A&P, a grocer that has been doing business in the U.S. for more than 155 years, may be on the brink of bankruptcy, some are predicting. Last month, attempts to sell the company via auction were not met with any viable offers.
Now, with only 400 locations open throughout the U.S., some expect that the stores will be sold piecemeal and that a bankruptcy filing may come any day. If it does, this would be the second bankruptcy filing for the company within a five-year period.
Despite the speculation, however, A&P has not confirmed its intentions, telling Bloomberg that, “No decision has been made regarding a particular outcome, and it would be inaccurate and irresponsible to suggest otherwise.”
Changing Consumer Needs May Be Central to A&P’s Downfall
While time will tell what A&P’s next move is, one thing seems certain at this point – A&P has not been able to evolve with the changing consumer needs. In fact, when A&P was at its most popular in the U.S. (at which point it reportedly had more than 15,000 locations), consumers would shop at one grocer for all of their needs.
Decades later, however, people are far more apt to shop at various retailers for grocery needs, meaning that, even if they are shopping at A&P stores, they are buying far less than they once did (according to the 2013 American Pantry report). Specifically, researchers have found that the average household shops at a minimum of five stores to fulfill its grocery needs.
Additional factors that some have pointed out as being central to the decline of A&P have included (but are not limited to):
- The increased demand for organic foods
- The increased competition from drug stores and club warehouse stores (where people also commonly shop to fulfill their grocery needs)
- The rise of e-commerce (which some expect to become fierce competition for grocery dollars, particularly with major online retailers – like Amazon – expanding into this realm).
- A growing preference to shop at smaller storefronts.
Have you ever shopped at an A&P? Do you agree that its business model no longer fits consumers’ needs and preferences? What do you think about the speculations that A&P is on the verge of filing for bankruptcy? Share your thoughts, opinions and comments with us on Facebook & Google+.
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