Competitive market
When The Great Atlantic and Pacific Tea Co. announced plans to shutter 25 A&P stores in five states, it was “three strikes and you”™re out” in the game of elimination.
A&P said the roster of affected stores would include underperformers, stores facing real estate and cost issues, and those in close proximity to other A&P stores.
Though exact sites were not disclosed, a union representing grocery workers said an A&P in Yorktown Heights and a Pathmark in Monsey, Rockland County, were slated for closure.
A&P has 28 stores in Westchester. One store is yards away from the Midway Shopping Center in Greenburgh, just off Central Avenue. Come fall, a 60,000-square-foot ShopRite supermarket is scheduled to open in the retail plaza.
“October is what they”™re targeting and I think it”™s going to be great for competition,” said Greenburgh Town Supervisor Paul Feiner. “I think it will result in lower prices. People like the fact that there”™s a choice. It encourages other supermarkets to be cleaner and to offer a better value.”
Feiner called ShopRite an “important anchor” that filled a major vacancy left by Linens ”˜n Things after that retailer filed for bankruptcy two years ago.
Retail analyst Howard Davidowitz touched on Feiner”™s point of “better value” that drives consumer spending.
“A lot of supermarkets are doing terrible,” said the chairman of Manhattan-based national retail consulting and investment banking firm Davidowitz & Associates Inc. “You”™ve got Bashas”™ (grocery stores) in Phoenix (and) Winn-Dixie announced it is closing 30 stores. Customers are seeking cheaper alternatives. They”™re buying food at Wal-Mart. Americans are trading down and many supermarkets have high, high overheads.”
In the first quarter ended June 19, A&P reported a loss from continuing operations of $116 million.
“It”™s a company in crisis that will have to close a lot more stores,” Davidowitz said. “There have been a number of food store bankruptcies. Delivering of quality and value is important. That”™s what Costco, Whole Foods and Fairway does. The quality-value equation is there.”
Specialty and organic grocer Whole Foods has continued its expansion in Westchester and will open a 49,000-square-foot Yonkers store at the Ridge Hill Development “late summer 2011,” according to spokesman Michael Sinatra.
Whole Foods now has one Westchester location in White Plains.
“The store will be similar to both our New York City and suburban locations, offering a variety of natural and organic food with a focus on local offerings,” he said. “As we do with each store we build, we do our best to tailor the design and layout to fit within the community we are coming to.”
Whole Foods”™ earnings for the third quarter of 2010 were strong with sales increasing 15 percent to $2.2 billion. Earnings before interest, taxes, depreciation and amortization increased 27 percent to $179.8 million.
Whole Foods offers fewer, high-quality items or “upscale value,” which Davidowitz said stores like Trader Joe”™s and Costco also provide.
“I bring my kids to Costco and Stew Leonard”™s (in Yonkers) and it”™s fun,” said Tarrytown father Rick Stassa, an executive vice president in the retail division at Yonkers-based commercial brokerage NAI Friedland Realty.
“It”™s an experience. I think you”™re hearing about these stores closing because there”™s nothing really special about going to an A&P.”