The double squeeze - discounters at the low end and specialty at the high end.
Just took a look at their financials. Yikes! Haven't had a positive operating margin since 2006. Which likely meant death come 2008-2010. The grocery industry in some ways is counter-cyclical so it could be OK maybe perhaps.
Where problems likely arise:
1)Their gross margin was 30% (roughly the same each year) and was absorbed entirely by SG&A and than some.
2) Makes it difficult to handle other expenses. Like financing debt for one.
3) Likely had cost-control issues outside of COGS since their gross margin is above the average for grocery stores.
For fun.
Grocery portfolio is $10k into 19 publically traded grocery stocks. The reason why the Dow/S&P outperform my "grocery store index" is because of the massive beating that A&P took.
QKLS in China is the only other grocery stock that has performed badly in the same time frame (not as badly as AP though).
