| Type | Public (OTC Markets Group: GAPTQ) |
|---|---|
| Industry | Retail |
| Founded | New York City (1859) |
| Founder(s) | George Gilman |
| Headquarters | Montvale, New Jersey, United States |
| Key people | Sam Martin, President & CEO |
| Revenue | US$9.5 Billion (FYE February, 2009)[1] |
| Employees | Approx. 40,688 |
| Divisions | Fresh (A&P/Waldbaum's/SuperFresh) Discount (Food Basics) Gourmet (The Food Emporium) Price Impact (Pathmark) Price Impact (Pathmark Conversions) Own Brands (On Point, Inc) A&P Liquor A&P Warehouse Liquors |
| Website | aptea.com |
The Great Atlantic & Pacific Tea Company, better known as A&P, is a supermarket and liquor store chain in the United States. Its supermarkets, which are under six different banners, are found in Connecticut, Delaware, Maryland, New Jersey, New York, and Pennsylvania. A&P's liquor stores, known as Best Cellars, are found in Connecticut, Massachusetts, and Virginia.[2] A&P's corporate headquarters are in Montvale, New Jersey.[3] Supermarket News ranked A&P #19 in the 2010 "Top 75 Food Retailers and Wholesalers" based on 2009 fiscal year estimated sales of $9.1 billion.[4] Based on 2009 revenue, A&P was the 34th largest retailer in the US.[5] From 1915 through 1975, it was the largest food retailer in the nation (until 1965, the largest US retailer of any kind).[6] A&P is considered an American icon.[7] The Wall Street Journal, in an editorial on December 10, 2010, said that "A&P was as well known as McDonald's or Google is today" and that A&P was "Wal-Mart before Wal-Mart."[8]
What is now A&P began in 1859; it established a small chain of retail tea and coffee stores in New York City and a national mail order business. It grew to 70 stores by 1878. In the late 19th century, A&P, still a tea and coffee company, became the country's first grocery chain. At the turn of the century, it operated almost 200 stores. The company grew dramatically after introducing the economy store concept in 1912; growing to 1,600 stores in 1915. After World War I, the company opened stores offering meat and produce. In 1930 the company, now the world's largest retailer, reached $1 billion in sales with 16,000 stores.[9] In 1936, A&P adopted the self-serve supermarket concept and opened 4,000 larger stores by 1950.[10]
A&P's decline began in the 1950s when it failed to keep pace with chains which opened larger, modern supermarkets with features demanded by customers. By the 1970s, A&P stores were out of date; its efforts to combat high operating costs resulted in poor customer service. In 1975, the company hired outside management, closing older stores and building modern ones. When these efforts failed to turn the company around, the heirs of the original owners, and foundations which that owned a majority of the stock, sold to the German Tengelmann Group. A&P then launched a store-closing program financed by the surplus assets of its pension plan.[11]
Starting in 1982, A&P acquired several chains; these stores operated through their names rather than A&P. While A&P regained profitability in the 1980s, in 2002 it operated at a record loss because of new competition, especially Wal-Mart. A&P closed more stores, which included the sale of its large Canadian division. In 2007, A&P purchased Pathmark, one of its toughest competitors; A&P again became the largest supermarket chain in the New York City area. Highly leveraged after this acquisition, the company experienced financial difficulties because of the recession and filed for Chapter 11 protection in 2010. In late 2011, A&P implemented a restructuring plan to emerge from bankruptcy.[12][13]
Contents |
The forerunner of A&P was founded in the 1850s as Gilman & Company by George Gilman (1826–1901) to continue his father's leather tanning business; in 1858 the firm's address was 98 Gold Street in Manhattan. Gilman's father died in 1859, leaving the son wealthy. That year, Gilman & Company entered the tea and coffee business from that storefront. One source speculates that Gilman decided to enter a more respectable business in light of his wealth. In May 1861, Gilman turned over the tanning business to his brother Winthrop; George moved his tea business to 129 Front Street. Initially, Gilman & Company was a wholesaler. In early 1863 the firm became a retailer, as Great American Tea Company. Quickly, it opened five stores and moved its office and warehouse to 51 Vesey Street.[10]
Gilman proved to be a master at promotion; the business quickly expanded by advertising low prices. The firm was able to offer low prices by acting as both the wholesaler and retailer. Gilman also built a nationwide mail order business. By 1866, the firm was valued at more than $1 million. In 1869, the transcontinental railroad was completed; Gilman changed the firm's name to Great Atlantic & Pacific Tea Company to market the then-new concept of prepackaged tea under the Thea-Nector brand. The tea company continued to use the Great American name for mail order purposes. In 1871, A&P introduced another marketing concept when it offered discounts with the purchase of coffee and tea at its stores.[10]
George Huntington Hartford (1833–1917) joined Gilman & Company as a clerk by 1861; he later was promoted to bookkeeper, then cashier in 1866. By 1871 Hartford was in a position of authority and was responsible for expanding A&P to Chicago after the great fire. A&P's first store outside New York City was opened within days after the disaster. The firm rapidly expanded; in 1875 A&P had stores in 16 cities. In 1878, Gilman left the active management of the firm to Hartford. By then, the firm operated 70 lavishly-equipped stores and a mail order business with combined annual sales of $1 million.[10]
To raise revenue, Congress significantly raised tariffs on tea and coffee. Profits on these products declined and in about 1880 A&P also started to sell sugar in its stores. The company continued aggressive growth and by 1884 operated stores as far west as Kansas City and south as Atlanta. The company also operated wagon routes to serve rural customers. About this time, two of Mr. Hartford's sons, George Ludlum Hartford (1864–1957) and John Augustine Hartford (1872–1951) joined the firm. Company lore is that George convinced his father to expand the product line to include A&P branded baking powder. Over the next decade, the company added other A&P branded products such as condensed milk, spices, and butter. As it expanded its offerings, the tea company was gradually creating the first grocery chain. By the end of the century, the firm had sales of $5 million from 198 stores as well as its mail order and wagon route operations. However, other new grocery chains were expanding more rapidly and blanketing their respective territories while the tea company's stores were spread over a much larger area. The firm quickly found itself at a disadvantage.[10]
In 1901, George Gilman died without a will, starting a legal battle among his numerous heirs. Hartford stepted into the battle by asserting that, in 1878, Gilman gave him half of the company in a unwritten partnership agreement. Evidence provided to the court established that Hartford received half of A&P's profits since 1878 and that the company's leases were in his name. The heirs realized that without Hartford, the firm would quickly become unprofitable. Therefore, they agreed to a settlement where A&P was incorporated, with $2.1 million in assets. Under this agreement, the Gilman heirs received $1,250,000 in preferred shares at 6% interest, while Hartford received $700,000 in common stock and the remainder of the preferred shares. This gave Hartford control of the voting stock. Over several years, Hartford was able to repurchase the preferred shares from the Gilman heirs.[11] At the end of the litigation, A&P dropped to fifth nationally[10] and the Hartfords moved to rebuild the enterprise. A&P opened an average of one store every three weeks, and expanded wagon routes to over 5,000. A nine-story headquarters and warehouse was built in Jersey City; it later expanded to include a manufacturing plant and bakery.[11]
By 1908, George Hartford Sr. divided management responsibilities among his sons, with George Jr. controlling finance and John directing sales and operations. The two ran A&P for over 40 years. The younger Hartford moved aggressively to adopt the now-familiar A&P brand, dramatically increasing the product line. To make space for the new items, A&P replaced in-store premiums with S&H Green Stamps. By 1912, A&P operated 400 stores and averaged a 22% gross margin, resulting in a 2% profit.[10]
Food prices were a political issue in the 1912 presidential race; some chains experimented with a no-frills format.[10] After long debate, the Hartfords agreed to John's proposal to experiment with an economy store designed to operate at a 12% gross margin. Capitalized at only $3,000 including its initial inventory, the store operated with only a manager and eliminated fancy fixtures and premiums. Within two months, weekly sales increased to $800 and the store achieved a 30% annual return on investment. A&P quickly expanded the concept; by 1915 the chain operated 1,600 stores. A&P's tremendous growth created problems with supplers. Cream of Wheat was the largest breakfast food manufacturer; A&P demanded that all retailers adhere to the company's pricing of 14 cents per box. A&P purchased the product at wholesale, 11 cents per box, and decided that a 1-cent mark-up was appropriate for its economy store format. Cream of Wheat cut off supplies and A&P sued. U.S. District Court Judge Charles Hough ruled against A&P, saying that a manufacturer can establish retail prices. As a result, A&P and other large chains significantly expanded manufacturing private brands.[10]
Hartford Sr. died in 1917; his will was a one-generation trust equally divided among his five children. The trust was administered by George Jr. and John; both exercised control over the company's stock. A&P's leadership remained constant until two brothers died in the 1950s.[10]
After World War I, A&P rapidly expanded; in 1925 it operated 13,961 stores.[14] The new, combination stores were included space for meats, produce, and dairy, as well as traditional grocery items. Sales reached $400 million and profit was $10 million. However, Hartford was concerned that gross margins had reached 22% to cover higher costs and that the chain veered from its low-cost discipline. In early 1926, the brothers discussed the situation with division management and launched a program to lower prices and improve cost controls. That year, sales increased 32%; A&P moved its headquarters to the new Graybar Building adjacent to Grand Central Terminal.[11] In 1927, A&P established a Canada|Canadian]]; by 1929 it operated 200 stores in Ontario and Quebec.[15] In 1930, the company's 16,000 stores reached $1 billion[9] resulting in a 25% grocery-store share in its operating areas, and about 10% nationwide. No retail company had ever achieved these results. A&P was twice as large as the next largest, Sears, and four times that of Kroger. Unlike most of its competitors, A&P was in excellent position to weather the Great Depression. The Hartfords built their chain without borrowing; their low-price format resulted in even higher sales. From 1929 through 1932, A&P reported a record $110 million in after-tax profits with each Hartford child earning over $5 million yearly in dividends and equity.[11]
A&P's success caused a backlash that threatened to destroy the company. Thousands of mom-and-pop grocery stores could not match A&P's prices. While small operators had little political clout, they were supplied by thousands of wholesale distributors which had considerable political influence. Anti-chain store movements gained traction in the 1920s, but became significantly stronger during the Depression. In 1935, Texas Congressman Wright Patman introduced legislation that would levy federal tax on chain stores. If adopted, this legislation would have put A&P out of business. While this legislation did not move in Congress, in 1936 Patman sponsored the Robinson-Patman Act that would outlaw charging different prices to similar customers. Patman then reintroduced his anti-chain store tax. A&P retained a lobbyist and dropped its opposition to unionizing activities of the politically powerful American Federation of Labor. George and John Hartford also took the unusual step of publishing a letter pointing out that Patman's legislation would significantly increase food prices. The tide of public opinion turned against the bill.[10]
The first supermarket opened in California. In 1930, Michael Kullen opened his first King Kullen supermarket in Queens, New York. Two years later, Big Bear opened in Elizabeth, New Jersey and quickly equaled the sales of 100 A&Ps. A&P lost ground; in 1933, sales dropped 19%, to $820 million. Finally, the Hartford brothers agreed to open 100 supermarkets, the first of these was in Braddock, Pennsylvania. The new stores proved to be very successful; in 1938, A&P operated 1,100 supermarkets. The chain continued to build supermarkets; in 1950 A&P operated 4,000 supermarkets and 500 smaller stores. Sales reached $3.2 billion with an after-tax profit of $32 million.[11]
A&P's success attracted the attention of President Roosevelt's anti-trust chief, Thurman W. Arnold, who was urged to investigate A&P by Congressman Patman. In 1941, following Pearl Harbor, the military placed many large companies off-limits to the anti-trust division because of defense priorities, leaving grocery stores as an option. The next year, A&P and its senior executives, including the Hartford brothers, were criminally charged for restraint of trade in Dallas federal court. However, in 1944 prosecutors withdrew the complaint realizing that the Dallas federal judge thought the case was weak. The same day, charges were filed in Danville, Illinois, and were assigned Federal Judge Walter Lindley. The prosecution complained that A&P had a unfair competitive advantage because its vertical integration including manufacturing, warehousing, and retailing allowed it to charge lower prices. Prosecutors also complained that A&P refused to buy from food companies that insisted on selling through brokers or refused to give A&P advertising allowances. They judges contended that if unchecked, A&P would become a monopoly. The company countered that its business share was about 15% range, and that its low-cost strategy resulted in a significant improvement in the nation's nutrition and standard of living. Judge Lindley agreed with the government, fining each defendants $10,000.[10]
In 1949, the U.S. Court of Appeals upheld Lindley's decision; A&P decided not to appeal further. In September, the anti-trust division asked the court to order the spin-off of A&P's manufacturing operations, and the break-up of A&P's retail operations into seven independent companies.[10] Thousands of letters poured into the Justice Department supporting the company; the Hartford brothers gave extensive interviews with Time which put them on the magazine's November 13, 1950 cover.[9] Time wrote that, next to General Motors, A&P sold more goods than any other company in the world. John was quoted as saying "I don't know any grocer who wants to stay small. I don't see how any businessman can limit his growth and stay healthy".[14] The case dragged on until the business-friendly Eisenhower administration. In late 1953, the government agreed to drop its demands to break up the company if A&P shut down its produce brokerage that also supplied competitors.[10]
In 1951, John Hartford died suddenly in the Chrysler Building while returning from a meeting of the auto maker's board. His older brother remained as A&P's Chairman and Treasurer and appointed the company's long time Secretary, Ralph Burger as the new President.[11] While Burger started with the company in 1910 as a clerk in the Glens Falls, New York store,[16] he was a strong staffer who lacked John Hartford's strategic marketing skills. Under Burger, A&P continued to report record sales and operated at an expense ratio of only 12.6% of sales when the industry average was 15%. Burger was also the President of the Hartford Foundation, assuring his control of the company when George died in 1957. George Hartford Senior's trust was dissolved and the company's stock was listed on the New York Exchange at an opening price of $59. For the first time, the company also elected six outside directors on the board. In late 1961, the stock peaked at $70 and then started a gradual decline.[11]
The seeds for A&P's 50 year fall from the world's largest retailer to a relatively small regional food chain and bankruptcy were planted in the 1950s and 1960s.
Burger attempted to reverse downward tonnage figures by reintroducing trading stamps and created the company's own program known as plaid stamps. However, by late 1962 the initial sales gains evaporated and the six outside directors threaten to resign unless Burger retired. When he left the company in May 1963, the stock traded in the $30 to $40 range.[11]
Burger was replaced with a succession of Presidents who were unable to stem the downward spiral. In 1971, the board turned to William J. Kane who started with the company in 1934 as a full time store clerk and worked his way up the ranks. Kane believed that the company could be turned around by focusing on basic store operations including cleanliness, product availability, customer service and courtesy. When his program stalled, he implemented a strategy to substantially cut prices by converting the chain to a warehouse store concept that became known as WEO (Where Economy Originates). The problem was that at least half of the stores were not large enough to properly implement the program and losses quickly mounted. By the beginning of 1973, the stock dropped to $17 and Charles Bluhdorn of Gulf+Western made tender offer at $20 per share. Kane rejected the offer, but at least some stockholders thought that the offer was attractive considering the company's continuing difficulties.[11]
The board retained Booz-Allen to develop a plan to turn the company around. In February 1975, the plan proposed the closure of 36% of the chain's 3,468 stores. Kane agreed to resign and was replaced by Jonathan Scott, the 44-year-old President of the successful Albertsons chain. By then, A&P's headquarters had moved to a new office complex in Montvale, New Jersey.[11] Scott implemented the Booz-Allen plan by closing 1500 stores in three years reducing the chain to 1,978 units. He hired numerous executives from other companies and pushed authority down to the regional level. During his first three years, the company built 300 A&P supermarkets ranging from 23,000 square feet (2,100 m2) to 32,000 square feet (3,000 m2) along with its first combination grocery-drug stores with 40,000 square feet (3,700 m2) of selling area under the Family Mart trade name. Scott continued Kane's efforts to improve basic store operations including cleanliness and customer service and instituted a large training program. By the end of 1977, weekly per store sales increased from $37,000 to over $70,000 and total sales increased from $6.4 billion to $7.2 billion despite the large store closing program. Manufacturing was also reorganized and older plants closed.[17] While initial results were promising, by 1978 the company profits started to slide backward again due to economic conditions caused by high inflation.[11]
With the share price down to $7, the Hartford Foundation finally came to the conclusion that it could no longer wait for a turn around and Erivan Haub, owner of the German Tengelmann expressed interest. Born in 1930, Haub studied retailing in the United States after the war and built the family's grocery business into a 2000 store chain with annual sales of $2 billion. He still lived in the United States for part of the year and his children were born in America. He agreed to pay $7.375 per share for 42% of the A&P's stock and ultimately increased his holdings to over 50%. Scott did not renew his five year contract and Haub hired James Wood to become Chairman. Wood, an Englishman who was the same age as Haub, previously ran the Grand Union supermarket chain that competed against A&P. Many executives recruited by Scott left the company and were replaced by Wood's associates from Grand Union.[11]
In Germany, Tangelmann had considerable success with PLUS stores that were smaller units featuring low price private label products along with a limited assortment of meats and produce. A&P opened several divisions of PLUS stores in the United States to take advantage of the company's manufacturing plants and numerous small stores. However, the program quickly failed to win American customers who were attracted to other chains offering low prices on national brands.[11]
In October 1981, the company announced a massive program to close all but about 1,000 stores and the coffee plants. Under the plan, whole divisions including Chicago were shuttered along with the Horseheads plant and numerous other manufacturing facilities. To finance this program, the company planned to terminate its non union pension plan and use its $200 million surplus. The plan's obligations were covered by annuities that cost only about $130 million because of the high interest rates at that time. Going forward, the company's non union employees were covered by a defined contribution 401K plan. William Walsh, a recently retired executive, filed a class action that was ultimately settled by increasing the value of the annuities. The company still realized over $200 million and was not required to pay taxes because of tax loss carry forwards from previous closing programs.[11]
The Philadelphia division was also slated to close unless the unions agreed to contract concessions. When the unions refused, the company started implementing the plan. The unions offered to purchase the stores, but realized that they did not have the capital required. As an alternative, they agreed to a profit sharing arrangement if the company formed a new subsidiarity and operated under a different name. The new Super Fresh operation proved profitable and company realized that the A&P name itself was no longer an asset in many trading areas.
In 1982, Stop & Shop exited New Jersey (it would return in the late 1990s), and A&P purchased most of these stores to replace obsolete A&P stores. In 1983, A&P bought Kohl's Food Stores (originally part of the Kohl's department store chain) in Wisconsin from BATUS enabling A&P to reenter Wisconsin and Illinois. Next the company reinforced its profitable Canadian division by closing its stores in Quebec market and acquiring Dominion Stores in Ontario.[15] In the United States, A&P constructed larger 40,000-square-foot (4,000 m2) supermarkets for the A&P brand called Future Stores. In 1985, A&P purchased Waldbaum's with stores in southern New York and southern New England, and Food Emporium, an upscale New York City-based chain.[18] These stores mostly replaced under-performing A&P stores (by the early 2000s, all New York City A&P stores were operating under the Waldbaum's or Food Emporium banners). In 1989, A&P acquired Farmer Jack in Michigan and Ohio.
While overall the company returned to profitability, A&P continued to suffer in southern markets. In the 1990s, it exited Georgia, South Carolina, Alabama, North Carolina, Virginia, Kentucky, and Tennessee and sold many of these stores to Kroger. In 1993, A&P began a major overhaul of its stores in the mid-Atlantic region, New Orleans, the Midwestern Farmer Jacks and Kohls, Maryland, Philadelphia, and southern New England. Most of the stores smaller than 40,000 square feet (4,000 m2) were shut down and replaced with stores ranging from 50,000 square feet (5,000 m2) to 80,000 square feet (7,000 m2). The new units included pharmacies, larger bakeries, and more general merchandise.
Wal-Mart gained a dominant position in the grocery industry forcing many existing chains to downsize. By 2000, A&P and its various other brands were down to about 600 stores and two years later declared its largest loss. The company exiting Illinois, Massachusetts, New Hampshire, Vermont, and Wisconsin; the latter with the folding of Kohl's Super Food markets. A&P's was reduced to just over 500 stores. In 2005, A&P sold its 237 store Canadian division, as well as its Eight O'Clock Coffee division, and Food Basics (Canada) to Metro Inc., a grocery retailer based in Montreal, for C$1.7 billion in cash and shares of Metro. On August 7, 2008, Metro announced that the A&P name would be retired over the next year, with its stores rebranded as "Metro". A&P's store brands, Equality and Master Choice, were also phased out in favor of Metro's brands. A&P also announced plans to divest itself of its Midwest operations.[19] In late November 2009, the last Canadian A&P stores, in Sault Ste. Marie, were converted to Metro.
A&P adopted the new slogan, "Fresh Thinking Since 1859." and initially converted over 20 retail stores to its "fresh" (all lowercase letters) format with an additional 40 stores in 2006. The first Fresh Market opened in Denville, New Jersey on August 20, 2004. The Midland Park and Woodland Park, New Jersey Fresh Markets incorporated gourmet food, organics, a wine department, and several food preparation counters which allowed the consumer to taste and purchase fresh meals. The Midland Park unit is a new store located in the upscale Ridgewood area of Bergen County and is the chain's top unit by sales volume.[20] In addition to its format change, A&P changed its logo to a simple red oval, removing the orange and yellow bands that had been in use since the Scott era. The red oval logo now appears on many of the stores that were converted to the "fresh" format, with the signage on some stores simply reading "A&P fresh". Other "fresh" format stores use a modified version of the A&P Food Market logo.
In early 2007, A&P agreed to acquire Pathmark[21] and ultimately paid $1.4 billion for the chain.[22] This allowed A&P to regain its position as the largest grocery retailer in the New York City area, and the second largest in the Philadelphia/New Jersey market. Pathmark is the "price impact" format for the company and eight Super Fresh locations in the Philadelphia market were converted to Pathmark Sav-a-Centers.
When the company celebrated its 150th anniversary in 2009, it was only ranked No. 21 by Supermarket News of the "Top 75 North American Food Retailers", based on 2008 fiscal year estimated sales of $9.6 billion.[23] The Executive Chairman was Christian W.E. Haub, a member of the family that owns the Tengelmann Group of Germany. The President and Chief Executive Officer was Sam Martin. Eric Claus, the former President and CEO, resigned on October 20, 2009. Tengelmann holds an approximate 38.5 percent stake in A&P, with Yucaipa holding a 27.5 percent share; the rest held by individual shareholders and investor groups. The company operated under six retail banners, which included conventional supermarkets, food-and-drug combination stores, and discount food stores.[24] It was down to 395 stores in Connecticut, Delaware, the District of Columbia, Maryland, New Jersey, New York, and Pennsylvania. (Its Best Cellars wine store chain does not operate in Pennsylvania, where laws permit wine sales only in Commonwealth-owned and operated liquor stores, and wineries, which are allowed to sell their own product), Best Cellars also operates in Massachusetts and Virginia. The company has leased space in three urban Pennsylvania stores to the Pennsylvania Liquor Control Board, which operates "Wine & Spirits" stores in the front of these locations.
The recession hit many food chains as customers migrated to Wal-Mart in even greater numbers. A&P was especially hard hit because of its increased debt load to complete the Pathmark purchase. In June 2010, A&P stopped paying $150 million in rent at its closed Farmer Jack locations resulting in 24 lawsuits from property owners.[25] On August 13, 2010, A&P announced that it would close 25 stores; these supermarkets were "facing real estate and cost issues, and underperforming non-core stores."[26] The stores were in Connecticut, Maryland, New Jersey, New York, and Pennsylvania including thirteen Pathmarks, six A&Ps, two Waldbaum's, and four SuperFresh. These stores were scheduled to close by mid October (see "Store dipositions" table).[27] On September 8, 2010, the company announced it was selling seven stores in Connecticut to BigY. The transfer took place in October 2010, with BigY not promising to reopen all seven (see "Store dipositions" table).[28]
On December 10, 2010, bankruptcy rumors surfaced and the stock tumbled from over $3 per share to below $1 before trading was halted. Two days later, it was announced that due to competition, and a weak economy, A&P was filing for Chapter 11 bankruptcy.[12][13] According to documents filed in US Bankruptcy Court in White Plains, New York, A&P listed over $1 billion in assets, and a similar amount of debt. JP Morgan Chase was to provide $800 million in debtor-in-possession financing. A&P had a net loss of $153.7 million for the 12-week period ending September 11, 2010. Its total assets were $2.53 billion and liabilities were $3.21 billion. The company was removed from the New York Stock Exchange after its stock price fell 92 percent during 2010 to below $1 per share.[29] Pennsylvania-based Martin's Potato Bread discontinued supplying A&P-branded stores after the company stopped paying Martin's vendors. In addition, A&P's bankruptcy filing led to cash problems at Tastykake, then also headquartered in Pennsylvania. (Tastykake was acquired by Flowers Foods in April 2011.)
On February 15, 2011, A&P announced that 32 additional stores would close by spring (see "Store dispositions" table). A&P lost about $35 million in March and on April 13 announced that 25 Super Fresh stores would be closed, including those already sold. These closings took place by July in Delaware, Maryland, and Washington, D.C. Also in April, it was announced that the A&P in Armonk, New York would be replaced by a Rhode Island-based pharmacy, CVS. This A&P will close in early 2012. The company lost about $56.5 million in June; and abandoned its "Lower Price Project", which began in spring 2010.
In a November 3 press release on its website [1], A&P announced that it had entered into an agreement to receive $490 million of debt and equity financing from private investors The Yucaipa Companies LLC, Mount Kellett Capital Management LP, and investment funds managed by Goldman Sachs Asset Management, L.P, subject to approval of the U.S. Bankruptcy Court. The agreement will enable A&P to complete its restructuring, and emerge from Chapter 11 as a private entity in early 2012. The investment will form the basis of A&P’s plan of reorganization, which the Company anticipates filing by November 14. “This investment commitment is a very important step in A&P’s financial and operational turnaround,” said A&P’s President and Chief Executive Officer Sam Martin. “It positions us for a bright future with solid financial backing from sophisticated investors who know our company and industry well, and who also share our vision for A&P’s future.” Martin added "...With this fresh capital investment and the Court’s approval of our plan of reorganization, we anticipate emerging from Chapter 11 early next year in a much stronger competitive and financial position.” Following the closing of the transaction and the Company’s emergence from Chapter 11, A&P’s Board of Directors will be dissolved, and a new Board of Directors will be appointed in accordance with the terms of the plan of reorganization. During the Company’s exit process, A&P intends to continue to operate its stores as usual.
The A&P Historical Society describes early stores as "resplendent emporiums" painted in vermilion and equipped with a large gas light T sign. Interiors included crystal chandeliers, tin ceilings, and walls with gilt-edged Chinese panels. A clerk stood behind a long counter to serve customers (self-service did not become common until the 1930s) and the cashier's station was shaped like a Chinese pagoda. When the company started offering premiums, the wall opposite the counter was equipped with large shelves to display the give-a-ways. After John Hartford became responsible for marketing about 1907, the chain switched to S&H trading stamps to free space for the expanding lines of groceries available in the stores. The economy stores John Hartford developed in 1912 dispensed with the frills. Typically 600 square feet (56 m2), they were equipped with basic shelving and a small ice box. The company would only agree to short leases so that it could quickly close locations that were not profitable.[16]
The early combination grocery/meat/produce stores date to the mid 1920s followed ten years later by self-service supermarkets, which were still small by today's standards. On average, each first generation supermarket replaced six older combination stores. The company's policy of only agreeing to short term leases resulted in considerable differences in store design until the 1950s.[16] Except for the West Coast stores (which had a marina design), A&P stores constructed from 1955 to 1970 usually featured a distinctive cupola and weather vane (bow and truss) design on the buildings' roofs, red brick finish on the walls (including the back), as well as a raised triangular point in the front facade where the store's lolli pop logo was placed. Some older stores were remodeled to include these features, which became a store trademark.[30] However, during this period, A&P stores were considerably smaller than other chains. As late as 1971, half of the stores were under 8,000 square feet (740 m2).[11]
During the Scott era, store design was modernized and controlled from headquarters. The company developed four prototypes at 23,000 square feet (2,100 m2), 28,000 square feet (2,600 m2), 30,000 square feet (2,800 m2) and 32,000 square feet (3,000 m2). Combination grocery/drug stores were opened under the Family Mart trade name with 40,000 square feet (3,700 m2) of selling area. The company also built a store in Saudi Arabia. During the Wood era, the company developed the Futurestore concept with a stark black and white decor.[11] In the mid-1990s, A&P began adding pharmacies to the "Futurestores" and concentrated on building stores of 50,000 square feet (4,600 m2) to 80,000 square feet (7,400 m2). Today's A&P stores include bakeries, full-service delicatessens, full-service meat, and pharmacies, in addition to traditional grocery departments. As of 2011, few "weather vane" stores remain as A&P supermarkets.
| Year | No. of Stores |
|---|---|
| 1863 | 5 |
| 1878 | 70 |
| 1900 | 400 |
| 1915 | 1,600 |
| 1930 | 16,000 |
| 1950 | 4,500 |
| 1970 | 4,000 |
| 1980 | 2,000 |
| 1990 | 1,000 |
| 2000 | 600 |
| 2008 | 460 |
| 2011 | 338 |
| Municipality | Banner | Disposition | Disposition date (yyyy-mm-dd) | Notes |
|---|---|---|---|---|
| Berlin, Connecticut | A&P | Closed | 2010-10-13 | [31] |
| Armonk, New York | A&P | Closing | 2012 | to be replaced by a CVS Pharmacy outlet |
| East Brunswick, Lodi, Maplewood, Woodbridge, New Jersey | A&P | Closed | 2010-10-13 | Maplewood A&P oldest Company store in operation (c. 1942) at time of closing[31] |
| Yorktown Heights, New York | A&P | Closed | 2010-10-13 | [31] |
| Belleville (Washington Av.); Fort Lee, Marlboro Township, North Bergen, North Brunswick, South Plainfield, Union, Woodland Park, New Jersey |
Pathmark | Closed | 2010-10-13 | [31] |
| Garden City; Monsey, New York | Pathmark | Closed | 2010-10-13 | [31] |
| Centereach; Farmingdale; Levittown, New York | Waldbaum's | Closed | 2010-10-13 | [31] |
| Towson, Maryland | SuperFresh | Closed | 2010-10-13 | Dulaney Valley[31] |
| Wheaton, Maryland | SuperFresh | Close | 2010-10-13 | [31] |
| West Hartford, Connecticut | Waldbaum's (Fresh) | Sold to BigY | October 2010 | [32] |
| Branford, East Haven, Middletown, Mystic, Naugatuck, Old Lyme, Connecticut | A&P (Superfoodmart) | Sold to BigY | October 2010 | [32] |
| Bridgeport, Connecticut | Food Basics | Close | April 2011 | |
| Glasgow, Delaware | Pathmark | Close | 2011 spring | |
| Ocean City, Maryland | SuperFresh | Close | 2011 spring | Gold Coast Mall |
| Deptford, New Jersey | Pathmark | Close | 2011 spring | |
| Gillette, New Jersey | Pathmark | Close | 2011 spring | |
| Hillsborough, New Jersey | Pathmark | Close | 2011 spring | |
| Livingston, New Jersey | Pathmark | Close | 2011 spring | |
| Middletown, New Jersey | Pathmark | Close | 2011 spring | |
| North Hackensack, New Jersey | Pathmark | Close | 2011 spring | |
| South Plainfield, New Jersey | Pathmark | Close | 2011 spring | |
| Whippany, New Jersey | Pathmark | Close | 2011 spring | |
| Barnegat, New Jersey | A&P | Close | 2011 spring | |
| Flanders, New Jersey | A&P | Close | 2011 spring | |
| Manville, New Jersey | A&P | Close | 2011 spring | |
| Cape May Courthouse, New Jersey | SuperFresh | Close | 2011 spring | |
| Hamilton, New Jersey | SuperFresh | Close | 2011 spring | |
| Hammonton, New Jersey | SuperFresh | Close | 2011 spring | |
| Hightstown, New Jersey | SuperFresh | Close | 2011 spring | |
| Mouth Holly, New Jersey | SuperFresh | Close | 2011 spring | |
| Carmel, Greenburgh, New Rochelle, Port Chester, New York |
A&P | Close | Spring 2011 | |
| Brooklyn (Nostrand Av.), Commack, Harsdale, New York | Pathmark | Close | Spring 2011 | |
| Farmingdale, Smithtown, Valley Stream, New York |
Waldbaums | Close | Spring 2011 | |
| Lionville, Pennsylvania | SuperFresh | Close | 2011 spring | |
| Yardley, Pennsylvania | SuperFresh | Close | 2011 spring | |
| Bethlehem, Pennsylvania | Pathmark | Close | 2011 spring | |
| Dover, Delaware | SuperFresh | Close | 2011-07 | [33] |
| Milford, Delaware | SuperFresh | Close | 2011-07 | [33] |
| Arbutus, Maryland | SuperFresh | Close | 2011-07-06 | |
| Arnold, Maryland | SuperFresh | Close | 2011-07-06 | |
| Baltimore, Maryland (2) | SuperFresh | Close | 2011-07-06 | |
| Brunswick, Maryland | SuperFresh | Close | 2011-07-06 | |
| Cambridge, Maryland | SuperFresh | Close | 2011-07-06 | |
| Chestertown, Maryland | SuperFresh | Close | 2011-07-06 | |
| Elkridge, Maryland | SuperFresh | Close | 2011-07-06 | |
| Ellicott City, Maryland | SuperFresh | Close | 2011-07-06 | |
| Frederick, Maryland | SuperFresh | Close | 2011-07-06 | |
| Glen Burnie, Maryland | SuperFresh | Close | 2011-07-06 | |
| Lutherville-Timonium, Maryland | SuperFresh | Close | 2011-07-06 | |
| Mount Airy, Maryland | SuperFresh | Close | 2011-07-06 | |
| Nottingham, Maryland | SuperFresh | Close | 2011-07-06 | |
| Odenton, Maryland | SuperFresh | Close | 2011-07-06 | |
| Parkville, Maryland | SuperFresh | Close | 2011-07-06 | |
| Rosedale, Maryland | SuperFresh | Close | 2011-07-06 | |
| Salisbury, Maryland | SuperFresh | Close | 2011-07-06 | |
| Towson, Maryland | SuperFresh | Close | 2011-07-06 | |
| Westminster, Maryland | SuperFresh | Close | 2011-07-06 | |
| White Oak, Maryland | SuperFresh | Close | 2011-07-06 | |
| Woodlawn, Maryland | SuperFresh | Close | 2011-07-06 | |
| Washington, D.C. | SuperFresh | Close | 2011-07-06 | 48th Street NW; the last remaining A&P-affiliated store in D.C. |
For decades, A&P pioneered in the use of store brands. Eight O'Clock, Red Circle, and Bokar coffees, Our Own tea, Ann Page, and Jane Parker foods, to regular customers, were almost as notable as retail brands the stores carried. Other A&P brands included Sultana, Iona, Cap'n John, Dexo, Dexola, Yukon Club, Sail, Bright Sail, Grandmothers, Marvel, Penguin, Super Right, White House, Cherri-Aid, Sparkle, Bonesse, Sunnyfield, Crestview, Wildmere, Ched-o-bit, Mel-o-bit processed cheeses, Nutley margarine, and Sunnybrook/Silverbrook butter.
In the 1990s A&P introduced two store brands, America's Choice and Master Choice. The America's Choice name was a rebranding of the entire A&P-brand line, which replaced many older brands, including Jane Parker and Ann Page. Master Choice was A&P's line of premium items including meat and baked goods. Simultaneously, A&P introduced the Health Pride brand of health and beauty aids. Meanwhile, A&P sold Eight O'Clock Coffee to a San Francisco investment firm in 2003; stores continue to sell the coffee. (Some SuperFresh stores, plus Super A&P stores in New Jersey include Eight O'Clock Coffee Cafes, built when A&P owned the brand. The Cafes offer coffee and other drinks (America's Choice soda, Rockstar energy drinks), chips, candy, bagels, donuts, fresh baked goods, sandwiches, wraps, and other items. They usually have that day's newspapers available. Added in 2008 and 2009 were the environmentally sensitive Green Way brand, Hartford Reserve (replacing Master Choice), and America's Choice Gold, a brand positioned between America's Choice and Hartford Reserve in terms of quality. More recently, it was announced that America's Choice Reserve would replace the America's Choice Gold line in produce, poultry, bakery, and deli.
In 2009, the 150th anniversary of A&P, store brands introduced included Via Roma (Italian cheeses, pasta, pizza, fresh cannoli), Preferred Pet (dog and cat foods), Market Spa (shampoos, conditioners, and lotions) Live Better (OTC health products, including pain relievers, allergy relief, cough drops, vitamins) and America's Choice Kids (child-healthy foods.) The number of store-brand products had grown to over 20,000. In 2010, A&P added entry-level store brands (Food Basics and Home Basics) in yellow packaging. "See yellow, save green" is the slogan for these brands. Food Basics' products include: discount-priced canned and bottled products, evaporated milk, frozen confectionery, produce, and meat, while Home Basics' line include bargain-priced paper, toilet tissue, detergents, and plastic food wraps.
A&P's newest store brand is The Food Emporium Trading Company.
Current banners
Defunct banners
The low-price warehouse concept returned when Costco began in 1983.
The publication Woman's Day was launched by A&P in 1937. Originally sold exclusively at A&P stores, Woman's Day was purchased by an independent publisher in the mid-1950s, and no longer has any connection to the supermarket chain.
36. http://aptea.com/pdf/AP%20Investment%20Agreement%20Press%20Release_11%203%2011_Final.pdf
|
|||||