A&P Turnaround Plan Includes Some Private Label Expansion

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October 26, 2010

Since the end of last quarter, The Great Atlantic & Pacific Tea Company Inc. (A&P) appointed an entirely new senior management team and focused on strengthening its operating and financial foundation.

Enhancing the customer experience and value proposition are two other key elements of the plan currently underway.

“A&P continues to work on many fronts to drive loyalty and engage new customers with the goal of enhancing the value it offers in its stores,” according to a company statement. “The company is focused on refining its product mix, pricing and promotion initiatives, and it continues to improve the way it cares for and serves customers both in stores and through its company-wide customer service operations. A&P is also offering customers additional variety and value by enhancing and expanding its private label brands, including America's Choice, Food Basics and The Food Emporium Trading Company.” No mention, however, was made of newer private label brands such as Via Roma and GreenWay or recently redesigned brands including Hartford Reserve, Preferred Pet, Live Better and Market Spa.

A&P’s same-store sales for the second quarter declined 6.6 percent, while overall sales were $1.9 billion, down from $2.1 billion in the same quarter last year. Reported loss from continuing operations was $143 million, more than twice that of last year's reported loss from continuing operations of $62 million in the same quarter. EBITDA was negative $45 million for the second quarter versus $42 million for the last fiscal year's second quarter.

"Our second quarter financial results are disappointing,” said Sam Martin, president and CEO. “But we have developed a comprehensive turnaround plan and have quickly begun to implement it…With our talented and deeply experienced new [management] team now in place, we have begun to execute against the other steps in the plan on an accelerated basis."

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