Inside Pathmark’s Resurrection

The pending resurrection of Pathmark will be carried out with authentic branding and decor—and also a dash of secret sauce.

That was the message from officials of Allegiance Retail Services and PSK Supermarkets, who previewed a return of the venerable brand for the first time since its stores were all sold or closed in the Chapter 11 bankruptcy of its then-parent A&P in 2015. Allegiance, a cooperative owned by its independent retailers, picked up the Pathmark intellectual property in the same bankruptcy auction.

Its new store, owned by PSK and serviced by Allegiance, should fit right into its new home in the East Flatbush section of Brooklyn: The same site was a Pathmark for 47 years. It reopens to neighborhood shoppers next week.

PSK, which operates 12 other stores, including five in Brooklyn, mainly under the Foodtown brand, reacquired the site with an eye toward reactivating the Pathmark brand, PSK’s co-president Noah Katz said. The store had been acquired in the bankruptcy auction by Key Food Stores Cooperative and operated as a Key Food store by one of its members until PSK took over in December, closing the store for a three-month renovation.

At the preview event this week, dozens of workers were stocking shelves and making other final touches in preparation for an April 10 grand opening. The store originally opened as a Pathmark on Dec. 11, 1968. The “Stack it high, watch it fly” philosophy will continue in its new activation, Katz said.

This photo, provided by Allegiance earlier this year, illustrates the extent of the renovation. Katz said the company pulled out miles of wiring, replaced all the refrigeration and kitchen equipment, and also radically reset the store to provide more room for checkout and fresh foods. It also removed the pharmacy that was once there.

John Derderian (right) is president and COO of Allegiance, but before that he spent 33 years as a leader at Pathmark, and counts plenty of former colleagues on his team. He said the store would reflect recognizable elements of Pathmark, including the decor and value-forward positioning, but also include contemporary adjustments such as a wider assortment of natural and organic products and an e-commerce offering.

Dan Dinkowitz, senior director of sales and merchandising for Allegiance, spent 37 years in various roles for Pathmark. Derderian described him as the “essence” of the brand’s renewal.

“Pathmark portrayed value, and the entire organization was energized on sales,” Dinkowitz said when asked to comment on what separated Pathmark from its rivals. “That energy level started at the top and went all the way to the store level, to the cashiers who would report back who was selling more. All of that became a very competitive culture of selling, and at the same time there was a very keen eye on profits. So there was just as strong emphasis on sales as there was on gross profits. That became a culture.

“The other thing Pathmark did was: It knew how to navigate the city,” Dinkowitz continued. “They would not be afraid to go into some very depressed neighborhoods and make that sales program come alive there.”

“Once we get the model running fairly well, which we’re confident about, we will start to open other Pathmarks,” Noah Katz, co-president of Mount Vernon, N.Y.-based PSK, told WGB in an interview. Among his company’s stores is a former Pathmark on 145th Street in Manhattan, currently operating under the Super Foodtown banner.

The decor and signage—including the checkerboard design—is straight out of Pathmark’s 1989 vintage, said Katz. Aisle signs are identified by neighborhood streets, bringing a community angle to the store.

A wide center aisle will be a featured attraction for shoppers, with specialty ethnic products priced to move. Brand research indicated Pathmark would resonate strongly will millennial moms in urban neighborhoods. The customer is under 40, racially diverse, has a midlevel income and is seeking value as defined by price, convenience and variety.

A staggering 120,000 people live within a 1-mile radius of the East Flatbush store. They are a diverse group composed of about 40% African American, 37% West Indian, 8% Hispanic, 8% sub-Saharan African and 4% Asian. The median household income is $66,100.

This stack of massive Thai-style rice packages will define the center aisle for at least some shoppers.

For a store expected to drive big volumes, a big parking lot is one of the key determinants for which stores can become a Pathmark, Derderian said. “You don’t want to sell things and promote things we’ll do here in a small store because the mix isn’t going to work, so we need a store around this size that has a parking lot. That’s the first filter. And the second one is, does the member want to commit to it? We’ll see how this one goes, but if goes as well as we hope, there will be a lot of interest.”