After filing for Chapter 11 in July, The Great Atlantic & Pacific Tea Company, which owns A&P and Pathmark in Montclair, the public was led to believe that the A&P would be sold to Acme and the Pathmark would remain open.
Now, a month later, the company sent formal notice to Montclair Mayor Robert Jackson on the closing of both locations and has started its termination process. In the notice, which Mayor Jackson shared with Baristanet, the Vice President of Human Resources and Labor Relations states:
As part of the chapter 11 process, the Company is engaging in a sale process through which it is seeking to sell all of its store locations. The Company already has signed contracts to sell 120 stores, subject to Bankruptcy Court approval, identified on the attached Exhibit A; and the Company is actively marketing all the stores identified on Exhibit B. In the event an employee does not receive an offer of employment from a purchaser of one of the Company’s stores, we expect that their job loss would occur during the two week period from November 12, 2015 to November 26, 2015.
The A&P in Upper Montclair is listed in “Exhibit A,” meaning it is in contract to sell. No information on the buyer is given in the letter, however on the company’s website, the location is listed under the agreement with Acme Markets Inc.
Pathmark in Lackawanna Plaza is listed in “Exhibit B,” meaning it is being “actively marketed to sell.”
Also listed in the notice are job titles of approximately 180 affected positions. (Exhibit C)
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The potential for a clean, well-stocked, and well-managed grocery store taking the place of Pathmark has me practically giddy. What I wouldn’t give for Stop & Shop to buy it! For those of us located in central Montclair, it would be nice to have an option besides Whole Foods.
sadie07…I too am really excited for what could happen here, but also nervous about what probably will. It seems that the fifty year lease that this piece of property owns, and would be transferred in the sale, has a ton of restrictions, clauses that prevent a lot of new, clean and surrounding development from happening.
A lot of what ends up happening in and around the Lackawanna Plaza Redevelopment (which in my opinion is the biggest and last parcel that will be developed in Montclair for a long long time) depends on what this supermarket property does. This property has a 50 YEAR LEASE WITH DECADES STILL LEFT ON IT! They are in control and have already blocked a number of neat innovative efforts that have been proposed for the area. Just last fall, some really promising renderings for for the adjacent, long-abandoned 5 mini-storefronts on Isreal Crane Way were put forth. They wanted to turn it into a rotating food court with outdoor seating. This was blocked and denied by Pathmark.
Long story short…this plaza has AMAZING potential BUT….
Just to make this clear: As required by the federal WARN Act, A&P has provided a notice of potential business closing. This is not a notice of closing; it is a legal requirement in advance of a possible closure.
In fact, as was announced some weeks ago, the Valley Road A&P is still under contract to sell to Acme if the bankruptcy court approves. Nothing has changed.
The Pathmark…well, RIP. Let’s hope it sells to a competent grocery chain, and doesn’t reopen as a dollar store or such.
Regarding the previous discussion about Acme markets, I did a lot of shopping at the newly rebuilt Acme on Long Beach Island last week and I have to say it’s a really nice store. It was closed after Sandy and completely renovated. An Acme store like that in the A&P location would be an improvement.
Maybe if we’re lucky it’ll be a Costco. Or even a Trader Joe’s or a Fairway.
According to multiple reports, A&P has asked its unions to waive certain provisions in their current contract. The unions have declined to do so, and the company has asked the bankruptcy judge to break the provisions.
When A&P exited bankruptcy the last time around the unions (four of them, IIRC) agreed to give backs which would allow the company to prosper. In return, the company agreed that any layoffs would be strictly by seniority, and that the current A&P contract would carry over to a new buyer if a store was sold. The company agreed, and the judge agreed.
The company has now asked the unions to waive that provision, arguing that Acme, Stop & Shop should not be bound to a contract as part of the sale. The unions have declined to waive. That provision would be anathema to non-union players like Whole Foods, Wegman’s, or Trader Joe’s.
(Kings, Shop Rite and Stop & Shop have roughly similar contracts. A&P has a less flexible contract, and Fairway has NY contracts for its Woodland Park store.)
Looks like the unions may have bargained themselves right out of a job and Upper Montclair out of a grocery store. Go unions!
Seems like most are giddy for a upscale or clean supermarket. I am sad these wonderful, hard working and friendly A&P workers will lose their jobs. Many of them come from the tri-state area to support their families. I’m just sorry to see them go and join the ranks of the unemployed.
A & P mismanaged itself right back into bankruptcy and it’s the unions’ fault???!!
The unions agreed to give backs after the first bankruptcy andi in return the company offered them certain safeguards Now the company doesn’t want to honor its side of the bargain (but I dont see anything about giving back to the unions what they already gave). and blames the unions for not agreeing again.
You misunderstand. I didn’t say union caused banruptcy (although labor costs are 2/3 of most firms’cost so it probably contributed). What I meant was that contract binds on buyers and that may discourage deal, hence no job and no store.Go unions!
I believe the Fresh Market chain is also non-union. That’s of interest because it would be a wonderful fit at Lackawanna Plaza or Valley Road. Like a smaller version of Whole Foods.
Two former A&P company stores have become Fresh Markets in recent months. One in a former A&P in Bedminster, the other in a former PathMark in Livingston. In each case, the store remained vacant for quite a while, which might have negated the successor union rights agreement.
Buying of food has changed. Weekly multi-bag food shopping on pay-day has given way to daily just-enough for today’s take-home pick-ups. Amazon, the largest distributor of goods has no stores, just centers for distribution and drop-shipments from vendors to consumers. Smaller food marts with fresher, ready-made, no prep might be the model next to succeed. In store vendors, like Boar’s Head deli at A&P might be more common. Sea-food concessions, bakeries are already common. A roof over the Walnut St Farmer’s Market and 12-hour-, 7-days a week might work out soon. Times are a changing. Small business heaven. That’s what we want isn’t it?
So how little must the employees earn so a wonderful non-union store comes in? It is nice that taxpayers are willing and able to pick up costs created by large companies that underpay their employees, but it might be nicer if companies paid a living wage,
So how little must the employees earn so a wonderful non-union store comes in? It is nice that taxpayers are willing and able to pick up costs created by large companies that underpay their employees, but it might be nicer if companies paid a living wage,
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Costco routinely makes the list of hundred best employers in the US. Non-union, pays well, has wonderful retention, pays employees partly in company stock, and a waiting list of potential employees.
I don’t think being union makes A&P or PathMark a “good store” any more than being non-union makes Fresh Market or Costco a “bad store”.
“A & P mismanaged itself right back into bankruptcy and it’s the unions’ fault???!!”
Let’s make a distinction between the rank & file and the union leadership. I assume the union leadership was unaware of the recidivism rate of Chapter 11 filers when they made the concessions. That’s unfortunate.
I also assume the union leadership was unaware of Chapter 11 and who it for & why it was written the way it was. Also unfortunate.
Lastly, I assume union leadership was generally unaware of whether senior management had demonstrated the essential skill sets in turning around a dying business.
As to the future, bricks & mortar is getting eaten by their own e-commerce arms now. Those that can will multi-purpose their valuable store locations into distribution centers in order to meet the same/next day delivery wave…at least in this first phase…to compete with the Amazons & Big Box formats. BTW, we almost had a Fresh Direct in Montclair this year. Retail is “over-stored” for a declining consumption market. In the past, it often was just a single selling channel disruption. Now, it is all a multi-platform, multi-channel disruption.
New to the younger ones – deja vu for us older ones. Small businesses are at risk
Separate track – Have you ever figured out why Montclair has such an extraordinary amount of nail salons and restaurants?
I’m curious how the closing/sell of Pathmark will affect the redevelopment of that part of the Lackawanna Redevelopment process. Could that space become converted into a police station? Could a new supermarket be built into the new proposed structure on the current surface parking lot?
If the redevelopment of Lackawanna Plaza does go in the “Chelsea Market” direction, than I could see it being expanded in that space. I’m curious how this will be addressed in the next workshop.
“The union leadership was unaware” strikes me as an especially sad commentary for the membership. They’ve paid their dues, and expect that they will be well represented.
Sad for everyone involved.
Very interesting tech speak Frank Rubacky that seems to have a point of view, but do you really think most people know what you are actually trying to say? Could you try it again please in less cryptic English for the college educated, but perhaps not MBA’d management consultants among us.
“Retail is “over-stored” for a declining consumption market. In the past, it often was just a single selling channel disruption. Now, it is all a multi-platform, multi-channel disruption.
New to the younger ones – deja vu for us older ones. Small businesses are at risk”
Good summary Frank R. Over-stored is descriptive term for it. “Omni-channel” is the term for meeting every conceivable way of getting goods to consumer. “BOPS” or Buy on line, pick up in store is causing issues with inventory in store, employee work and pay when commission is involved, retailers try to avoid paying it yet want employee to pick and ship. Time is the constant. Nail salons have not reached saturation in any context so far. Church St had 4 opticians at one time. Formerly it was bank branches, seemed to be an limitless need. Pharmacies for food distribution are on the up-swing… Cheerios and Cranberry juice with the prescriptions, candy and toys, in one stop. Mattresses at Burger King?
Yes, it is cryptic both because the way I process and the constraints of this format. In short, 3 things to consider – how you allocate your time, your costs and your spending priorities.
Priorities: Current trend is disposable income spending on experiences growing at the expense of consumer products. Experiences include travel, entertainment, and even home improvements. Look at how your household allocates its spending compared to a decade ago.
Time: always a key driver and convenience a key component of perceived value. The internet today is analogous in many ways to how malls changed retailing in the 1950s-1970s and market share from downtown shopping. Furthermore, the mobile commerce platform is growing fast. In China, it is already at 50% of all retail e-commerce. Free-standing stores face the highest risk. Their assortments are heavily skewed towards replacement purchases, are inconvenient, and as mentioned above, people prefer to purchase on an ‘as needed’ basis and not have to carry excess inventory in their shrinking household space. A big reason same day delivery/in-store pickup/repeat delivery is small, but growing.
Cost: retailer cost supply chain/operating efficiencies can only drive so much market share. Constant coupling/sales are declining in impact, erode margins and do not sustain loyalty Top-line growth (market share) has/will drive reinvented/new business models. Scale still applies, but it is less dependent on physical space & distributed, aging inventories in big box formats. Basically, retailers have to find a new way to offer a wider assortment with one-stop shopping. Big box format was the old solution, but retailers threw out customer service with the bath water.
High labor and real estate costs. Substantial hike in minimum wage. Just wait until inflation kicks in.
In Montclair’s commercial centers, the strategies are to create an arts & entertainment mecca to complement the dining scene. Experience purchases. Further, the primary driver is to get residents around the region to make Montclair a destination, e.g. take share of market from other towns.
Is this clearer?
wildwoodben,
I was composing while you were posting, but between the two of us, it should be clearer.
Never a consultant, but I loved playing Consultant Bingo during their presentations! Great fun!
“Omni-channel” term would definitely and almost immediately fill one square on my bingo card. I guess these days everyone plays on their smartphones/tablets. I wonder if the winner still calls out “bingo!”? Or is there a ringtone for that?
Trader Joe’s please!!!!!