Analysts Speculate on Marshall's Plans for A&P

Supermarket News, a food industry publication, cites several financial analysts on what may be expected from new A&P CEO, Ron Marshall when he takes control of the company on February 8. Among the analyst’s speculations are that he will rein in capital spending and will not hesitate to dispose of unproductive stores and geographies.

“Ron’s got an eclectic range of experience that looks like its going to be the right prescription to help A&P on the top line and the bottom line, with everything from transportation to competitive retailing”, said Burt P. Flickinger III, managing director of Strategic Resource Group, New York.  He also said the new CEO, “Knows price-impact store formats well and could build Food Basic into more of a powerhouse in the U. S.”

Another source who asked not to be identified by Supermarket News said, “He’s a hard-nosed leader who will have no sacred cows. I expect to see some important strategic decisions from A&P in the future.” The unnamed source said he “expected A&P under Marshall to be quick to exit unprofitable geographies to focus on core locations in the New York and Philadelphia regions. (He) could put up stores for sale in outlying areas like New York’s northern suburbs, Connecticut and Maryland.”

Another analyst, Karen Short of BMO Capital Markets, New York concentrated her remarks on Marshall’s track record on spending, “There hasn’t been fabulous discipline with regard to costs at A&P…if that is, in fact, the possibility (referring to a comment by Executive Chairman, Christian Haub that a company of A&P’s size ought to be able to make $150M in expense cuts annually), maybe Ron is the right person for the job.” But she said she was not confident that between union labor, a supply contract with C&S (Wholesalers) and overhead, that room exists to make such cuts. She also said she was skeptical that A&P would find willing buyers for its less desirable properties should it choose to sell them.

Jon Springer is the author of the Supermarket News article, published in its Febraury 1, 2010 edition.