Simple. It neglects its core brand, A&P, and it goes trudging off in all sorts of different directions in search of something new. A&P has been doing this for decades, and now, finally, an iconic American retailer is bankrupt. The good news is that the chain is still operating, and will attempt a turnaround. The brand is so strong, in fact, that it could again become a leading grocery retailer, if only it would get back to its core.

A&P, just celebrating its 150th anniversary, was at one time a hybrid between Starbucks and Wal-Mart; the nation’s leading grocery store chain AND a national leader with its coffee roasting operation, Eight O’Clock. It was as if Starbucks expanded its brand into deluxe grocery stores. Today, it is a regional Northeast grocery store chain with a hodgepodge lodge of grocery store brands, including Super Fresh, Pathmark, A&P and Food Emporium.

Earlier this year, as the chain was on the brink of bankruptcy, it was busy doing a new line of food products under the Food Emporium brand. Now, using a retail brand and developing store brands is a smart strategy, but a company does not do this when it is losing money. And investing in food brands like Food Emporium at such a time is rather like making repairs to the Queens costume jewelry while the Crown Jewels sit in a bank vault. Fix those Crown Jewels and put them out on display in the Tower of London, please! Instead, A&P sold off Eight O’Clock. It should have done the opposite; sold off all the other grocery chains and kept the remaining A&P stores and the coffee brand. (By the way, the new owners of Eight O’Clock are already screwing with the packaging; see link below.)

Other than the new collection of international specialties under The Food Emporium Trading Company brand, the company has in recent years focused on a selection of new store and retail brands. Can we discuss the nightmare of the odd Farmer Jack retail brand? It has missed a rich legacy of dozens of store brands (see link below) that are quite beloved. Some of the current store brands include:

• Green Way
• Hartford Reserve
• Via Roma
• Market Spa
• Live Better
• Preferred Pet

Recently, Brand Packaging named A&P v/p and exec Doug Parker as a 2010 Brand Innovator. Parker had this to say:

• BEST ADVICE YOU EVER RECEIVED: “Don’t follow the beaten path.”
• WHAT BRANDS DO YOU ADMIRE? The brands that haven’t been created yet!

I would have to disagree with both, at least in the case of A&P. The reality is that A&P has quite storied store brands, and it does not need to follow new paths or create new brands. And in the last 40 years the company has been routinely ditching old, unsuccessful paths, and spending way too much time creating new paths, most recently the awful Pathmark debacle. It needs to get back to its roots, and sell a simple selection of good products at reasonable prices, under one store name, A&P. Furthermore, it needs to get back the classic post war “cupola” store design that customers recall with such fondness. Not that the other retail concept brands don’t have value; Food Emporium certainly does. It’s just that a company with minimum resources has to focus on one thing, namely being A&P.

As it returns to its roots, A&P has a whole selection of great old brand names that could easily be dusted off. Heck, some could later be spun off, just as Eight O’Clock was. Pictured above, an entry on A&P’s Ann Page brand from our Phoenix Contest with the students from the Savannah College of Art and Design.

Below, recent BrandlandUSA stories on A&P.

• A&P’s Fruitcake Strategy
• The History of A&P Store Brands
• Ways to Revive A&P

I was appalled at the change; I thought the company had decided to retain the venerable red bag.

A&P is about to experience its 150th Anniversary, but it has struggled, and is tiny compared to its heyday, when it had stores across the nation and in Canada. The question asked of the students? How could this once great grocery chain reposition itself? It was once known for Eight o Clock coffee, and was more associated with coffee than Starbucks ever was. But now it is just a regional grocery chain in the Northeast and a few Southern markets.

Nevertheless, it had some legendary in house brands that the company has begun to tap into, including Jane Parker, A&P’s bread and fruitcake brand. It, however, sold Eight O’Clock Coffee, which was once an in house brand that became a national brand because of its association with A&P.

Store Brand Approach

Above, Stephen Cyr goes straight for the nostalgic jugular, with a recall ad for Ann Page, one of many store brands for A&P.

Brand problem: Although once the leader brand in their category, boasting private labels that Americans knew and loved, A&P has shrunk from a unique, national grocery chain to a niche supermarket chain secluded to the Northeast.

Brand solution: Focus on the “Ann Page” private label and use its age as a proof point of its quality and wholesomeness, thus helping to position A&P as an innocent brand.

Burton Runyan’s Quality Ingredients Approach

Here, student Burton C. Runyan takes a high end approach, harkening back to the history of A&P and evoking images of 19th century trading. A bit from Runyan:

Brand Problem: The A&P went from 16,000 stores in the 1930s to only 110 today. In a market with national, regional, and local chains and stores, A&P became lost in the mind of the consumer. The typical grocery supermarkets are all positioned similarly and A&P must break from this to stand out.

Brand Solution: To keep The A&P from becoming The Late, Great Atlantic and Pacific Tea Company, position them as an “Explorer” brand. This is achieved by touting the fact that the chain was once a leader in its category because of a passion for bringing trade goods in to one primary location where everyone could get them. Their 150-year history gives them the credentials to back this position up.

In John Updike’s Kennedy-era short story “A&P” a 19-year-old clerk identifies with three scantily clad girls who come into an A&P in a small town in Massachusetts, and offend the manager. A great line:

“I forgot to say he thinks he’s going to be manager some sunny day, maybe in 1990 when it’s called the Great Alexandrov and Petrooshki Tea Company or something..”

Today, while the chain is still called A&P, it is thankfully run by Germans, not Soviets, and has 444 stores in the Northeast under brands like Waldbaums, A&P, Pathmark, Food Emporium and Super Fresh. At the time Updike wrote the story, A&P dominated the national grocery market. The colonial cupolas on its 4,300 supermarkets were as ubiquitous as Wal-Mart (NYSE: WMT), in every city large and small.

But in the 1970s, A&P fell apart. Not only did the chain not invest in new stores, they ditched a logo as classic as Coke’s. Instead of stylish graphics, they brought in cheap “Pride and Price” mascots and garish WE-O (we owe you more) promotions. The stores were allowed to run down.

There was hope for change in 1979, when the founding Hartford family’s interests were taken over by The Tengelmann Group (Tengelmann Warenhandelsgesellschaft KG) of Germany. Since then, it has been a roller coaster of a stock ride. The price, around $5 a share in 1980, went up as high as $62 in 1989 but is back at just under $4.

Why the ups and downs? While one could write many business case studies on it, I believe that one main reason they have suffered is that they have been obsessed with other grocery chain brands while mostly ignoring what was great, namely the classic A&P concept.

Instead of really nurturing its own unique set of in-store product brands, it is now a holding company that is a conglomeration of grocery store branded formats including A&P, Super Fresh, Food Emporium, Waldbaums and Pathmark. While many of these are good brands, it is an insane strategy for a company with a brand as interesting and storied as A&P.

A&P owns Super Fresh, a grocery store format that my fellow college students in Richmond, Virginia nicknamed “Super Scary” because of its bad location, substance-abusing customers and run-down condition. A&P sort of renovated the store interior (a former Pantry Pride) but they never insisted that the potholed parking lot be filled in, and the store closed. In the 1990s, I watched as many of those cretinous Super Scaries became Farmer Jack, a format with odd cutout figures of hick farmers hung above the different sections. It was a really dumb version of Stew Leonard’s.

At the same time they added the different formats, they ditched A&P’s private labels in favor of brands like America’s Choice, Master Choice and Health Pride. Big mistake, as the A&P brand was built on an astonishing array of private brands, all crafted with care and thought. (The Eight O’Clock brand, now an independent company, sold for over $100 million just a few years ago.) The brands included Ann Page, Red Circle Coffee, Sail cleaners and detergents, Sultana, Cap’n John’s seafood items, Sparkle gelatin, Cheeri-Aid, White House evaporated milk, Our Own, Nectar tea, Ahoy liquid dishwashing detergent, Yukon Club beverages, Iona canned vegetables, Worthmore candies, Crestview small/medium eggs, Wildmere large eggs, Sunnybrook (extra large eggs and butter), Sunnyfield (pancake mix, flour), Penguin ice cream, Marvel bread and ice cream, Allgood bacon, Dexola shortening, Nutley margarine and Super Right meats.

While each of these brands were not worth $100 million, they were worth something, and they were all thrown out like week-old fish. But the store brands weren’t the only thing right about the A&P brand. What was good?

• A&Ps always had a limited number of SKUs,  which meant it was an easy store for customers to negotiate.
• The stores were almost all the same, allowing for efficiencies in store plan.
• Prices were important, but the approach was of a quality of Trader Joe. For instance, the coffee grinders at the end of the checkout were a symbol of A&P’s roots in coffee and tea, which A&P dominated.
• A&P focused on presentation. The Regalo logo seen above was not just a logo, it was a complete branded produce program of A&P, where fruits and vegetables were meticulously sorted and stacked in gorgeous pyramids.

There are good signs at the company. The first good sign is that they have invested in a new A&P store model; while I haven’t seen it, the photos of their Holmdel, N.J. store look promising, though I have to argue with their promoting Starbucks inside of an A&P (it ought to be centered around the Eight O’Clock brand, not Starbucks). A&P has tried every trick to turn itself around in the last 30 years; it’s about time they are now investing in their 150-year-old A&P brand story in order to make themselves relevant in 2009.

This year is the 150th anniversary of A&P. Thankfully, they are also reintroducing products with A&P stories, leveraging that brand legacy, and receiving favorable press on trend-setting foodie websites like Roadfood.com and Epicurious.They offer a Hartford Reserve pie brand. And for Christmas, they re-introduced Jane Parker Fruitcake, reviving a yearly holiday tradition.

Now, we know that fruitcake is no strategy for a grocery chain. But it’s the right start.

A recent study from Consumer Reports, published on Yahoo, looked at coffee from blind taste tests, including all brands.

Their verdict? We quote Consumer Reports:

• Chock full o’Nuts and Maxwell House have pushed coffee that’s “heavenly” and “good to the last drop” since 1932 and 1907, respectively. But off-notes, little complexity, and, for Chock full o’ Nuts, variable quality put both behind Eight O’Clock.
• Midwest-based Caribou and Kickapoo beat an array of larger players among regular coffees. But Bucks County Coffee, from Langhorne, Penn., tasted only OK, and Peet’s, from Berkeley, Calif., was burnt and bitter, despite costing $14 per pound. Peet’s, Archer Farms, and Kickapoo also varied from batch to batch.

Jane Parker is BACK. Yippeee.

Apparently, the Great Atlantic and Pacific Tea Company (NYSE: GAP) re-introduced Jane Parker Fruitcake, and now is making the selling of this brand a yearly holiday tradition. Could Ann Page spices be next?

As far as we know, they aren’t reintroducing the other items that had the Jane Parker name, like bread, but the fruitcake was an American classic. Lollipop museum founder Huntington Hartford would be happy.

It’s a good sign for the Great Atlantic & Pacific Tea Company, which is celebrating its 150th anniversary in 2009. The company has enormous amounts of brand goodwill, which it ought to use every way it can.

We are big fans of the history of A&P, and living far away from the closest store, we miss, we miss, we miss the A&P.

See the website for Great Atlantic & Pacific Tea Co.

And if you missed it like us, they are still selling them on Amazon.

The big question: Do you like your fruitcake hot? Or not.

And the other question for BrandlandUSA readers. Other than Eight O’Clock and Bokar, and Ann Page, what were the older store brands of A&P?