for most of the last 15 years.
"Like Pathmark and Waldbaum's, A&P's Food Emporium, Food Basics, Super Fresh, and A&P banners have good locations and hard-working people in the stores, so there can be hope with a focused coordinated effort between the investors, management, buying, merchandising and operations."
Flickinger's full commentary on A&P can be found here.