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MONTVALE, N.J. - The Great Atlantic & Pacific Tea Co. has partnered exclusively with Irish online retailer Buy4Now to offer an e-grocery program in some A&P-affiliated stores, according to Buy4Now.
Buy4Now will initially supply software and specialist consultancy services for two of A&P's 11 retail banners, the Irish firm said. The first A&P chain to launch an e-grocery offering will be Food Emporium in New York.
The e-tailer will provide the Food Emporium with the same software package used by another Buy4Now client, Irish grocer Superquinn, which is widely admired in the supermarket industry for its excellent customer service.
A&P officials would not comment on the deal.
New York-based industry expert Burt Flickinger suggested to Progressive Grocer that the biggest reason for A&P's new foray into e-retailing is because the company is so far behind in the channel and eager to catch up. FreshDirect, Peapod, and other online grocers have been steadily stealing sales from Food Emporium, once A&P's most profitable division, he said.
"A&P is last to the party and picking up the crumbs," Flickinger said, adding that the choice of a foreign e-tail partner might be because A&P "failed to find a partner in the U.S."
Flickinger added A&P would do better to concentrate on its struggling banners, notably Detroit-based Farmer Jack and Super Fresh in Southern New Jersey, Pennsylvania, Delaware, Maryland, and the District of Columbia, rather than branching out into "small, less significant stuff."
Whether food e-tailing is worth pursuing can be debated, however. The online grocery business is projected to generate $6.5 billion in sales, or 1 percent of the total U.S. market, by 2008, making it a rapidly growing profit source for conventional grocers to tap into, according to Patti Freeman Evans, a retail e-commerce analyst at New York's Jupiter Research.
"Consumers are getting used to a multichannel environment," Evans told Progressive Grocer. "That's the way we do retail today." Those companies that want this business but don't have the requisite experience are better off getting someone who has it, she noted, as A&P is doing by partnering with Buy4Now. Such a partnership presents "an opportunity to get more share of wallet," Evans noted.
A&P operates 628 supermarkets in the United States and Canada.