From the Publisher: Severing the Link to the Past
With a modern business plan the retailers that replace A&P have the potential to succeed. Enough about A&P already, right? Well, not quite. Not only do we have to pay attention to what caused the apparent demise of what once was the nation’s largest grocery store chain, we have to understand that its failure will create a vacuum in one of the wealthiest areas of the country. Let’s be clear, the Great Atlantic and Pacific Tea Co. was the poster child for failed retailing. Here are some reasons: Bad store locations—Check. Bad merchandising decisions—Check. Bad marketing decisions—Check. Poorly designed stores, not well maintained at times—Check. Other stupid things over the years—Check, check, check. The chain’s defenders point out that A&P’s current management could do little to save a company that has been on a downward spiral for as long as I have been writing about grocery retailing—and I am no spring chicken. Some of what they say may be true, but the fact that A&P failed to keep up with the little marketing ploys that its competition instituted over the years probably was its ultimate death blow and the reason the chain declared bankruptcy for the second time in five years, announcing in July that it was selling off more than 100 stores. Want to be a successful supermarket operator in 2015? You better have a damn good produce, deli, take-home and bakery department. And, it would not hurt to have a pharmacy department to anchor the HBC aisle and the right mix of merchandise in the center store section. Oh yeah, do not forget about the customer service and competitive pricing either. However, A&P is yesterday’s news. As we discuss in this month’s cover story, now we have to look to the future. There are about 25 million people living in the marketing territory covered by A&P stores and it is fair to say that the stores still attracted many customers simply because they shopped solely on convenience or did not care much for those little extras that are transforming the supermarket industry these days. A&P’s demise could be a great opportunity for other retailers to grab some additional market share in this market. Corporate buyers are lining up for these stores and, after the bankruptcy court has its say, a bunch of chains will be operating the former A&P stores and developing them according to their own business strategies. Frankly, it will not be too difficult to do a better job than the previous operator. The bar here is pretty low and all a retailer has to do is fix up the stores a bit, modernize the key departments and update the product selection to win shoppers back. What did the wise George Santayana say about history? “Those who can’t remember the past are condemned to repeat it.” As these chains move forward, their top officials should remember those words.