Pathmark was a supermarket chain in the Northeastern United States. The chain was started in 1968 when a member of the ShopRite retailer's cooperative broke away to go into business for itself.
Pathmark operated stores in New York, New Jersey, Connecticut, Pennsylvania, Delaware, and Maryland. In 2007, Supermarket News ranked Pathmark No. 31 in its annual "Top 75 North American Food Retailers" based on Pathmark's 2006 estimated sales of $4.1 billion. 2007 Top 75 North American Food Retailers, Supermarket News. Retrieved February 24, 2007. Based on 2005 revenue, Pathmark was the 67th largest retailer in the United States. Top 100 Retailers: The Nation's Retail Power Players (PDF) , Stores, July 2006.
Pathmark was well known by baby-boomers for its radio and television commercials starring character actor James Karen, who was the chain's spokesperson for more than 20 years. Pathmark's original spokesperson was Arlene Francis, who appeared in its commercials beginning almost immediately after Pathmark broke off from ShopRite. Produce Pete had starred in many of the company's commercials from 2001 until 2009. History / Expertise: "KNOW A LITTLE ABOUT A LOT". JACK OF ALL TRADES MASTER OF NONE.....
Supermarkets Operating Co. and General Super Markets (another subgroup within Wakefern) merged in 1966 to become Supermarkets General Corporation, with Perlmutter as president. Supermarkets General operated 75 ShopRites across Connecticut, Delaware, New Jersey, New York, and Pennsylvania by 1966, with annual sales of about $420 million. Supermarkets General achieved high volume by opening large stores in densely populated areas and keeping prices low on both nationally branded-goods and private-label items.
Pathmark's 81 supermarkets were accounting for about 85 percent of Supermarkets General's sales and 80 percent of its earnings in 1969.
Pathmark, in 1974, pioneered the use of Barcode reader at checkout counters.
In 1975, Pathmark, as part of a negotiated deal with the United Farm Workers, agreed to lead a delegation of East Coast-based supermarket chains to lobby the California Legislature on the passage of the first legislation in the nation that provided a mechanism for farmworkers to choose union representation by secret ballot. The legislation ended the conflict between the Teamsters and UFW.
In 1977, after relative stagnation, Pathmark opened its first Super Center, a larger, discount grocery store which also offered health and beauty aids, small appliances, and videotape rentals. These units generally were expanding and renovating existing stores. By December Pathmark had pharmacies in 81 of its 103 supermarkets, horticulture departments in 64, bakery departments in 60, and "mini-bank branches" in 13. In its 1977 annual report, Supermarkets General claimed its sales per store were the highest in the industry. "Pathmark does more than three times the business in a store only 33% larger than the industry average," the report said.
In its 1978 annual report, Supermarkets General claimed Pathmark had become the top supermarket chain in the New York area, with a 15-percent sales share. Twelve of its 109 stores now were Super Centers. That year, Pathmark sales volume was $1.8 billion; the chain contributed 82 percent to corporate profits. About 60 percent of the volume was generated in stores opened, enlarged, or substantially remodeled in the mid-1970s. Perlmutter died in 1978 and was succeeded by Louis Lowenstein as chief executive officer of Supermarkets General.
After about a year Lowenstein was removed and replaced by vice chairman Herb Brody, who shortly before his death in 1985 was succeeded by president Leonard Lieberman, who remained CEO until the company went private.
To foil a takeover bid by Dart Drug Corp., management took Supermarkets General private in a $2.1 billion leveraged buyout in 1987, in which Merrill Lynch Capital Markets Inc. received 55 percent of the shares, Equitable Life Assurance Society of the U.S., 35 percent, with management retaining 10 percent. Servicing the debt ($1.6 billion in early 1990, half of it in junk bonds) soon proved a problem. The company sold 25 of its free-standing drug stores in New Hampshire and Massachusetts to the Mellville Corp., which at the time operated CVS Pharmacy.
Although corporate sales reached $6 billion in fiscal 1989 (which ended January 28, 1989), the 51-unit Rickel subsidiary was performing poorly, while Pathmark, now with 142 stores, had slipped to third place in the New York area. Many Pathmark units had become, according to a Forbes article, "unkempt, dirty, and outmoded." The article goes on with "continues to stock scores of the dreary no-frills offerings customers have shunned for years." Merrill Lynch fired Chief Executive Kenneth Peskin, replacing him with Jack Futterman. The only bright spot for the parent company was its 66-unit Purity Supreme division, consisting of Massachusetts grocery and convenience store chains acquired in 1984. This division was sold in 1991 for about $265 million. (Supermarkets General's department stores had been sold in 1986.)
Supermarkets General lost money in each fiscal year from 1988 to 1993, and sales volume annually during FY 1989 to 1993. In fiscal 1993 it lost a record $617 million on sales of $4.34 billion, mainly reflecting a $600 million writedown of goodwill (the premium paid in excess of assets) in the 1987 buyout. The company's interest payments, averaging between $160 million and $180 million yearly on its debt, were hampering its efforts to modernize its stores and keep pace with competitors. Pathmark now had 146 supermarkets, 33 freestanding drug stores, and 7 distribution-processing facilities.
Pathmark now was betting on stores larger in size than its Super Centers. The Pathmark 2000 format, introduced in 1992, consisted of units up to . In 1995 there were 27 such stores, including some remodeled Pathmarks. The stores emphasized perishables, including produce, seafood, baked goods, flowers, plus health and beauty aids, in hoping to compete with drug store and discount competitors. These goods had higher profit margins than packaged groceries. Pathmark 2000 stores also featured a customer service desk for product returns, video rentals, film processing, and UPS delivery; and restrooms with tables for changing diapers. There were 44 such stores in May 1996, with 53 in February 1997.
In 1994, Pathmark added to its private-label products, introducing an upscale line, Pathmark Preferred, to its generic and mid-tier brands. Pathmark's over 3,300 private-label items were accounting for about 24 percent of its sales. In late 1995, a Long Island Pathmark launched Chef's Creations, which offered a menu of entrees, side dishes, and salads, made daily by a team of chefs. In late 1996, Pathmark introduced Chef's Creations To Go, fresh, prepackaged meals for takeout, offering choice entrees and side dishes in microwavable containers. An outside manufacturer was preparing these meals to Pathmark's specifications.
Brooklyn, the Bronx, and Staten Island, Pathmark now was operating 17 superstores in the city. Meanwhile, Pathmark's eight Connecticut units had declining sales each quarter. In 1992, two Connecticut supermarkets were converted to a new deep-discount drug store format, Pathmark Super-Drug, which reduced the perishable selection but greatly increased the store's general-merchandise offerings, as well as added a warehouse-sized package section. By 1994, another four Connecticut Pathmark supermarkets were converted. Pathmark Super-Drug stores were modeled after similar chains, such as Phar-Mor and RX Place (operated by Woolworth).
Pathmark was named 1995 "Pharmacy Chain of the Year" by the magazine Drug Topics, the first time a supermarket had won the award. Of Pathmark's 142 supermarkets, all had pharmacies except 6 found in shopping centers where there were lease restrictions. According to Pathmark, it was the leader in filling prescriptions in the New York area, and was participating in over 200 major insurance plans. Prescriptions accounted for nearly 7 percent of Pathmark's sales volume in 1994. Futterman, Pathmark's chief executive officer, is, in fact, a registered pharmacist.
In June 1995, Pathmark reduced its pharmacy operations, selling 30 of its 36 freestanding drugstores to Rite Aid Corp. for $60 million. These pharmacies had accounted for sales of $145 million in fiscal year 1995, about 3.5 percent of Pathmark's total. A company executive said that although the 30 stores were profitable, Pathmark had decided to concentrate on supermarket pharmacies, which were more efficient and attractive to customers. Pathmark's remaining 6 drugstores, operating under the "Super Drug" banner in Connecticut, were closed in 1995 and 1996. In September 1998, Pathmark's two remaining Connecticut supermarkets, in Bridgeport and Norwalk, were closed, signaling Pathmark's exit from New England.
Construction began in August 1997 on Pathmark's controversial $14.5 million supermarket on 125th Street in Manhattan's East Harlem. This unit was the largest supermarket in Harlem, and had been bitterly opposed by owners of neighborhood convenience stores. This Pathmark was expected to generate hundreds of construction jobs, and within the store, which would include a pharmacy and a Chase bank branch. Pathmark was planning its biggest Bronx store in 1998: a unit on in the blighted area east of Crotona Park.
Supermarkets General cut its losses in fiscal year 1994 (ending January 29, 1994, which the company defined as 1993) to $17 million (excluding extraordinary items and accounting changes) on net sales of $4.21 billion. It had its first profitable year in fiscal year 1995 (ended January 28, 1995) since fiscal year 1987, earning $10 million (not counting a $13 million credit for prior losses) on $4.21 billion in net sales. Pathmark sales were $3.84 billion and $3.79 in fiscal 1994 and 1995 respectively.
In fiscal year 1996 (ending February 3, 1996), Supermarkets General had net income of $77 million on sales of $3.97 billion. Pathmark's sales were $3.85 billion. In fiscal year 1997 (ending February 1, 1997), the parent company had a net loss of $20 million on sales of $3.71 billion. This included a charge the company took for the upcoming sale of 12 unprofitable Pathmark stores, mostly in southern New Jersey. Pathmark's supermarket sales came to all but $9 million of the corporate total. Same-store sales decreased 2.8 percent from the previous fiscal year, primarily due to heavy competition. James Donald, Futterman's successor as chief executive officer, laid off over 200 employees at Pathmark's Woodbridge, New Jersey headquarters in March 1997.
In 1997, Woodbridge was home to Pathmark's corporate headquarters, and distribution facilities for dry groceries, meat, dairy, and delicatessen products, plus a distribution facility for frozen food in Dayton, New Jersey, a complex for dry groceries in New Brunswick, New Jersey; and one for general merchandise (health care, beauty products, pharmaceuticals, and tobacco) in Edison, New Jersey. It had processing facilities for delicatessen products in Somerset, New Jersey and for banana ripening in Avenel, New Jersey. Pathmark's stores ranged from 26,000 to in size. All but five were either Pathmark 2000 or Super Center stores, and all but seven included a pharmacy.
In October 1997 Pathmark announced that C&S Wholesale Grocers of Brattleboro, Vermont would take over its distribution facilities and become the chain's supplier for almost all groceries and perishables. Pathmark received $50 million from the deal, which was used towards its $1.47 billion debt.
Ahold, a Dutch supermarket company which operated Edwards stores in the New York area. Under the terms of the deal, Edwards Super Food Stores would become Pathmarks. The sale was abandoned after the FTC rejected Ahold's offer to divest overlapping stores, saying the offer would "not preserve competition" in the New York area. Ahold decided to cancel the acquisition; in 2000 it announced that it would rebrand Edwards stores as Stop & Shop.
In February 2007, Pathmark partnered with Wild Oats Markets by adding Wild Oats-brand private label goods to the 141 Pathmarks. Approximately 150 organic and natural products were included in the partnership, among them: Italy sodas, balsamic vinegar, organic food fruit spreads, and flatbread crackers. Pathmark Stores Introduce Hundreds of Wild Oats Brand Specialty Products, Wild Oats Markets, Inc., February 6, 2007.
After the concept was tested in the two Northern New Jersey stores, A&P announced the conversion of 16 Pathmark Super Centers, plus 8 of the 13 Philadelphia-area A&P Super Fresh stores to the Pathmark Sav-A-Center banner. A&P eventually rolled out the Sav-A-Center branding to Pathmark's website and circulars.
In 2009, several changes were made to Pathmark. Among them, the North Edison, New Jersey store was closed, and a former A&P in nearby South Plainfield opened as a Pathmark Sav-A-Center. The North Plainfield Pathmark also closed as part of this store consolidation. Meanwhile, A&P was updating its former Super Center branding by retrofitting older stores with new interior decor to comply with its "Sav-A-Center'' branding.
In August 2011, a Super Fresh store opened in the Northern Liberties section of Philadelphia in place of a planned Pathmark, reflecting the parent company's diminished faith in the Pathmark banner.
On July 19, 2015, A&P filed for Chapter 11 protection for the second time in less than five years. By November 25, 2015 all Pathmark stores were either closed or sold to other chains such as Acme Markets, Stop & Shop, Key Food, ShopRite, and other competitors. The 156-year history of A&P also disappeared.
On February 10, 2016, northeast retailer cooperative Allegiance Retail Services LLC purchased the intellectual property Pathmark, including the logo, trademarks, brand name, pathmark.com domain, and all other intellectual property associated with the Pathmark name for $1 million. Allegiance supports independent supermarkets such as Foodtown, Freshtown, Freshco, D’Agostino, LaBella Marketplace, Brooklyn Harvest, Market Fresh, Big Deal Food Market and Uncle Giuseppe’s Marketplace by providing them with marketing, advertising, technological and merchandising services, as well as a full line of Foodtown private label products.