A&P Reverts to No-Frills with Food Basics
Food Basics opened its third American store two months ago in Brooklyn. The other two are in Paterson and Passaic, N.J. The A&P-owned chain has 80 stores in Ontario.
The stores represent A&P’s bid to return to lower-income, ethnically diverse urban areas after following its Italian, Irish and Jewish customers to the suburbs in the last decade according to a piece in the New York Times. Christian Haub, chairman and chief executive, for the retailer says, “We looked at the population in Queens, Brooklyn and the Bronx and said, ‘We really cannot ignore this market.’ ”
Food Basics stores try to match their merchandise to the ethnic neighborhoods they serve. It offers lower prices by running a smaller store (16,000 square feet, instead of the typical 55,000 for suburban A&P’s), eliminating services (there is no in-house butcher shop, bakery or pharmacy), and limiting brand variety. Shoppers who do not provide their own bags may buy bags for three cents each or pack their purchases in used cardboard cartons.
After a year, A&P will evaluate whether to keep the store and roll out the concept elsewhere and in other boroughs.
Moderator Comment: Is A&P right with its Food Basics format? Are supermarket consumers willing to bag their own groceries, accept smaller product selections and not have a pharmacy in-store? [George Anderson – Moderator]
In hindsight, A&P has tweaked the Food Basics format in New Jersey, New York and PA, and these stores are doing well.
The next generation Food Basics may well be franchises, which are doing great in Canada under both them and now Metro, and they may have a few more surprises up their sleeves.
Remember, their PLUS stores were great and were better than Aldi is now, but after two years, they were closed.
Maybe BulkBasics will appear in the marketplace as well. A&P and its discount foods stores years ago could better market quality merchandise in bulk at warehouse/no membership prices. The footprints don’t have to be mega, but large enough to make it an exciting place to shop.