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The new chip credit cards are being swept into the center of a growing dispute that has pitted two of America’s most prominent industries — banking and retailing — against each other, the New York Times reported today. The debate involves more than whether consumers will be adequately protected during a season that has been rife with security breaches: The battle could affect the long-simmering war over the billions of dollars in interchange fees that merchants pay to process credit and debit transactions. “That is the crux of the matter,” said David Robertson, publisher of The Nilson Report, a payments industry publication. “The real savings is not about fraud, the real savings is about interchange.” Last year, merchants paid about $61 billion in interchange fees, Robertson said, compared with about $30 billion in fraud losses. The fight involves new payment cards, issued over the last year, that come with a small square security chip that can help make in-person transactions more secure. Retailers complain that they have spent billions of dollars upgrading their payment terminals to accommodate a system that cuts down only on the fraud shouldered by banks, not merchants. Chip and PIN, long the standard in Europe, would help retailers verify not just the card, but the person using it. Writing to their colleagues in October, two attorneys general sounded a warning bell: The new security chip would not go far enough to make transactions safer. The credit cards need a PIN, too, they recommend.

A&P was granted another 120 days to file its bankruptcy plan, shifting the deadline to mid-March, and it was also given the green light to sell the Ramsey Pathmark to an Italian-themed supermarket chain, in court hearings on Friday, NJ.com reported on Saturday. Attorneys for A&P told Bankruptcy Judge Robert Drain that the company still plans to close all of its remaining supermarkets by the end of November, but that it needs the additional time to sell its assets and present its plan for a chapter 11 reorganization. Ray Schrock, lead attorney for A&P, said that as of Friday the company had sold 119 stores to new owners, and 79 more supermarkets will be sold by Dec. 9. A&P is still seeking buyers for 57 supermarkets, Schrock said.

Macy’s warned yesterday that its stores were awash with merchandise after a sluggish fall season and that slow business would force it to go all-out on discounts during the holidays, the New York Times reported today. Aggressive discounting from one of the country’s biggest merchants is bad news for retailers this holiday sales season, which is shaping up to be highly discount-driven. It also raises questions about the strength of the economic recovery, and of consumer sentiment. But a shift in the way Americans shop because of the proliferation of e-commerce, and the power to compare prices at a click of the mouse, has meant that a brightening economy is no longer a tide that raises all retailers, said Oliver Chen, a retail analyst at Cowen.

Haggen, the Bellingham, Wash.-based grocery chain whose failed expansion effort landed it in chapter 11 protection, now plans to offer for sale its 32 “core stores” in Washington and Oregon, the Seattle Times reported today. The company had hoped to retreat to those successful stores after selling or closing about 130 others across five Western states, nearly all acquired earlier this year in a bold acquisition of 146 locations from Albertsons and Safeway as those two giants merged. But in a court filing this week Haggen sought permission to take bids for those 32 locations in its home markets. A financing agreement “requires Haggen to explore potential outside opportunities for all of its operations, including the core stores,” the company said in a statement.

Olga’s Kitchen, a Detroit-area brand that fell on hard times as dining habits changed and shopping malls declined, could be purchased out of bankruptcy by Schostak Family Restaurants, which already owns part of 11 Olga's locations that are not part of the bankruptcy, the Detroit Free Press reported today. Livonia, Mich.-based Team Schostak Family Restaurants bid $8.3 million for all 27 remaining Olga's restaurants. Those locations are currently up for grabs in an auction that runs through Monday. Schostak Family Restaurants already owns 50 percent of the 11 Olga's locations not in bankruptcy through a decade-old development agreement with the regional pita wrap chain. If Schostak wins the auction, it would gain full control of those 11 locations — plus ownership of the 15 restaurants that Olga's still runs on its own.

The fate of City Sports was sealed when it deviated from its strategy to expand to suburban markets, its chief executive said yesterday, the Boston Globe reported today. Marty Hanaka said that his company’s opening of several stores in far-flung suburbs like Manhasset, N.Y., and Rockville, Md., proved to be the big money-loser that led to its bankruptcy filing last month. “Those stores had very, very high rent expenses, and they really fell short of their anticipated volume,” said Hanaka, a longtime retail executive and investor in City Sports who became its chief executive less than three months before it filed for bankruptcy. The Boston retailer, which filed for bankruptcy protection last month, failed to find a buyer to continue to operate the chain. After initially hoping to close eight of its stores and sell 18 for a new owner to operate, City Sports confirmed Wednesday that all 26 of its locations would be closed by the end of the year. Hanaka said that investors had expressed interest in continuing to operate the chain’s remaining 18 stores, but with the holiday shopping season coming up, no one could top the offer from Hilco Merchant Resources LLC, part of Hilco Global of Northbrook, Ill., and Gordon Brothers Retail Partners LLC of Boston, which plan to liquidate the remaining stores’ inventory by the end of the year.

The Great Atlantic & Pacific Tea Co. won bankruptcy-court approval for the sale of eight grocery stores Thursday, part of its ongoing effort to find buyers and complete sales for more than 100 unsold stores, the Wall Street Journal reported today. During a hearing at the U.S. Bankruptcy Court in White Plains, N.Y., Judge Robert Drain approved deals to hand off the eight stores to CVS Pharmacy, Food Emporium, PSK Supermarket Inc. and others. Motions to sell seven additional stores, some of which face objections from local unions, were adjourned to another hearing later this month. To date, the company has lined up buyers for about 190 of its nearly 300 stores, most of which have also already won court approval. Those sales include terms that seek to save about 17,000 jobs but leave many thousands more in jeopardy. A&P says that it is still working with its unions and new store owners to preserve as many jobs as possible.

Some of the debts owed by teen-clothing retailer Wet Seal Inc. that have gone unpaid since the chain filed for bankruptcy earlier this year will be partially paid off under a plan that was approved by a federal judge on Friday, Dow Jones Daily Bankruptcy Review reported today. With the signature of Judge Christopher Sontchi on the repayment plan, lawyers who sold the chain out of bankruptcy can begin writing final checks to pay off some of the company's older debts. Under the payout plan, general unsecured creditors can expect to be paid between 5.5 and 6.6 percent of what they are owed, according to earlier court documents. That group is owed about $82 million altogether, court papers said.