Say it Ain't So!

... I said yesterday when I heard this news on the radio: A&P Supermarkets may be filing for bankruptcy!

Nooooooooooo!

Unless of course it's replaced by a supermarket offering the same array of conveniences: bakery, liquor, fresh flowers... or how about a Trader Joe's?

But no change is the change for me.

Sure, their big marketing ploy, "Lower Price Project" is a major stinker-- aside from the attractive labels. And they are lovely. But the problem with the "Lower Price Project" campaign is A&P's reliance on attractive labels vs. attractive prices.

See what I mean?


But sheer convenience plus the desire to support a local Hoboken business /employer has me shopping there almost daily. In fact, the A&P is my giant refrigerator across the street.

Out of ketchup? Hold that forkful of roast beef, I'll be back in one minute... Here it is!

You'd like sour cream on that baked potato? OK, be right back...
And here you go!

What a loss to the the neighborhood if A&P goes. And to me. So what seems to be the problem?

Says The Wall Street Journal:

In recent years, A&P has also faced supply-chain challenges. By the mid-2000s, A&P management had contracted out virtually all of its stores' warehousing and distribution to a company that specializes in such operations.

But, said Burt Flickinger III, a retail consultant for Strategic Resource Group, the supermarket chain often had difficulty keeping its stores stocked with items it had advertised as discounted, such as breakfast cereals, frozen pizzas and Driscoll's fresh blueberries.

The high out-of-stock rates pushed many shoppers to competitors' stores. "A mother could not go into an [A&P] store with a grocery list and put together a dinner for that night, so she'd go to a competitor," Mr. Flickinger said.

The shopper frustration added to the pressure on sales. An A&P store generates about $400,000 in weekly sales, far below the $650,000 grossed at Stop & Shop and ShopRite, according to Jim Hertel, a retail consultant with Willard Bishop LLC in Barrington, Ill.

The lower per-store sales have also driven up A&P's labor costs to 14% to 16% of overall sales, several percentage points above that of its competitors. The gap is significant in an industry that, on average, generates $1.50 of profit for every $100 of revenue

Hmmm... well, I haven't found stocking to be the issue over there. It's the prices.

For instance, I had a major craving for one of my favorite things yesterday: Sabra Supremely Spicy Humus.

Hey, there it is!


Mmmmm... a couple of spoonfuls in a whole wheat pita with lettuce, tomatoes, a little red onion.... oooooooh la-la.

So, I went to A&P on a tear to buy some when the price stopped me cold: $4.49! It was only just $3.49 recently... what the hell? Are chickpeas being slaughtered in the wild and going extinct? Has interplanetary chili pepper demand made it competitive with the price of platinum?

Lord in heaven!

This kind of 'sticker-shock' event is repeated numerous times (it seems) almost every time I go there. And I WANT to shop there. But how can middle-class folks afford NOT to patronize the cheaper outlet stores?

Oh, but have you been to Trader Joe's? It's all that and a bag of chips-- whole grain chips with flax seed and Omega-3 fatty acids. I recently took a friend there... now he loves me forever. Well he doesn't really, but he loves Trader Joe's! Who wouldn't?

Back to the humus.

The story has a happy ending- I didn't buy it. Which is a good thing because when I got home and checked my whole wheat pita bread, it had turned a soothing mossy green. Had my pita been there that long? I guess so.

Thank goodness I didn't spend $4.49 on a green pita sandwich.

What do you-all think? Does anyone have a crystal ball?

If so, please tell us how this all ends.

Comments

  1. This comment has been removed by the author.

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  2. Just because they went bankrupt doesn´t mean they´ll be out of biz. Hopefully Hoboken will remain open.

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  3. Right. The A&P filed for Chapter 11, which is a corporate reorganization. They did not file for a Chapter 7 going-out-of business liquidation. That said, the head honchos will be working with Chapter 11 counsel and their accountants to determine what underperforming assets they should shed. There will definitely be some store closures. But, A&P owns Pathmark, Food Emporium, Waldbaums and many other chains. That's a lot of stores to consider. The grocery business is tough...the profit margin is about one percent. For every dollar of goods sold, the owner makes a penny in profit. You need a big volume of business to make any real money.

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