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NEW YORK -- Christian Haub, executive chairman of Great Atlantic & Pacific Tea Co., based here, reiterated his company's desire to participate in consolidation in its core Northeastern market during a presentation at a Bear Stearns conference here. Speaking about the "pretty significant synergy opportunities between certain combinations" that currently exist in that market, Haub noted that the company was "ready to pursue [those] opportunities as they come."
Haub had earlier spoken of the Montvale, N.J.-based readiness to consolidate, at the CIBC World Markets Annual Retail Conference in Toronto.
Haub also mentioned at the Bear Stearns presentation that A&P would open its first "next-generation" Food Basics store in April, but offered no further details.
The Food Basics discount format is one of three new concepts that the grocer is currently rolling out. The other two are a perishables-heavy fresh format, and an upscale gourmet format built around A&P's Food Emporium banner. Recent local press coverage of the Midland Park, N.J. prototype fresh store was "positively received within the organization," Haub said. The company has said its goal is to upgrade 70 percent of its stores to one of the three formats.
At the Bear Stearns event, Haub noted that the grocer's relationship with Metro, the Quebec-based grocer that bought A&P Canada last year and in which A&P holds a 16 percent equity ownership, would present "joint future opportunities...that will benefit both organizations...on a more North America-wide scale."
He additionally said, in answer to an audience member's question, that A&P was de-emphasizing its existing banners, but would not get rid of them, as that would be an "unnecessary expense." Instead, he noted that the business was now organized around the formats, rather than the banners.
While declining to speculate on how consolidation in the Northeast would ultimately shake out, Haub noted the ineffectiveness of the market, with none of its various players unable to gain a clear lead, and that research had identified synergy opportunities in excess of $100 million. He also noted that A&P would make sure it had the necessary resources to invest in a workable consolidation strategy.