Sunday, December 12, 2010
A&P, Grocery Store Owner, Files for Bankruptcy as Competition Rises
As another sign of the times, the operator of nearly 400 supermarkets and other stores has filed for bankruptcy. A&P, whose history dates back to its founding 101 years ago, cited competition and the increased consumer share of sales in megastores as the reason to end its billion-dollar business. As a company that primarily owns smaller retail stores and supermarkets, the demise of A&P is indicative of a greater trend for consumers that are mainly shopping in larger stores rather than "mom and pop" businesses. Consumers, including myself, seem to be satisfied with the decision to shop in stores that offer a variety of different goods and services instead of shopping in specialized stores.
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Bankruptcy has a very devastating effect on credit history for at least next 7 years. With such a poor credit score it becomes very difficult to get a loan or mortgage to start a fresh life.
ReplyDeleteThis in part because the specialized stores can't compete with the low prices of the supermarkets. They don't have as big inventories and therefore, they pay more for their products than a store like walmart or Stop and Shop does. During the recession people focus more on price because the value of the dollar has a greater emphasis in the tough times.
ReplyDeleteIt's sort of sad to see chains like this fold. Although they can't compete with the prices ov chains like Wal-Mart, they still have services to offer and keep a more competitive market. But with things as they are, almost nothing means anything to anyone except price.
ReplyDeleteA&P's excuse is complete nonsense. The reason they are failing isn't due to competition, it's because they are in the real estate business, not the grocery business. They became focused on operating stores with cheap, long leases, monopolizing towns, selling shelf space to vendors and bulk buying. Customers know when they, too are a commodity and resent being treated like that, and so patronize Whole Foods, Trader Joe's, Stew Leonard's, Fairway and other retailers that are there to create good experiences for customers. If A&P had listened to their customers, trained their employees and had a competitive ear to the ground they'd still be in the grocery business.
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