Great Atlantic & Pacific Tea is considering a bankruptcy filing among possible options as the 156-year-old grocer works to cut costs, according to people familiar with the situation.
A filing, which would be the chain’s second in five years, could come as soon as next month, said the people, who asked not to be identified because the discussions aren’t public. Bids for A&P were due last month as part of an auction for the company, but no viable offers for the entire chain were received, the people said. That means the stores could be sold piecemeal, marking the end of what was once the largest U.S. grocer.
The company said in March that it was reviewing strategic alternatives for the business, and that process continues, according to Hugh Burns, a spokesman for Montvale, New Jersey-based A&P at Sard Verbinnen & Co.
“No decision has been made regarding a particular outcome, and it would be inaccurate and irresponsible to suggest otherwise,” he said in an e-mailed statement.
A&P began in 1859 as the Great American Tea Co., a mail- order business for tea and spices. By 1929, it had 15,000 stores and sales of $1 billion. The company helped pioneer the modern supermarket industry, offering more of a no-frills experience than traditional shops. But in recent years it struggled to compete with upstarts like Whole Foods Market Inc. and Trader Joe’s. The company’s stores came to seem dated, and A&P became increasingly saddled with the burden of high pension costs and other labour expenses.
A&P previously sought bankruptcy protection in December 2010. At the time, it had about 400 stores operating under the Waldbaums, SuperFresh and Food Emporium brands, in addition to the A&P chain. The company exited bankruptcy with 320 stores in 2012, re-emerging as a privately held company owned by an investor group that included Ron Burkle’s Yucaipa Cos.
Bloomberg News, edited by ESM
