A&P says their effort to introduce everyday low prices at its A&P, Super Fresh and Waldbaums stores didn't resonate with consumers and hurt profits. Therefore, the "Lower Price Project" launched in March 2010 that replaced discounts and coupons by establishing lower everyday prices on 10,000 items, has been scrapped.
A&P has been operating under Chapter 11 bankruptcy protection since December, and earlier this week they asked the bankruptcy court for a second extension of its deadline to submit a reorganization plan to its creditors. The first extension has a December 31 deadline, but the company would like until January 16, 2012 to submit their plan, saying the additional 16 days would assure stability through the holiday season.
In order to increase profitability, A&P is counting on new supply and labor agreements made during their bankruptcy period, but positive results "are taking longer to realize than originally anticipated," according to a company filing. The filing also notes that A&P's turnaround strategy has had a negative impact on their profitability and cash flow from operations.
In the company's first quarter, which ended June 18, 32 store were closed in the fresh and Pathmark divisions, while 25 Super Fresh stores in Maryland and Washington D.C. were closed or sold.
See the Supermarket News story.