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Sam Martin, CEO of The Great Atlantic & Pacific Tea Company, photographed at the A&P. (Photo by Anne-Marie Caruso)
Posted: Thursday September 20, 2012, 11:20 AM
By Brooke Perry

When Sam Martin joined The Great Atlantic & Pacific Tea Company as president and CEO in July 2010, he knew a dramatic overhaul of the 152-year-old company, one of the country's first supermarket chains, was on the horizon.

"I didn't know we'd be filing for bankruptcy, but I did know that the company was struggling and in need of a turnaround," he recalls.

Citing the economic downturn and a shift in consumer spending to wholesale clubs and drug stores, the Montvale-based retail grocer, then operating more than 400 stores in six states, filed for Chapter 11 bankruptcy protection in December 2010, just six months after Martin took the helm. Remarkably, though, Martin was already at work, implementing a series of swift and strategic moves that would put the company back in the black in just 15 months.

"We had a strategy in place even before the filing," he recalls, ticking off a five-point plan that included installing a new management team, creating a financial environment that would support the company's operation and refinancing, reducing the company's structural and operating costs, and improving both the value proposition for customers and their in-store experience.  

"Availing ourselves of Chapter 11 allowed us to take the steps necessary to fully implement a comprehensive financial and operational restructuring," says Martin, recalling the move as "difficult but necessary." The filing allowed A&P to reject leases it no longer needed, renegotiate union agreements, and hammer out more favorable contractual agreements with its suppliers, all of which "helped accelerate our turnaround," he recalls.  

In March 2012, A&P emerged from bankruptcy as a private entity, winning court approval for a plan to restructure with $490 million in debt and equity financing from private investors comprising The Yucaipa Companies LLC, Mount Kellett Capital Management LP and investment funds managed by Goldman Sachs Asset Management LP. During the bankruptcy, A&P closed nearly 50 underperforming stores in a series of moves that strengthened its bottom line and laid the groundwork for a leaner, more nimble company.

Today, Martin is focused on unifying the culture of the company.

"Our vision is not to build out one brand but to operate the best store in the neighborhood, whether it's a Pathmark in Bergenfield or The Food Emporium on the Upper East Side," he says.

Currently, the company operates 320 stores in six Mid-Atlantic states under the trade names A&P, Best Cellars, Food Basics, The Food Emporium, Pathmark, Superfresh and Waldbaum's. The company is in the process of remodeling as many stores as possible over the next five years, noting that "the average age of our stores is 15 years and some are older than that."

But Martin's vision for A&P is as much physical as philosophical.

"The idea is to be the best store in the neighborhood and we will do this by becoming more relevant to customers in each specific neighborhood," he says.

When revamping the Pathmark store in Bergenfield, for example, the company catered to the area's Jewish population by hiring a certified Mashgiach to supervise production of all things kosher and tripling the number of fresh, high-quality kosher products.

Similarly, influenced by Weehawken's local Hispanic culture, the 55,000-square-foot Pathmark now features 1,400 new products from Mexico, Central and South America and a majority of bilingual associates.

"These stores and others illustrate our steadfast commitment to serving our customers through a neighborhood store that continually offers shoppers products that match their needs and cultural preferences," he explains.

Ahead of the Competition

Staying ahead of the competition is part of Martin's strategy.  

"There will always be competition," he reasons. "For us, it's not about creating a theatrical experience. It's about staying connected to our customers and their needs. It's important to be aware of your competitors without being distracted by them."

Beyond the stores' atmosphere and aesthetic appeal, A&P has introduced new programs and product lines that underscore its more customer-focused philosophy.

"When our customers told us they wanted higher quality beef, we sourced a steakhouse-quality supplier to create Woodson & James, a signature line of premium Angus beef that is crafted to our own specific set of standards and specifications," says Martin. Likewise, A&P has recently introduced Mid-Atlantic Country Farms, a line of local chicken, turkey and beef raised by family-owned farms that are committed to humane and sustainable farming methods, and Two Forks Bakery, a line of desserts and bakery treats, including gluten-free flourless chocolate cake.

It's all part of Martin's quest to meet the evolving needs of today's shopper and nowhere is his passion more evident than with Live Better Wellness, a new health and wellness campaign designed to help shoppers make healthier choices. The multi-part program includes more locally grown products, prepared foods using fresh ingredients, and in-store signage on thousands of products that identify their health attributes.

Martin is so confident of A&P's improved prospects that he's playing a starring role in an advertising campaign aimed at encouraging customers to "discover a more enjoyable and rewarding shopping experience." The first-ever A&P campaign across all of its brands, it proclaims "shopping just got a whole lot better" and Martin hopes the message is clear: "If you haven't been here in awhile, come back and check us out. Welcome back to a better way to shop."

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