How will Tops handle changes in retail?
Financial restructuring is underway at Tops Markets, now that the company has filed for chapter 11 in U.S. Bankruptcy Court. But will it be enough to keep the company afloat for the long haul?
In making its restructuring announcement, Tops said, it has lined up $265 million in financing to support operations during the court supervised process.
"Which means that the bank has already done its due diligence on Tops, and is willing to provide that kind of financing, I think it's a great vote of confidence," said Gabby Wang, Assistant Professor of Accounting and Law, at the University at Buffalo's School of Management. Wang says, Tops needs to "figure out what kind of grocery store it wants to be." The local marketplace is already fiercely competitive and Wang says going forward the competition will be about technology.
"A lot of shoppers that go to grocery stores they don't want to wait in line. They want to just grab something and go. Whole Foods is going to be able to do that probably in a year or two years. They've already done that in Seattle. So a lot more grocery stores are probably going towards that direction. So Tops is going to have to think about, in addition to fixing their financial problems, how are they going to make themselves more attractive and more competitive," Wang said.
Shoppers have lots of choices and it's difficult now to remain loyal to one company.
"Ultimately, I think you care more about your pocketbook then, I guess, what you're familiar with. Like we might be traditionally more familiar with going to the mall and to the stores. But if now I can compare prices, and I now don't have to drive, then why not?" Wang said.
The market, she says, is going through a very transformative time both in terms of segmentation and technology and she suspects a lot of other grocery stores are facing the same issue.