Disappointing results from a recent bankruptcy auction could mean another 6,000 workers will join the line of former Great Atlantic & Pacific Tea Co. Inc. employees at the unemployment office by Thanksgiving, court papers indicate.

That estimate is based on about 70 stores that went unsold, with an average of 80 jobs per store. It is in addition to the jobs lost when 25 stores were closed by the troubled chain, and an unknown number of jobs lost at stores being sold to buyers that won't be operating grocery outlets. Less than half the stores sold last week involved deals for employees, or at least agreements to talk to employees.

A&P found buyers for about 50 stores during auctions held last week, including a store in Mount Kisco, N.Y., for $25 million. Another 95 A&P stores were sold off to rivals Albertsons Cos. and Stop & Shop Supermarket Co.

More than 100 locations are expected to hit the auction block Thursday, including the 70 or so that didn't attract a buyer last week.

A hearing to approve the results of the auctions has been scheduled for Oct. 16 in U.S. Bankruptcy Court in White Plains, N.Y. At that hearing, a bankruptcy judge will also consider A&P's bid to reject its union contract and end retiree benefits.

"We are still trying to narrow the differences," said Sunny Singh, a lawyer for A&P, of ongoing negotiations with the union.

The company declined to comment Wednesday on possible layoffs, and efforts continue to sell the stores that failed to find buyers. However, A&P is in the last stages of a bankruptcy liquidation, and time is running out.

Still, the picture's not all bleak for A&P's workforce, according to John Niccollai, a former apprentice butcher and New Jersey deputy attorney general, who is president of the largest United Food and Commercial Workers union local involved in the A&P bankruptcy.

Some 7,300 members of the local will lose their jobs, Mr. Niccollai said in an interview Wednesday with The Wall Street Journal. However, he added, close to 4,500 of those people have been promised employment with successor store operators.

"We're not putting up the white flag," the local union president said. Some stores up for auction could be sold this week; others will be sold over time, he predicted.

"Notwithstanding the fact that the auction wasn't a gold rush, with people running there to bid, we do think there are a lot of desirable locations that have not yet been sold that would cost probably $7 million to $10 million to reproduce. If you can go in and buy this for 10 cents on the dollar, you have to be crazy not to do so."

A&P's unionized workers are only getting about 52% of their severance pay, due to moves the company made in bankruptcy. For longtime grocery workers, even the slashed severance pay could be considerable, as much as $10,000, he said. Employees have told the Journal that nonunion workers were warned before the bankruptcy that they could expect little in the way of severance.

More important for the workforce, A&P was notorious for being "grossly understaffed," Mr. Niccollai said. Instead of investing in the stores to counter slumping sales, A&P cut jobs to save money, he said. New owners that want to improve the operation are adding staff at the acquired stores. Acme, for example, will be building up the hot and prepared foods offerings at the outlets it acquired from A&P, the union chief said.

"It's a question of how the successor company operates those stores, how they do business," Mr. Niccollai said. "We know A&P was bare-bones."

A&P was the nation's first traditional supermarket operator, with roots dating back to 1859. At its peak a century later, it boasted some 4,200 stores. Now owned by Ron Burkle's Yucaipa Cos. and Mount Kellett Capital Management, A&P filed for chapter 11 bankruptcy protection in July with debts of about $2.3 billion and assets about $1.6 billion.

Mr. Burkle's Yucaipa purchased A&P out of bankruptcy in 2012, and the chain had hoped its earlier bankruptcy restructuring would better position it to compete. It renegotiated labor costs with unions, and adjusted food and supply-chain costs with vendors. It also planned to remodel its outdated stores and modernize its technology.

But sales fell 6% to $5.5 billion in the latest fiscal year after a 7.6% drop the year before. That trend continued into this year.

Ilan Brat contributed to this article.

Write to Peg Brickley at peg.brickley@wsj.com

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(END) Dow Jones Newswires

October 07, 2015 17:25 ET (21:25 GMT)