REPORT: FARMER JACK EYES EDLP

Mark Hamstra

DETROIT -- A&P's Farmer Jack division here is planning to convert its stores to an everyday low price, or EDLP, format, according to a local press report last week.

A spokeswoman for Farmer Jack said the company "had some great things in the works," but would neither confirm nor deny a Detroit Free Press article stating that the chain planned to close all of its stores for one day this week and reopen them with a new format offering 30-day specials instead of weekly deals obtained through the chain's frequent-shopper card program.

The spokeswoman said Farmer Jack had no plans to close any stores permanently or to sell the chain, but she declined further comment. A&P, Montvale, N.J., could not be reached for comment.

Earlier this year, Farmer Jack said it would shutter four stores and eliminate 400 positions.

"They've been hurt by Meijer, which is more EDLP," said Meredith Adler, analyst, Lehman Bros., New York.

Adler said she was not aware of any specific plans for Farmer Jack, but she said other supermarket companies have had difficulties converting to an EDLP format.

"It's tough to make the switch," she said. "Customers get used to high-low, and they don't like to see it go to EDLP."

Bob Potter, president, United Food and Commercial Workers Local 951, Grand Rapids, Mich., which represents Farmer Jack workers at two Michigan stores, described Farmer Jack's strategy as "a fairly aggressive business plan to assert themselves in the market," although he declined to discuss the chain's plans in detail.

"I think it's good that they're doing this," he added.

Asked if the stores would be converted to something akin to Food Basics, A&P's no-frills Canadian concept, Potter said he "doesn't see that happening."