Share this article

US grocery retailer The Great Atlantic & Pacific Tea Company (A&P) has announced an initiative to reduce costs at its US business as part of the company’s reorganisation.

The company said it plans to reduce overhead costs by an estimated US$50m during fiscal 2005 and an additional $25m in fiscal 2006. In addition to improving efficiency, A&P said the reorganisation will strengthen senior management control, focus local banners strictly on operating and customer service execution, and promote the rollout of its fresh market and discount retail strategies.

The company said it expects to incur cash charges of up to $10m over the next year as changes are implemented.

“Over the past two years, we have stabilised our US operations and maintained the success of A&P Canada. We must now accelerate our improvement to reach and surpass breakeven performance as rapidly as possible, and drive the execution of our promising fresh market and discount retail strategies throughout our store network. These difficult but necessary actions, aligned with the unification of our US management organisation, will give us the cost structure and capability to execute those strategies profitably,” said chairman and CEO Christian Haub.