The key problems facing the company in the short-term are associated with the company's ability to make its supermarkets a destination for customers and to build a loyal customer base. A&P is focused on divesting itself of stores which are not performing or which would require extensive renovation and building up the quality of its existing stock. This strategy is complemented by the company's opening of new stores, sometimes in areas where older stores have been closed. A&P is bringing computer technology to the stores which not only increases the service to customers, but which also helps the company manage its inventory and purchasing better by using computers to analyze trends and even place orders.
A&P must also compete with nontraditional grocery marketers such as discount stores which have entered the food market in recent years. Companies such as Kmart and Wal-Mart now sell groceries in many of their locations which compete directly with the regional food chains. Some stores have actively solicited complementary goods (nonfood goods) while others have sought out strategic business partners in order to build greater traffic in a given location. A&P is addressing this challenge by working with other organizations, including banks, to provide additional services within the A&P locations to give customers additional incentive to patronize one store over another. Customers can now purchase groceries, complete banking tasks, fill prescriptions and buy a ready-to-eat meal prepared by a chef within the confines of some A&P locations.
Merely renovating the stores is not enough to make this a successful strategy. A significant challenge to A&P is communicating its new image and emphasis on customer service to the marketplace. The renovation and remodeling will mean little if customers are not aware that changes have taken place. This can be a difficult message to convey since the company cont
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