A&P Launches Second Phase of Project Great Renewal; Builds on Successful Results Produced by Initial Phase.Business & High Tech Editors MONTVALE Montvale may mean:
- Company working with IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , Retek on $250 million supply chain initiative. System, process improvements expected to yield $325 million cash benefit over four years, ongoing profit improvement. The Great Atlantic & Pacific Tea Company, Inc. (NYSE NYSE See: New York Stock Exchange :GAP) today announced the second phase of A&P's Project Great Renewal, authorizing an after-tax investment of approximately $250 million over four years to develop a state of the art supply chain and business management infrastructure. The Company expects to achieve cash benefits over that period in the range of $325 million net of tax, derived from improved margins, lower operating costs operating costs npl → gastos mpl operacionales , reduction of working capital and improved product availability. When this new phase of Project Great Renewal has been fully implemented, the Company anticipates improvement in ongoing annual pre-tax operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of approximately $100 million. In addition, the Company expects that these initiatives will enhance its ability to increase sales by attracting more customers and increasing sales per transaction. However, the cash and ongoing operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. benefits stated above do not include such impacts. The initiative will be implemented by a dedicated team of A&P executives representing all key business functions, under the direction of Robert Panasuk, formerly President of A&P's New England New England, name applied to the region comprising six states of the NE United States—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, and Connecticut. The region is thought to have been so named by Capt. operations. Reporting to President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Christian Haub's eight-member Management Executive Committee, Mr. Panasuk's team will work with an onsite team from a new strategic alliance concentrating on the food and drug retailing industry formed by IBM (Somers, NY) and Retek (Minneapolis, MN), announced today in a separate press advisory issued jointly by the three companies. This combined team will upgrade all processes and business systems related to the flow of information and products between A&P-operated offices, distribution points and stores; and between the Company and its suppliers. Mr. Haub said, "We are proud to be the first major food and drug retailer to partner with this alliance of the leaders in the development of retail process, system and information solutions. Their combined expertise will help us transform our core business processes, provide Internet-based e-business capability, implement system solutions appropriate to our current and projected needs, and elevate el·e·vate tr.v. ele·vat·ed, ele·vat·ing, ele·vates 1. To move (something) to a higher place or position from a lower one; lift. 2. To increase the amplitude, intensity, or volume of. 3. our ability to leverage and apply knowledge and information. "This landmark investment in A&P's future follows the people and store development improvements begun just over a year ago, and therefore represents the third critical component of the Great Renewal strategy we charted in 1998," said Mr. Haub. "Combined, these initiatives will drive the top and bottom line improvements we have already achieved to leadership levels, by maximizing the impact and productivity of our customer focused market offering." The Company said the cost of implementing Great Renewal Phase II will reduce net earnings for fiscal year 2000, ending February 24, 2001, by approximately $1.50 per share. Benefits from improved systems and processes are expected to start late in fiscal 2000, contributing approximately 5 to 10 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. to this year's earnings. The Company expects benefits to accelerate in the following years, substantially offsetting costs in fiscal 2001, and having a significant, positive net impact on ongoing operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before beginning in fiscal 2002. The A&P/IBM/Retek Project Team will focus on business processes supporting Store Operations, Marketing and Merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. , Supply and Logistics, People Resources, Finance and the enabling technologies. This Great Renewal Phase II initiative is a major driver of the ongoing modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, of A&P's Information Systems framework, being directed by Nicholas Ioli, Senior Vice President and Chief Information Officer, who joined A&P's executive management team in 1999. Mr. Haub said the customer impact of this initiative will be a shopping experience that distinguishes A&P-operated stores from their competitors, by virtue of superior product variety targeted to local preferences; more effective promotional programs; improved in-stock levels and new item availability; consistently excellent fresh food quality, and upgraded store operating standards. "Excellence in all of these areas is essential if we are to accomplish our stated goal of becoming the Supermarket of Choice wherever we operate," said Mr. Haub. "Accordingly, we rejected piecemeal piecemeal patchy, e.g. necrosis of the liver in which groups of hepatocytes are separated by small groups of inflammatory cells and fine, fibrous septa following extension of the inflammatory process beyond the limiting plate. system and process solutions to shortcomings A shortcoming is a character flaw. Shortcomings may also be:
The Company said the work leading up to today's announcement was conducted over the past five months by a cross-functional team In business, a cross-functional team is a group of people with different functional expertise working toward a common goal. It may include people from finance, marketing, operations, and human resources departments. led by Bill McEwan William G. "Bill" McEwan is President, Chief Executive Officer and a director of Sobeys Inc., the second largest Canadian grocery retailer and food distributor. A native of Trail, British Columbia, at 15, McEwan had a part-time job bagging groceries at a local store; he , recently appointed President & CEO of the Company's new Atlantic
New Atlantic were an early 1990s UK rave band from Southport, Merseyside. Region. The A&P team worked closely with IBM systems integration and change management experts, resulting in the business plan approved today. The approval follows the Company's February 7 announcement of its new Atlantic Region management organization. As stated at that time, the regional organization was designed to focus operating management more closely on store performance and customer service issues, while positioning merchandising and marketing management to develop and implement more targeted, customer driven marketing programs. Mr. Haub today added, "The concentration of functions in the region greatly improves the ability of our management team to utilize the processes that will result from the Great Renewal Phase II initiative." The Company said it is entering this second phase of Project Great Renewal from a foundation of solid improvements achieved during the campaign's initial phase, launched by Mr. Haub and his executive management team in December of 1998. They include: - Positive comparable store sales of 4.0% for the fourth quarter of fiscal 1999 and 4.4% for the full year ended February 26, 2000, well above the industry average for the same period; - Number one market shares in Metro New York and Detroit, and number two shares in Ontario, Canada and New Orleans; the Company's core marketing areas accounting for 80% of total sales, in which A&P has increased its share over the last 12 months; - Reduction of costs through the closure of unproductive stores, consolidation of administrative facilities and improved expense management, as well as improved productivity in distribution and manufacturing. Those achievements, combined with strong sales trends, drove ongoing operating profits upward by 50% in fiscal 1999, on track with the Company's plan; - Achievement of management's commitment to add 55 new stores in fiscal 1999. In addition, the pipeline of new store projects has expanded, to support aggressive development targets of 60 new stores in fiscal 2000 and 75 the year after. - The strengthening of management and store associate teams through comprehensive People Resources initiatives, including new performance measurement and compensation programs; leadership and skills training at all levels; and the focus on shopper satisfaction being driven outward to the point of customer contact. Mr. Haub said, "At the outset of Project Great Renewal, we said the most important measures of success moving forward would be customer satisfaction and operating results. The structural moves and total Company culture change set in motion 15 months ago have clearly generated the initial improvements and forward momentum we believed they would. This is evidenced by the fact that we expect to report fiscal 1999 fourth quarter operating earnings on target with both our expectations, and the published First Call consensus. He concluded, "Our goal for Great Renewal Phase II is to develop this important systems and process platform for our customer focused marketing proposition. We are convinced that this initiative, combined with our ongoing people and store development efforts, will in due course elevate our performance and results to the leadership levels we are committed to achieve." Founded in 1859, A&P was the nation's first supermarket chain. One of North America's 10 largest supermarket companies, A&P operates in 16 states, the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). and Ontario, Canada under the following trade names: A&P, Waldbaum's, Food Emporium, Super Foodmart, Super Fresh, Farmer Jack, Kohl's, Sav-A-Center, Dominion dominion, power to rule, or that which is subject to rule. Before 1949 the term was used officially to describe the self-governing countries of the Commonwealth of Nations—e.g., Canada, Australia, or India. , The Barn and Food Basics
Food Basics is a no-frills Canadian supermarket chain created by A&P Canada to compete with the successful No Frills warehouse style supermarket operated by Loblaw. . This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. about the future performance of the Company which are based on Management's assumptions and beliefs in light of the information currently available to it. The Company assumes no obligation to update the information contained herein. These forward-looking statements are subject to uncertainties and other factors that could cause actual results to differ materially from such statements including, but not limited to: competitive practices and pricing in the food industry generally and particularly in the Company's principal markets; the Company's relationships with its employees and the terms of future collective bargaining agreements The contractual agreement between an employer and a Labor Union that governs wages, hours, and working conditions for employees and which can be enforced against both the employer and the union for failure to comply with its terms. ; the costs of other effects of legal and administrative cases and proceedings; the nature and extent of continued consolidation in the food industry; changes in the financial markets which may affect the Company's cost of capital and the ability of the Company to access capital; supply or quality control problems with the Company's vendors; and changes in economic conditions which affect the buying patterns of the Company's customers. |
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