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The Great Atlantic & Pacific Tea Co. last week posted second-quarter financial results that its new leader admitted were “disappointing,” but was committed to forging ahead with a comprehensive turnaround strategy that has so far seen the hiring of a new executive team and the rollout of additional phases.
Second-quarter sales were $1.9 billion, vs. $2.1 billion in the year-ago period, while comparable-store sales fell 6.6 percent. Reported loss from continuing operations was $143 million, compared with last year’s loss of $62 million.
But despite the currently overcast financial outlook, all isn’t gloom and doom at the venerable grocer. According to president and CEO Sam Martin, who took the A&P helm in late July following stints at such retailers as OfficeMax, Wild Oats and Fed Meyer: “[W]e have developed a comprehensive turnaround plan and have quickly begun to implement it. The first step in that plan is the formation of a new management team. With our talented and deeply experienced new team now in place, we have begun to execute against the other steps in the plan on an accelerated basis.” New hires include chief administrative officer Jake Brace, EVP of merchandising and marketing Tom O’Boyle, and EVP of operations Paul Hertz.
Other key building blocks of the plan are bolstering the grocer’s liquidity, in support of which A&P is negotiating an agreement with its existing banks and several new lenders, and selling seven Connecticut stores to Big Y; lowering structural and operating costs through such methods as working with key operating partners, rationalizing its store footprint by closing 25 underperforming stores so far, eliminating overhead costs and reducing headcount in its organization; enhancing the value proposition for customers by refining its product mix and expanding private label offerings; and improving the shopping experience via training initiative, identification of target customer segments and clusters from data analysis of loyalty card shoppers, and individualized offers.
“Although we clearly have a lot of work ahead of us, we have already made solid initial progress,” Martin emphasized.
A major voice in support of the ambitious plan came from A&P executive chairman Christian Haub, who noted, “The board and the company’s major shareholders, Tengelmann and Yucaipa, have full confidence that this team will continue to make significant, incremental progress in executing our turnaround plan for the benefit of all our stakeholders.”
Montvale, N.J.-based A&P operates 428 stores in eight states and the District of Columbia under the following banners: A&P, Waldbaum's, Pathmark, Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics.