A&P Lacks ‘Right Formula’: Industry Observer

On the heels of the recent management shakeup at the Atlantic & Pacific Tea Co. (A&P) resulting in the departure of CEO Sam Martin, industry observers with whom Progressive Grocer has spoken say it will take more than a change at the helm to improve matters at the financially embattled chain.

“A&P has been in survivor mode for so many years and continues to miss the right formula that will turn the company around,” noted Jeremy Diamond, director of the Diamond Group, in Baltimore, and a member of the family who used to own the former Food-a-Rama chain there. “Once the country’s largest grocery chain, A&P continues to juggle the executives of the company in search of the best leader.”

Beyond A&P's problems in finding the kind of leadership that will guide it to prosperity, Diamond pointed out that “so many of the stores are outdated ... in appearance, store footprint or location, which makes it difficult to compete with other retailers who are ahead of the curve.”

Choose a Niche

What’s more, Diamond believes, “Customers have psychologically concluded that A&P does not have a niche, and the average [shopper] wants great prices with a pleasant shopping experience. The average [consumer] does not care about A&P’s nostalgia when looking to save money on their grocery bill and searching for great service, selection and quality.”

What can A&P do to halt its downward slide? “They need to reinvent themselves from a marketing standpoint,” Diamond counseled. “They can’t rely on their brand name to be successful. What’s A&P’s niche? They have not focused consistently on price, selection, service or prominent locations. Until they choose a niche and promote it across the company and to the consumer, they will have trouble succeeding in the retail food industry.”

For further commentary on recent A&P news, visit PG's Aisle Chatter Jan. 10 post, "Reading the Tea Leaves."