The last four or five books I’ve written about have been fairly mainstream books. Well, watch out, because I’m about to go straight grocery store nerd on ya’ll.
That’s right. The history of The Great Atlantic and Pacific Tea Company. Hell yeah. Jumped several books on the list. And I’m glad it did. Marc Levinson’s “The Great A&P and the Struggle for Small Business in America” was a fantastic book about the grocery industry, business, politics and ultimately, the collapse of the largest retailer in the U.S.
Levinson wastes no time trying to uncover the real story of A&P. Right out of the gate, he thoroughly debunks the company’s official history, which notes the company was founded by George Hartford. Instead, Levinson tells us, it was actually George Gilman, a businessman with a taste for promotion and advertising. The Hartfords perfected and grew the business and ultimately co-opted the official history of the company. I think it is humorous how companies can massage their own history to help reinforce the brand image they are seeking.
Along the way, we get plenty of interesting facts about the grocery industry. (I know, keep laughing.) For instance, in 1929, there was one food store for every fifty-one American families. In the twenties, the average family spent one-third (!) of its budget on groceries. Food distribution relied heavily on wholesalers, the average store carried about 400 items, and most customers purchased food on credit, presumably without expensive interchange fees.
Levinson goes to great lengths to explain just how big and influential A&P was during the early part of the twentieth century. This was critical to the story because today A&P is a shell of its former self, bankrupt, and regional. You likely don’t know what A&P is unless you are over 60. A&P pioneered the low-price and high-volume strategy, finding the sweet spot where “the lines cross.” They opened thousands of stores in rapid succession. They dominated in the old trading stamp promotions that grocery stores used to run. They developed private-label brands. The efficiency they demanded ended up giving real value to the lives of Americans—food largely got better, safer, and less expensive.
They were also reviled by small town grocers and independent businesses. A&P used its massive buying power to force prices down and were tough competitors. Given today’s marketplace, this drama may sound familiar to you. Anti-A&P interests began to organize. Opponents held investigations of A&P’s practices, passed new chain store taxes, and generally tried to force them out of business. I find it fascinating that, despite the developments in grassroots politics, communication and media, the anti A&P forces were able to achieve more in their campaign than the anti-big-box store groups were able to do in today’s environment.
The political drama over grocery stores was riveting in the thirties and forties. One can hardly imagine Barack Obama and this Congress spending hours poring over ways to change the food retailing system while managing a recession and several wars. But that’s what Franklin Roosevelt and his Congresses did. Laws that ultimately limited the profit of retailers, like Robinson-Patman, were a direct result of the practices of A&P and the pressures that independent merchants brought to bear on Congress.
Though they despised lobbying and politicking, the Hartfords finally became engaged when the prospect of an outrageous store-by-store tax threatened to break up A&P. They hired a lobbyist named Carl Byoir. I love reading about old-time lobbyists, and one for the grocery industry? Well, that’s a bonus. Byoir worked wonders, and through some old-fashioned greasing of the skids and a highly suspect loan to the son of Franklin Roosevelt, the chain store tax went away. An antitrust charge investigation ended with the conviction of the Hartfords, and reading about will make an antitrust lawyer reach for the bourbon. The case was flimsy at best, and a honest assessment of the marketplace showed no monopoly. The government played politics (shocking) and though the Hartfords suffered significant reputation damage along the way, ultimately the A&P PR machine held strong and the case fizzed. A&P was out of the woods.
Except they weren’t. And here’s the most fascinating part of this book. Decades of campaigns against the company’s practices ended up only grazing the tough, leathery hide of A&P. Sure, Robinson-Patman limited A&Ps (and the entire industry’s) profitability margins, and the company remained under scrutiny for their every move, but even in 1951, they were still the nation’s largest and most successful retailer. According to Levinson, they “accounted for 12% of all grocery sales” and operated in 48 states. The Hartfords were smart businessmen, steering the company through several transitions that would have been missed by other less astute leaders. But when the Hartford brothers died, the company began a freefall. Conservatism, failure to develop new leaders, and a belief that the company knew more than the customer kept the business from changing to meet new customer preferences. They completely missed the growth in California. They let prices and margins rise, something the Hartfords would have never done. And bad real estate decisions left the company in a precarious fiscal position. The company was mired in the inevitable family drama created by the transfer of wealth to the next generation. By the late 70s, A&P was really an afterthought in the industry. Ultimately, the company had a meteoric rise and a similar fall. But it wasn’t protectionist Congressmen or small retailers who won. It was A&P who lost.
There are obvious reasons I enjoyed this book. I work in the grocery industry, in politics, I enjoy history, and I’m a giant nerd. Even if you don’t meet any of those criteria, I’d still recommend this. There are some good lessons here about the importance of focusing on the customer, about how business and government are, and forever will be, intertwined, and about the mood of our Country in the pre-WWII days. If nothing else, you’ll have plenty of inane trivia to share with your friends on your next trip to the grocery store.
Thanks for reading.