A&P SAID TO BE MULLING SALE OF 88 UNITS

ELLIOT ZWIEBACH

MONTVALE, N.J. -- A&P here declined comment last week on persistent reports that it is interested in selling some or all of the 88 stores it operates in Virginia and the Carolinas. However, a variety of observers told SN the chain had been unsuccessful during 1995 in finding a single buyer for the stores, although several companies had expressed an interest in selected units. Debra Levin, an analyst with Morgan Stanley, New York, told SN A&P has given up on selling the 88 stores as a group and may instead be interested in disposing of the stores individually. "The stores in the Carolinas and Virginia are still disappointing and could be candidates for divestiture, most likely in a piecemeal fashion, as management indicated it has not been able to find a buyer for the full group," Levin said. While declining to comment on whether the stores were ever for sale, an A&P spokesman told SN the company has not made a major investment in most of the 88 stores for several years "because it has been a low-key area for us." The 88 stores make up A&P's South-Central division, created last year from part of the Atlanta division and also part of the former Richmond division after A&P sold its Richmond stores a year ago. One analyst in the Southeast said a retailer who expressed interest in a few of the stores last year was told the chain was interested in selling the stores only as a group at that time. Another local observer also told SN that A&P had been seeking a single buyer for the entire group of stores, although he said most potential buyers were interested only in selected units. "Some of those stores are so small that I'm not sure how A&P can operate them, and they would make much more sense being operated by independent retailers," he said. Another area analyst said that, with Hannaford Bros.' acquisition of and expansion plans for Wilson's Supermarkets, Wilmington, N.C., "it's clear there's got to be some fallout in the market. "Although most people said Hannaford would operate more upscale stores, the Wilson's are actually competing at the same level as Winn-Dixie, Food Lion and [A&P's] Super Fresh, and the most likely dropouts have always appeared to be either Winn-Dixie or A&P, so it makes sense for A&P to seek buyers for its stores in that area."