Some Retailers Will Die This Year

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In the not so distant past the Great Atlantic & Pacific, the A&P, dominated retailing in the U.S. the way Walmart wished it did. A&P once had more than 13,000 stores; it set prices in the market and enforced them. God help any competitor who ran afoul of Great A&P. Now, a little divine intervention might be useful for the 21st century version of A&P. The company runs 429 stores in 8 states, but just announced its umpteenth restructuring, which will pare a further 25 stores in five states.

A&P isn’t alone in its market misery. Stingy consumers are forcing grocers to flog each other over every dollar of sales. There is no growth to be had. There will be casualties.

Winn Dixie stores, once a major player in the southeast, has also announced a restructuring and BI-LO, another southeasterner recently released from bankruptcy, is for sale, according to Reuters. You can’t necessarily blame all of A&P’s problems on Walmart. The world’s largest retailer isn’t exactly lighting up the sales terminals either, these days. And in New York City, where A&P has had a strong presence for more than a century, there are no Walmarts.

But there is plenty of competition everywhere, and the traditional chains, including Safeway, another old powerhouse, continue to struggle. They’re neither as cut throat on pricing as the low-end stores nor as good on merchandising or specialty foods as the fancier outfits. Winn Dixie, about as traditional a grocer as you can find, has never found a way to best Publix, its Florida rival. And Walmart has pounded away on the price front, snatching some of Winn Dixie’s traditional blue collar shoppers. A&P has tried just about everything: going upmarket, going downmarket, and buying competitors such as Pathmark. That has left it with an inconsistent operating style but some great store locations—which may be about the best thing the company has to sell these days.