Despite Q2 losses, A&P moves ahead with turnaround plan
MONTVALE, N.J. With its new management team in place, grocer A&P is moving ahead with its turnaround plan amid a 6.6% drop in same-store sales and a wider net loss for the second quarter.
“Our second-quarter financial results are disappointing. But, we have developed a comprehensive turnaround plan and have quickly begun to implement it. The first step in that plan is the formation of the new management team,” stated Sam Martin, president and CEO, who joined the company in late July. “With out talented and deeply experienced new team now in place, we have begun to executive against the other steps in the plan on an accelerated basis.”
Sales for the second quarter were $1.9 billion versus $2.1 billion in the year-ago period. Net loss for the quarter totaled $153.7 million compared with a loss of $80.3 million in the year-ago period.
As previously reported, the company has made, since the end of the last quarter, a series of executive appointments to round out the new leadership team under Martin. In addition, the company continues to take steps to strengthen liquidity, reduce structural and operational costs, improve the customer value proposition, and enhance the in-store experience.
For example, A&P has, in an effort to bolster liquidity and shed noncore assets, contracted the sale of seven stores in Connecticut. The deal is expected to close Nov. 1. A&P still is pursuing additional financing initiatives, including sale-leaseback transactions and sales of additional noncore and/or nonperforming assets.
The company also has shuttered 25 underperforming stores and is in discussions with several operating partners to find ways to trim its structural operating costs. It also reduced headcount, saving roughly $10 million annually.
Meanwhile, in the stores, the grocer is expanding its private-label brands, including America’s Choice, Food Basics and The Food Emporium Trading Co.
It also is analyzing loyalty card data to identify target consumer segments and clusters to ensure it is offering the most relevant assortment and value to shoppers.
“The board and I are encouraged by the initial actions taken by Sam and his new executive team to strengthen A&P’s operating foundation,” stated Christian Haub, executive chairman. “The board and the company’s major shareholders, Tengelmann and Yucaipa, have full confidence that this team will continue to make significant, incremental progress in executing our turnaround plan for the benefit of all our stakeholders.”
Combining Invirase, Norvir could cause health problems
SILVER SPRING, Md. Combining two antiviral drugs for HIV may raise the risks of life-threatening heart problems, the Food and Drug Administration warned Thursday.
The agency said it would require changes to the safety labeling for Genentech’s drug Invirase (saquinavir) following reports that combining it with Abbott’s Norvir (ritonavir) could lead to prolongation of the QT and PR heartbeat intervals. Prolongation of the QT interval could lead to an abnormal heart rhythm condition called torsades de pointes, which can lead to the potentially fatal condition called ventricular fibrillation.
“Patients should talk to their doctor if they have any concerns about their treatment,” FDA Office of Antimicrobial Products director Edward Cox said. “Certain drugs may interact with Invirase and increase the risk of developing these side effects, so patients should be sure to tell their doctor about other medicines they may be taking, including nonprescription medicines, vitamins and herbal supplements.”
Fresh & Easy gives away more than 200,000 reusable bags in September
EL SEGUNDO, Calif. Regional supermarket chain Fresh & Easy said its promotion of reusable canvas bags has been successful, with more than 200,000 bags given away in September.
Coupons for the free canvas bag were available to customers on mailers and flyers, as well as through the company’s Facebook fan page, Fresh & Easy said. Since opening its first store in November 2007, Fresh & Easy has given away more than 800,000 reusable bags at store openings, events and through giveaways. This past summer, the supermarket chain hosted a bag design contest.
“We are trying to remove barriers for customers so they use and reuse their reusable bags,” said Roberto Munoz, Fresh & Easy neighborhood affairs director. “We’re happy to see customers got excited about the promotion –– we want to engage our customers in making greener choices. We will continue to do these types of giveaways and promotions in the future to help encourage our customers to use reusable bags.”