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One year later, A&P sites still reopening

Uncle Giuseppe's, Key Food, Food Bazaar, 99 Ranch debuting recycled N.J. sites

Nearly a year after A&P shut down and sold its stores in a bankruptcy auction, acquirers are still reopening sites with an eye on reintroducing competition in weary Northeast markets.

Queens, N.Y.-based Food Bazaar this week has reopened a former Pathmark in Fairview, N.J. as well as a former Food Basics site in North Bergen, N.J. Next week, the Long Island, N.Y.-based Uncle Giuseppe's Marketplace will hold grand opening ceremonies in a former Pathmark in Ramsey, N.J. Asian specialty store 99 Ranch Market is now hiring for a store at a former Pathmark site expected to open shortly in Edison, N.J. And late last month, a Key Food Stores Cooperative owner reopened at the site of a former Pathmark in Irvington, N.J., using a banner also acquired from A&P during its unraveling last year, SuperFresh.

These stores join the dozens of former A&P-owned sites already reopened since the Montvale, N.J.-based retailer imploded in bankruptcy a year ago.

Industry observers say the newest entrants will face a fight from established competitors looking to preserve the sales they won since their neighbors went dark last Thanksgiving, but maintained that the continued interest in A&P's former fiefdom further illustrates that it was mismanagement, and not overcapacity, that darkened the stores in the first place — and that despite overstoring conditions in some fast-growing parts of the country, the densely populated and mature Northeast has generally been able to re-absorb much of its lost supermarket space.

"In my view the private equity firms that owned A&P did not do a sufficient job managing the company, nor did the restructuring professionals who sold the stores," Burt P. Flickinger III, managing director of Strategic Resource Group, told SN Tuesday. "That so many of these stores are reopening indicates that A&P could have and should have survived. A highly capable, well-capitalized company with good leadership, like Stew Leonard's or ShopRite can make these sites work."

"When it comes down to it, a good location is a good location," another local market observer, who asked not to be identified, said. "And a good location will still be a good location, even if its closed for a year."

Flickinger estimates that new operators at closed stores will be challenged to win back at least 40% of the former shoppers whose patterns changed with the closures. In the Northern New Jersey market where former A&P-owned stores are reopening now, many will have to win them from ShopRite, which largely eschewed the opportunity to acquire closing A&P stores except in markets like Long Island, N.Y. where its share was weaker.

"Generally," one source said, "the larger the local market share one has the more it was able to benefit from the closures. ShopRite gained a lot of business without having to buy stores."

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