A&P Case
COURSE NAME: CONSUMER BEHAVIOR
GROUP NO: 5
CASE NO: 1
CASE NAME: The Great Atlantic & Pacific Tea Company
SUBMITTED TO: Prof. Shyam Vyas
SUBMISSION DATE: 22nd January 2010
GROUP MEMBERS:
1) JAHANGIR SINGH SIDHU
E-mail id: sheikhu88@hotmail.com
Phone No: 97790-30663
2) HARJINDER ARORA
E-mail id: greaty_rock1@yahoo.co.in
Phone No: 97807-62077
Summary:
For decades The Great Atlantic & Pacific Tea Company (A&P) had dominated the US food and grocery market. However, with its size had come increasing managerial inefficiencies and an inability to respond to demands of a changing market. A very crucial error was made in the 1950’s when A&P failed to follow customers in their move to the suburbs. In 1971, William J Kane took over as chairman and CEO of A&P. This was a time when company sales had levelled off and profits were declining. In an effort to overcome this slide, Kane ordered the conversion of thousands of regular A&P units to “WEO” (Where Economy Originates) supermarkets, which were described as super-duper discount stores. ). The big difference between WEO’s and the company’s conventional units was lower prices on 90% of the merchandise and a reduction in the variety of production offered from an average of 11000 items (SKUs) to as few as 8000. In 1973, the retail chain lost its number one market position to Safeway. Jonathan Scott took over Kane’s position in 1975 recognizing that the retail chain had far too many deteriorating stores in declining urban neighbourhoods. Scott embarked on an ambitious program to close more than 1200 unprofitable units. In an effort to regain market position, Scott responded by introducing the ill-fated “Price & Pride” advertising program. . It was a spirit-building campaign. Modern stores with pleasing wide aisles served as a backdrop to the ads. As a consequence, customers again left in substantial numbers to shop at competing stores. During the mid-1970s,
GROUP NO: 5
CASE NO: 1
CASE NAME: The Great Atlantic & Pacific Tea Company
SUBMITTED TO: Prof. Shyam Vyas
SUBMISSION DATE: 22nd January 2010
GROUP MEMBERS:
1) JAHANGIR SINGH SIDHU
E-mail id: sheikhu88@hotmail.com
Phone No: 97790-30663
2) HARJINDER ARORA
E-mail id: greaty_rock1@yahoo.co.in
Phone No: 97807-62077
Summary:
For decades The Great Atlantic & Pacific Tea Company (A&P) had dominated the US food and grocery market. However, with its size had come increasing managerial inefficiencies and an inability to respond to demands of a changing market. A very crucial error was made in the 1950’s when A&P failed to follow customers in their move to the suburbs. In 1971, William J Kane took over as chairman and CEO of A&P. This was a time when company sales had levelled off and profits were declining. In an effort to overcome this slide, Kane ordered the conversion of thousands of regular A&P units to “WEO” (Where Economy Originates) supermarkets, which were described as super-duper discount stores. ). The big difference between WEO’s and the company’s conventional units was lower prices on 90% of the merchandise and a reduction in the variety of production offered from an average of 11000 items (SKUs) to as few as 8000. In 1973, the retail chain lost its number one market position to Safeway. Jonathan Scott took over Kane’s position in 1975 recognizing that the retail chain had far too many deteriorating stores in declining urban neighbourhoods. Scott embarked on an ambitious program to close more than 1200 unprofitable units. In an effort to regain market position, Scott responded by introducing the ill-fated “Price & Pride” advertising program. . It was a spirit-building campaign. Modern stores with pleasing wide aisles served as a backdrop to the ads. As a consequence, customers again left in substantial numbers to shop at competing stores. During the mid-1970s,