Montvale, NJ - A&P, an operator of regional supermarket chains, will close underperforming stores in the United States and Canada, sell some others and open 175 to 200 new “superstores” as part of a plan to improve profits.
The company, formally known as The Great Atlantic & Pacific Tea Co., said that it will close or sell 127 of its 907 stores. The company plans to close the stores over the next year and open the new ones in the coming three years.
About one-third of the new stores will replace existing ones, so the Montvale-based supermarket company expects to wind up with fewer stores than its current total of 907, but 6 million more square feet of space, said Andy Carrano, vice president of marketing.
A&P operates in 18 U.S. states, the District of Columbia, and Ontario, Canada. The company's stores operate under the names A&P, Waldbaum's, Food Emporium, Super Foodmart, Super Fresh, Farmer Jack, Kohl's, Sav-A-Center, Dominion, and Food Basics.
The company said it expects to sell 31 stores it operates in the Richmond, Va., region under the Farmer Jack banner.
A&P said it will record about $22 million, or 57 cents per share, in third- quarter after-tax expenses to pay for the closings and other initiatives. It estimated the closings will eventually generate $50 million to $80 million from asset sales and by freeing up expenses.
The company could not immediately say how many people work at the 127 stores. Not all will lose their jobs. Some may be offered transfers to nearby A&P properties, and others work in stores slated to be sold rather than closed, Carrano said.
Carrano said the new stores would be concentrated around metropolitan New York, Detroit and Ontario, Canada.
Results for the company's third quarter, which ended Dec. 5, will include after-tax charges of about $22 million, or 57 cents per share, relating to the closings and other initiatives. Third-quarter results are to be announced in a couple of weeks.
A&P, today, is a far cry from its historic peak. In the 1920s and 1930s, the company operated more than 15,000 groceries, but it went into a long decline due to competition from newer, larger stores.
In the 1980s it began buying regional chains and has lately been closing and remodeling older, smaller stores and opening larger ones.
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