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A&P Banking on New Look for Fresh Market Stores

Posted on: Friday, 15 July 2005, 00:00 CDT

Jul. 15--WOODCLIFF LAKE -- A Midland Park A&P will be the first of a new generation of Fresh Market stores, the concept on which the Montvale-based supermarket chain is staking its future.

In an interview following the company's annual meeting at the Woodcliff Lake Hilton on Thursday, A&P Chairman and Chief Executive Christian Haub said that the Midland Park store has been targeted as the first of a second generation of A&P Fresh Market stores.

The stores -- which feature fresh and organic foods, and expanded customer service departments -- have produced "a significant shift to higher [profit] margins" and greater market share, Haub said.

The concept was introduced last fall in Denville and Mount Kisco, N.Y. The Midland Park store will combined the best elements of those with some new wrinkles, said Stephen Slade, A&P's executive vice president of operations.

Among ideas under consideration are a Starbucks coffee kiosk within the store, expanded offerings of complete meals, and dining tables.

The location near the Ridgewood border, along with an expanded offering of organic foods, will put A&P in direct competition with a nearby Whole Foods store, Slade said.

"We think we'll clean up there," he said.

A&P expects to submit plans to the Midland Park building department shortly, and work could begin within six to eight weeks, Slade said. The job will take several months, and the store will remain open during renovations.

The makeover of the stores is part of a strategic overhaul of the company, with an ultimate goal to attain "sustainable profitability," Haub told stockholders at the first annual meeting held in New Jersey since 1999.

A&P, which has posted deficits in each of its last seven financial quarters, is scheduled to announced earnings from the first fiscal quarter of 2005 next Friday.

Despite the losses, announcement of the restructuring, plus an upgrade in its bond rating, has helped A&P stock increase more than fivefold since October. It dropped 27 cents a share Thursday to $29.69 after hitting its highest level in almost five years on Wednesday. Still, it remains less than half its price of $61.38 in 1990.

A&P, which once operated 15,900 stores from coast to coast, is selling off its Midwest and Canadian operation to concentrate on about 325 stores stretching from Hartford, Conn., to Washington, D.C.

Most of the stores will be converted to A&P's Fresh Markets concept while retaining their current names, including A&P, Waldbaum's and Food Emporium in the metro area and SuperFresh in the Mid-Atlantic region. The remaining stores will be converted to limited-choice discount operations under the Food Basics name. The concept was imported from A&P's Canadian operations in 2001, with the opening of a store in Passaic.

About 40 stores operate as Fresh Markets and 13 under the Food Basics banner.

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Source: The Record - Hackensack, New Jersey

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