Q&A: A&P Chairman Haub Backs Better Food's Advantages in Recession, Pt. 1

Last Updated Jun 23, 2009 10:32 AM EDT

Not long before the recession's start, A&P launched a strategy of significantly enhancing the quality of the food in its supermarkets, particularly in departments where it believed it could establish a competitive advantage, and, despite the recession, it isn't backing off its better edibles stance.

A&P is adapting, however, Christian Haub, the supermarket chain's executive chairman, told Bnet. Among the initial moves A&P made was to refurbish and upgrade food operations at its urban-oriented Food Emporium stores, most of which operate in Manhattan. They introduced enhanced bakeries, delis, produce, service meat and seafood, then added boutique candy presentations and a new center of the store operation focusing on expansive international food assortments. They also turned to events, particularly at the flagship Bridgemarket Food Emporium, operated in a vaulted chamber built into the foot of the Queensboro bridge.

For mainline stores, A&P developed the Fresh format, which features expanded deli operations â€" fresh-baked pizza and sushi included â€" enhanced bakery, locally procured seafood, Kobe beef in the meat department and a produce section featuring abundant presentations of store processed fresh-cut fruits and vegetables as well as signature displays of key product segments that featured, in the case of herbs, parsley, sage, rosemary, etcetera, packaged in trays and cellophane tubes, in fresh bunches and potted as live product.

The supermarket chain is taking the operations it has developed for its initial Fresh stores and using them to upgrade departmental presentation as it remodels namesake and Waldbaum's locations. Even in supermarkets that are too small or don't have the right clientele for comprehensive reconstitution, A&P is introducing Fresh elements that suit individual store situations. Once remodeled, they also are designated Fresh stores. A&P's better food emphasis will remain despite the recession, Haub said. The company is, however, adapting to circumstances, and he told Bnet how at a promotional event â€" dubbed Taste of Nature and featuring Austrian food products -- held last week at the Bridgemarket Food Emporium.

Bnet: Have the economic conditions been a challenge to A&P's food-oriented business strategy or have they provided opportunity as well?

Haub: I think you have to stay true to what you are no matter if it's recession or good times. I don't think you want to constantly change your strategy with the change of the environment.

We see great success with the Fresh concept we've developed under the A&P and Waldbaum's banners in the New York market and those stores continue to do well. We see the consumers changing their shopping behavior and buying different products at a temporarily reduced price, but I think there are a lot of consumers particularly in the markets where we operate A&P or Food Emporium, who are committed to buying high-quality food and giving their families a great and nutritious meal. There clearly are tactics you have to employ that cater to their desire to save money on their weekly food shopping. That's our promotional program and that's our negotiating with suppliers for lower prices.

The one strategy that has been very successful is the sale of private label, our own brands that we have an opportunity to highlight even more so because consumers are looking for that cheaper alternative. We have seen tremendous growth over the past six to 12 months with our own brands.

Bnet: Are you looking to merchandise and market in ways to help your customers as they make lifestyle changes?

Haub: Sure, that's definitely a goal, providing meal tips and recipes in the store or in our circulars. That's what customers are looking for. Help us to save money, help us to feed ourselves with healthy, nutritious foods. They may have said, 'Maybe I can't afford the organic alternative every day and maybe that's something I'm going to less frequently, and I'll buy more regular things just because it's cheaper.' We still want them to have a good experience. In tough times, family meals and consuming food can be a very enjoyable and an uplifting experience.

Tomorrow, Haub discusses how A&P is using private label and other tactics to execute its strategy.