A&P’s days appear to be numbered
A&P’s days appear to be numbered
For the second time in five years, the A&P grocery store chain has filed for bankruptcy protection, but this time longtime observers say its ability to survive is in doubt.
The Great Atlantic & Pacific Tea Co. Inc., which had its start more than a century-and-a-half ago, filed for bankruptcy protection on Sunday, July 19, and announced that it was looking for potential investors or buyers.
By the following day, reports surfaced that it had sold 120 of its 300 stores and was immediately going to close an additional 25 stores.
Ron Pelger, who writes a column for The Produce News and worked for A&P for more than 30 years, stopped short of saying it was definitely the end for the storied chain, which once was the nation’s largest with more than 16,000 stores. “But it’s like a pencil that you keep on sharpening until the only thing left is a stub,” he said. “That’s hard to write with.”
Pelger, who operates RonProCon, a team of produce industry expert consultants in various disciplines, expressed profound sadness that A&P appeared to be on its last legs. “It is a sad situation. I have been getting emails and phone calls all day long. A lot of people see it as the end.”
Dick DelGizzi, who was assistant director of produce of the New England division of A&P when Pelger was the director, and who still works with Pelger at RonProCon, was one of those people whose email account was burning up with comments about A&P’s demise.
“It’s a sad day for people in the A&P family, but I’ve seen this day coming for the last 25 years,” DelGizzi told The Produce News.
DelGizzi, who worked for A&P for 48 years, from 1952 to 2000, said, “I loved A&P but the story has been the same for many years. They develop a successful store or division and then they sell it. They used to have a division for every state in New England. Maine had a division and its own bakery. You can’t do that without a lot of stores.”
But over the years he said management paid too much attention to cutting costs and not enough attention to sales and running a good store. He noted that five years ago he was quoted in a story in this paper about A&P in which he predicted the company would continue to downsize until there was nothing left.
“I stand by that prediction,” he said.
DelGizzi said that at one point in the last 15 years, A&P appeared to be headed in the right direction by unloading some regions and concentrating on being an East Coast chain with 400 to 500 stores. But instead, he said, the chain continued selling off profitable stores to pay the bills with no viable plan for the future.
Pelger said it is impossible to point to one misstep but noted that A&P got rid of a lot of talented middle-management folks over the years.
He said an organization needs good people between senior management and the rank-and-file to keep the employees motivated.
“You need managers to tell the employees they are doing a good job,” he said. “I feel very bad for the people involved. There are a lot of good people there.”
Pelger expressed hope that whoever buys various stores keeps the employees, but he acknowledged that sales of multiple stores typically lead to layoffs. “Remember one thing,” he said, “it’s not about A&P’s dilemma, it’s all about the people. We cannot forget about the employees and their families.”
DelGizzi said the end of A&P will be the end of an era as far as he is concerned.
“In the 1950s, if you put your foot in the door, you had a good future,” he said. “If you got a job and put your nose to the grindstone, you could make a living. In my neighborhood, you’d get on the bus and within a quarter’s ride, you’d pass two or three [A&P] stores. In my family, when you turned 16, you’d go work for the local A&P. I worked there and my four brothers worked there.”
While he laments its passing, he places the blame squarely on the shoulders of several chief executives and other senior leaders who didn’t seem to be able to right the ship.
“They didn’t know how to operate a chain,” he said. “They never had a good program in place. The morale in the stores was terrible. To those of us who worked at and loved A&P, it was more embarrassing than anything else.”
As far as A&P is concerned, the chain’s official statement did not seem to indicate much confidence that the supermarket would survive.
“After careful consideration of all alternatives, we have concluded that a sale process implemented through Chapter 11 is the best way for A&P to preserve as many jobs as possible, and maximize value for all stakeholders,” CEO Paul Hertz said a statement.
A&P listed $2.3 billion in debts and $1.6 billion in assets in its bankruptcy filing. On July 21, several other chains, including Acme and Stop & Shop, announced plans to buy some of the A&P stores.