MONTVALE, N.J. (AP) — Great Atlantic & Pacific Tea Co. said Tuesday that third-quarter losses grew sharply due to drastic changes in shopping habits at supermarkets.
Supermarket operators have been forced to slash prices just to get shoppers in the door. Families hit hard by job losses are trying to make every dollar count.
Chairman and Interim CEO Christian Haub pointed out that most analysts expect poor conditions to persist through at least the first half of 2010.
Shares in one of the nation’s oldest supermarket chains tumbled 20 percent.
Stores sales have eroded as consumers trade down, buy less and skip impulse purchases.
Haub, however, said changes the company has made will begin paying off in coming months, following a 2009 that included the departure of CEO Eric Claus.
The operator of A&P and other grocery chains reported a loss of $559.6 million, or $14.35 per share, for the quarter. That compares with a loss of $14.4 million, or $1.90 per share, a year earlier.
Losses from continuing operations grew to $502.4 million, or $12.85 per share, compared with a loss from continuing operations of $3.8 million, or $1.62 per share, in the prior-year period.
The company said its quarterly results included goodwill, trademark and asset impairment charges totaling $412.6 million. It also included $16 million for mark-to-market adjustments related to financial liabilities.
While Great Atlantic struggled during the quarter, grocery chain Supervalu Inc. returned to a fiscal third-quarter profit Tuesday on tighter cost controls and stabilizing profit margins.
Great Atlantic reported sales for the three months ended Dec. 5 fell 8 percent to $1.96 billion from $2.12 billion.
Sales at stores open at least a year dropped 5.8 percent in the quarter. This figure is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.
Great Atlantic & Pacific Tea runs 433 stores in 8 states and the District of Columbia under the A&P, Waldbaum’s, Pathmark, Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics names.
Shares fell $2.57 to $10.31