A&P's New Prototype Evolves Fresh-Store Strategy

DAVID ORGEL

Montvale, N.J. — A&P's newest fresh store prototype, introduced late last month in Park Ridge, N.J., has quickly become a template for new strategies in perimeter departments, Center Store and retail decor, according to the chain's executives.

The new unit not only creates a blueprint for later rollouts, it also shows how a relatively small box — about 25,000 square feet of selling space — can be remodeled to incorporate the full range of the chain's latest offerings.

Eric Claus, A&P's president and chief executive officer, told SN the new approach takes the approximately three-year-old concept to the next level. “The store's fresh focus includes new taste profiles in produce and many destination items,” he said. “We have tightened up sets in Center Store to highlight the best of the best, and we added new types of lighting.”

A&P has high hopes for this concept, which showcases 17 in-store specialty food shops and emerges about two years after the company revamped its management team.

“We expect significant double-digit increases in sales compared to before the renovation,” said Paul Wiseman, senior vice president of store operations, during a store tour and interview.

This remodeled store is smaller than the average A&P, so accommodations were needed to produce the maximum amount of selling space.

“We took many of the work areas and moved them into the basement of the store,” said Rebecca Philbert, A&P's senior vice president, merchandising, supply and logistics, who also took part in the store tour.

A&P plans two additional new-format units by the end of this fiscal year. Currently the chain has 75 fresh stores under various banners, many of which are expected to eventually incorporate some of the new elements.

The Park Ridge location, designed by the European firm Interstore Design, evokes a Continental market feeling, with a series of in-store specialty shops selling fresh foods. The look is further underscored by a new color palette and series of icons that denote each department.

This unit's upscale customer base was considered a good match for the merchandising approach, which includes a focus on natural, organic and specialty items.

Produce plays into the latest consumer convenience trends, including grab-and-go salads and cut fruit in smaller portions. “All cut fruit is prepared at store level, so there is more emphasis on training,” Wiseman said.

New flavors of tomatoes and expansive displays for items such as green beans help make produce a signature department, the executives said.

New offerings in bakery also play off smaller portions, such as a display of mini pies (4 ounces) and mini cakes in the display case. Baking is done primarily on-site. Specialty items include ballerina cups, fudge dessert bars and fudge truffles.

The chain's pizza program is a centerpiece of its prepared foods offerings. A&P worked with a supplier to bring in parbaked crust, and all the pizza is made in the store. This method eliminates the need to toss pizzas in the store, but associates still get to provide in-store touches, such as fresh ingredients and toppings. Pies can be purchased out of the oven or in refrigerated form, and pizza is also sold by the slice.

Other destination areas of the store include an expansive cheese section with more than 400 items, a 12-foot wall of domestic and imported pastas along with sauces and oils, seafood and sushi departments, and meat offerings that include organic and natural.

Center Store presented a particular merchandising challenge. A&P wanted to maintain a full shop despite tight space, so it compromised by presenting limited assortments in categories such as laundry detergent, bathroom tissue and frozens. Stockkeeping units in some traditional grocery categories, such as ketchup, were pared to two brands and a private label, Philbert said. This strategy enabled the chain to focus on faster-turning products.

“Once we pared down some conventional items, we were able to increase the assortment of natural, organic, gourmet and ethnic items,” Philbert said.

This store's grocery shelves eschew the practice of grouping products according to specific supplier brands, which had been the inevitable result of supplier-led category management. Instead, the chain's executives said, they have developed more logical, consumer-friendly layouts.

“A&P is the category champion here,” Philbert said. “This is unusual for retail, and it's new for us.”

In another unusual move, the store's pharmacy/HBC section is located through a walkway in what was until recently a separate store.

The Park Ridge unit tries to place an emphasis on sharp pricing, a perception supported by weekly specials, red-tag reductions and private-label items.

“We are more competitively priced now,” Wiseman said. “We are bringing in better products while focusing on our price position. New signage is now streamlined to focus on just the product and price.”