MONTVALE, NJ-Officers of the Great Atlantic & Pacific Tea Company Inc., better known as A&P, said the grocery chain is improving its Northeastern operations as it divests its stores in the Midwest and South, in its recent first quarter report. Though total sales were flat, the company’s Northeast sales were $1.68 billion versus $1.65 billion in Q1 2006, and comparable store sales increased 1%. The company also reported a net loss for Q1 2007 at $43 million, or $1.03 per share, versus a loss of $6 million in the first quarter last year. In a conference call regarding the quarter, Christian Haub, chairman of the Board, said he believes the closures, new store layouts and a $1.3 billion merger with Pathmark, now pending with the Federal Trade Commission, will boost the company to truly formidable organization.

The firm, which operates 406 stores in nine states and the District of Columbia, under brands such as A&P, Sav-A-Center and Waldbaum’s, has been working for two years to get rid of the Farmer Jack chain, which it acquired in 1989. The company is also negotiating with several buyers for its 21 Sav-A-Center stores in Louisiana. Haub said in the conference that A&P expects to get up to $180 million for all the stores it’s selling.

Eric Claus, president and CEO, said in the call Friday that total sales were impacted by the close of the Midwest operations. “It wasn’t an easy decision, but it was necessary,” Claus said. “Out of 66 Farmer Jack stores, 20 were sold to Kroger, 23 were sold to various independents and 23 went dark, along with two distribution centers. The Sav-A-Centers deal is well advanced, we’re going to sell it as one unit. We expect to conclude a deal in the early fall; probably, but we’re not certain.”

The Pathmark deal is expected to add 141 stores to the company’s portfolio, with most of the stores in the Northeast. “We’re not looking to close any of the stores,” Haub said in the conference. “Their format is complimentary to ours, and we have different customers. If there are underperforming stores, we’ll look to see how to improve them.”

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