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A&P Reorganization Targets Significant Cost Reductions and Improved Execution
MONTVALE, NJ - December 9, 2004 - The Great Atlantic & Pacific Tea Company, Inc. (A&P) today announced the next step of its reorganization, which began with the unification of its corporate and U.S. leadership and operating structure announced on November 4.
The initiative reported today, affecting the Company's U.S. business only, will reduce overhead costs by an estimated $50 million during fiscal 2005 and an additional $25 million in fiscal 2006. In addition to substantially improving efficiency, A&P said the reorganization will strengthen senior management control, focus local banners strictly on operating and customer service execution, and promote the rollout of its fresh and discount retail strategies.
The Company said it expects to incur cash transition charges of up to $10 million over the next year as changes are implemented. It is expected that approximately $4 million of that total will be charged against third quarter earnings, which are scheduled to be reported on January 7.
Christian Haub, Chairman and Chief Executive Officer, said, "Over the past two years, we have stabilized our U.S. 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 U.S. management organization, will give us the cost structure and capability to execute those strategies profitably."
Founded in 1859, A&P, one of the nation's first supermarket chains, is today among North America's largest. The Company operates 649 stores in 10 states, the District of Columbia and Ontario, Canada under the following tradenames: A&P, Waldbaum's, The Food Emporium, Super Foodmart, Super Fresh, Farmer Jack, Sav-A-Center, Dominion, The Barn Markets, Food Basics and Ultra Food & Drug.
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Investor Contact:
William J. Moss
Vice President, Treasurer
(201) 571- 4019
Press Contact:
Richard P. De Santa
Vice President, Corporate Affairs
(201) 571 - 4495
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