MONTVALE, N.J. — A&P's decision to pull out of Maryland last week may create opportunity for discounters there.
In a move that came as little surprise to industry observers, A&P last week said it would look to sell 25 SuperFresh stores in Maryland; Washington, D.C.; and Delaware as part of its turnaround plan under Chapter 11 bankruptcy. The company said it hoped to complete the sales within the next two months, pending court approvals.
“As part of our ongoing review of our store footprint, we determined that these 25 SuperFresh locations are outside A&P's core market,” Sam Martin, chief executive officer of A&P, said in a statement. “While the decision to put these non-core stores up for sale will unfortunately impact some of our customers, partners, communities and associates, this is a necessary step in our efforts to restore the company to long-term financial health.”
Burt P. Flickinger III, managing partner for Strategic Resource Group, New York, last week described SuperFresh stores in Maryland as being in “secular decline,” citing eroding market share amid newer competitors, and in many cases secondary locations. He said Wakefern Food Corp., the Keasbey, N.J.-based ShopRite cooperative, would likely be interested in the stores as a means to expand its PriceRite discount banner. Wakefern has also been expanding in Maryland with its conventional ShopRite banner.
Delhaize, Flickinger added, would also be a likely candidate to buy stores, as that company looks to expand its Bottom Dollar discount chain and better utilize a Gettysburg, Pa.-based warehouse that is currently under capacity, he said.
Wakefern and Delhaize declined to comment specifically on their interest in the SuperFresh stores.
“SuperFresh stores in Baltimore tend to be old and tired, and even those that have had cap-ex [investment] have lost so many customers they couldn't recapture them,” Flickinger told SN. “The stores for the most part had good leases at low rates, but they are not the kinds of sites a shopper would go to do their primary shopping. They could be the kind of the sites someone would go to for a high-volume PriceRite or Bottom Dollar.”
The stores for sale include 22 in Maryland, two in Delaware and one in Washington, D.C. The group includes an 11,000-square-foot unit in downtown Baltimore which opened in 2007 and represented the banner's last significant move in the market. SuperFresh stores on the Delaware and Maryland shore would remain with the company, as would its SuperFresh stores in Pennsylvania and New Jersey, the company said.
The store sales would be in addition to the 32 stores that A&P closed last month — which included eight locations operating under the SuperFresh banner. The banner had been struggling in the Baltimore region for some time, holding a 5% market share in Baltimore and less than a 1% share of the Washington, D.C., market, according to Metro Market Studies. The banner has also shrunk in the Philadelphia region as a result of conversions to the Pathmark banner and four store closures announced in 2009.
Separately, A&P and Stop & Shop said they had agreed to a settlement in the dispute over Stop & Shop's hiring of former A&P executive Frank Vitale. A&P had sought to prevent Vitale — a former vice president of operations — from taking a similar role at Stop & Shop. Terms of the settlement were not were not disclosed.