« October 2007 Table of Contents Pin It

Case Study: Retail revamp for A&P fish

Perishables-focused formats expanding seafood, adding service

 - Photo courtesy of The Great Atlantic & Pacific Tea
    Co.
By Lisa Duchene
October 01, 2007

When Joe D'Alessandro went to work for The Great Atlantic & Pacific Tea Co. about 15 months ago, he got right down to business overhauling the chain's seafood departments. Since then, the company has audited every seafood product it sells, changed many suppliers and product specifications, revamped its shrimp program and upgraded the seafood departments in about 80 of its more than 300 grocery stores.

"We want to re-establish ourselves as the place to buy seafood in our market areas," says D'Alessandro. "Upscale grocers, as they move into the trading area, make you better. You want to be as good as them or better."

D'Alessandro came to A&P from Pathmark Stores, which operates 141 stores in four Mid-Atlantic states. He is a former seafood director for Kings, an upscale chain of 26 supermarkets primarily in New Jersey.

A&P has been busy shedding divisions in order to concentrate its grocery business in the Northeast. The company closed its Farmer Jack division in the Midwest, which involved selling 43 of 66 stores and is negotiating to sell the remaining 23. A&P's merger with Pathmark is awaiting Federal Trade Commission approval. A&P also announced it will exit the Louisiana market and is negotiating the sale of its Sav-A-Center division there.

In the Northeast, A&P operates about 300 grocery stores under five banners: Food Emporium (16 gourmet stores in Manhattan), Food Basics (11 discount stores), A&P (121), Waldbaum's (70) and Super Fresh (80).

Like many traditional grocers in the last few years, A&P, headquartered in Montvale, N.J., found itself squeezed by competition from Wal-Mart and club stores on the low end of the price scale and by specialty stores like Whole Foods Market on the high end.

To improve its business, A&P has been working on upgrading its perishables. In late 2005, A&P began renovating and upgrading its conventional grocery stores to a perishables-focused, "Fresh" format, in which it adds the word "fresh" behind every banner except Super Fresh. There are now 80 fresh-format stores across all the banners.

D'Alessandro initiated product-quality changes throughout the chain. The 80 fresh-format stores have expanded with more upscale seafood-product assortments and larger, renovated seafood departments. In many stores, a four-foot self-serve seafood section became a 16- or 20-foot service section after renovation. As a result, seafood sales and profits are consistently increasing, he says.

The company has done a nice job with its fresh-format stores, says Neil Stern, a consultant with McMillan Doolittle, a retail-consulting firm in Chicago. "The issue for A&P is that while they're in the process of doing that, so is everyone else in the market," Stern says. "Shop Rite's perishables have improved and new players like Wegmans and Whole Foods have come into the Northeast and raised the bar."

Shrimp and fresh fish were the first to receive D'Alessandro's attention. When A&P's shrimp performed dismally on quality-assurance tests, D'Alessandro immediately changed suppliers and shrimp specifications. The new specs for shrimp sold as A&P's Master's Choice private label calls for no black spots, no throat meat and a light soak only, meaning no more than 30 minutes in tri-polyphosphate. Shrimp sales are trending upward, says D'Alessandro.

The company also changed the vendor and method of supplying its store with refreshed fillets. A New Bedford, Mass., supplier receives whole, frozen fish and slowly thaws them overnight in a defrosting chamber, then the next day processes the whole fish into fillets and ships them to the stores, says D'Alessandro. Every store carries salmon, flounder, tilapia, cod and catfish. Stores with higher volumes sell a greater variety.

In the fresh-format stores and some of the conventional supermarkets, D'Alessandro has added upscale items like all-natural, organically fed Scottish salmon, dry sea scallops, Arctic char, wild Alaska salmon, sushi-grade yellowfin tuna, sushi-grade swordfish and cooked and raw organic shrimp.

Auditing and keeping a close watch on suppliers has been a challenge, says D'Alessandro. But giving seafood that level of attention is important to the final quality of the product.

"We knew we wanted our customers to see a distinct difference in what A&P was evolving into and we wanted them to go into the store and see good, high-quality seafood because we know that good, high-quality seafood is the way to build a business," he says.

D'Alessandro is careful to remember value. He tries never to break a $20 per-pound price point and to deliver the best possible quality for the price, even at lower price points. He intends for the prices on even upscale items to be less expensive than competitors'.

"We want the customer to see a value in what they buy," he says.

In the value-added arena, A&P has added seasonal value-added items like ready-to-cook kebobs, salads and stuffed items. This winter, it will sell stuffed salmon and halibut roasts that can be sold whole or cut into pinwheels. The company is adding smoked king, sockeye and coho salmon to its Master's Choice private label.

"We've sat down with every one of our sushi suppliers, asked them to come to the table and upgrade their programs," says D'Alessandro of the in-store sushi shops. "Our sushi sales are really flying because we introduced bento boxes, and also offer organic brown rice and vegetarian rolls and vegetarian salads."

D'Alessandro has even become the company's seafood spokesman, appearing in flyers and recipe cards as "Seafood Joe." Eager to get consumers' attention and show off the new seafood assortment, the company has promoted seafood with Road Shows and truckload sales for most of the year. The road show is a storewide event promoting a single seafood item like "colossal king crab" from a Friday to Sunday with banners, announcements and newspaper advertising. For a truckload sale, the store sets up a tractor-trailer container in the parking lot and sells frozen seafood, like 4-pound bags of tilapia, out of the truck.

"We're using these right now to create excitement, have some fun and tell people that we're the authority in seafood," says D'Alessandro.

 

Contributing Editor Lisa Duchene lives in Bellefonte, Pa.

 

Featured Supplier

Company Category