Customer Reviews

The Great A&P and the Struggle for Small Business in America

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1 star:		(1)

 

 

"The Great A & P" drew me in for several reasons. It brings back nostalgia. As a child I made many visits to A & P in "Shop City" in East St. Louis. This book gave me the chance to learn the story behind the grocery, the Nancy Anne Bakery goods, the Eight O'Clock Coffee and other products that I saw so often. It brings something for the Trivia enthusiast. Now, when we are urged to buy cloth bags to the grocer, did you ever wonder when and why grocers started using paper bags? According to this book, it was because the cotton for cotton bags became unavailable during the Civil War. As a history buff I found the social and political history aspects intriguing. The narratives concerning the shift from full service to self service stores reminds me of my mother's story about having to wait at a store in Belleville while the clerk served adults and how her grandmother took her back and gave the clerk a tongue lashing about the disrespect shown to her representative. As a student of business I found the case study of how A & P became the world's largest retailer and then fell to having only a regional presence and the attempts to legislatively suppress chain stores to be very interesting. The sections dealing with anti-trust prosecutions provided a brief refresher course on topics I had not considered much since law school.

The story of A & P is a great one. Founded as a tea importer it gradually grew and morphed into a chain of grocery stores, manufacturing businesses, food wholesalers and, eventually, supermarkets. As in any business, management had to decide what to offer the customers: credit and delivery or neither, but low prices. It had to challenge a myriad of small businessmen, including the fathers of Richard Nixon and Lady Bird Johnson, for the right to provide food to the nation.

The A & P story is not one of straight line development. Along its route it had to fight off attempts to run it out of business by applying taxes that grew with each store a business had in a state. These fights were fought in most states and in Congress, where its foe was the long-time power, Rep. Wright Patman of Texas. As difficult as it is to believe now, government policy during the Depression was focused on keeping prices up and protecting small, inefficient business against competition from larger enterprises to whom the customers would turn if given an uncoerced choice. The NRA and other New Deal programs required all members of an industry to adhere to the price schedule established by the industry codes. This was a handicap for low cost retailers, like A & P, that lost the advantage that had made them attractive.

After surviving political attacks and the disruptions of World War II, A & P failed to negotiate the seas of prosperity. The deaths of its long time leaders, brothers John and George Hartford, left it with a management devoid of the vision needed to lead it into the new world of mass marketers and suburbia. While others seized the opportunities and grew, A & P descended into a period of decline that extirpated its familiar logo from most of the country.

As fascinating as the story is, it requires a good teller to hold the readers' interest. It has that in Marc Levinson. The book moves on from topic to topic in an uninterrupted flow. It can report on an anti-trust trial, bills submitted to restrict chain stores and competitive price wars without ever becoming bogged down in statistics or details. He confirmed the thoughts that I developed while reading the book, that the things that were said about A & P in the last century are being said by Walmart today. Whether your interests are nostalgia, trivia, history, business, economics, politics or just a good read, this is a book for you.

This book interested me because I remember when the local A&P was "my" childhood grocery store. I never knew where it came from or why it disappeared. This book

reveals the inside story (as much as it can be traced since the company was fanatically secretive) from its murky origins before the Civil War, the development of its corporate culture as a company that wanted to sell the largest possible volume of groceries, and the failure of its leadership after the family that ran it for nearly a century was no longer in charge. After successfully reinventing itself four times and fighting off state and federal government's attempts to

destroy it, lack of innovation killed it off.

I had no idea it was the largest retail sales company in the world for so long, until it was surpassed by Sears in the 60s. But there was something about the place that seized the imagination when I was a child, much like Howard Johnson's.

The color scheme, the homeyness, the cleanliness were all fascinating.

The book also opens up the development of American commercial history for the last

century and a half, and the struggle between small, personal, local and VERY inefficient) businesses with larger chain stores. There were hundreds of thousands of tiny "Mom and Pop" grocery stores on every corner, each selling very few goods, in bulk, with no perishable meats or produce. There were also thousands of local food processors, wholesalers, etc., so that

food was expensive, and nutritious food was not easily available. A&P seems to have had a mission to drive down food costs to drive up their volume. It also created modern American agribusiness and food ways.

The author definitely seems to find the A&P very sympathetic and those who tried to control or destroy it to be misguided and irrational.

If you want to understand Walmart, you need to understand A&P.

I suppose one could gather from the title that this isn't a history of A&P to the present day. Even though the company is still officially the Great Atlantic and Pacific Tea Company and even though there is still a struggle for small business in America, this is really about the A&P's heyday, during which it was accused of trampling Main Street, much as WalMart is accused of doing today. It's a fascinating story and one that is not often told these days. (There is nothing new under the sun.) But it might have been instructive to hear more about A&P's downfall. This narrative essentially ends in the 1960s, when its downfall was underway, but we don't hear much about its retreat back to New England and its eventual bankruptcy, from which, as of this writing, it has yet to emerge.

Again: fascinating and recommended, but leaves you wanting more.

I can still remember going grocery shopping with my parents at the local A&P. This was in the late 60's and early 70's, and I can still smell the familiar aroma of fresh produce and 8 o'clock coffee as the automatic doors (a novelty) swung open. There were larger grocery stores opening in the area, but that would have meant a much longer drive (maybe a mile), so my parents stuck with the local A&P.

Because the store was smaller than some of its competitors, I have never really appreciated the size of the A&P chain. However, as Marc Levinson points out, they were easily the WalMart of their day. Much like the Arkansas behemoth today, in the middle part of the 20th century, the A&P chain was every bit as feared by small business owners who couldn't compete with the A&P on size, logistics, bargaining power with suppliers and marketing muscle. Many congressmen took on the A&P to limit its size and scope.

Levinson details the history of the A&P, from its start selling tea to its rise and fall as America's predominant grocer. While involved in some slightly questionable marketing in its early days, for the most part the chain was run above the law and as a fair and conscientious employer. Even when politicians, pandering to the "small businessman' nearly legislated the firm out of existence, A&P initally employed few lobbyists and spent little time worrying about politicians. When it was finally awakened, A&P learned to play the politics game as well as anyone.

Therein lies the problem. The A&P was a well-managed, law-abiding corporation that wanted to compete based on its business and logistics acumen. Even worse, it was, for the most part, run by a group of the world's most boring super-rich moguls. No super-models, no secret rendezvous on the French Riviera- a divorce or two was about it. While all of this makes for an excellent business history, it does not create a page-turning best-seller.

Levinson is further hampered by the secretive nature of the A&P's founders and owners. While there is some company folklore, the day to day history of the company seems to have been only in the memories of the founders, and never written down for posterity. In fact much of the book is more a political history of the plight of the small businessmen in the US rather than the nitty-gritty details of the A&P.

So in the end, we have the tale of the A&P, its rise and fall as one of the greatest American retailers in history. The characters involved are rather boring and mundane, and much of the story is simply not available. All that being said, the book is still very readable, and an interesting look at the rise of retail groceries in the US. For fans of true business histories, the ability of A&P management to consistently re-invent their store and turn their strategy inside out is amazing. The manner in which work was divided among the senior executives and the focus on measurement and business fundamentals is as good as any HBR case study. The speed at which A&P fell apart after the death of its founders is a tribute to the power of a few good managers in any enterprise.

The text flows well and I ended up reading the book in three or four sessions. The facts are about as well researched as they could be, given the nature of the company. Parts of the book can be a bit tough to follow, just because all the major characters seem to be named George.

If you are looking for a Harold Robbins corporate tell-all scandal-laced book, this isn't your cup of tea. It is, however an excellent history of American grocery retailing, and the rise and fall of the Great Atlantic and Pacific Tea Company in that environment.

For 43 years, A & P was the largest company in the world.

That statement alone needs much more texts about this company than there are. But we have Levinson's work now and as a student of business history I have to report that it is very good. While what happens in the last years of it's life, after the founders are gone and the generation of non-family owners takes over is not delved into greatly, the rest of the tale is very well presented so that we not only see how A&P grows but also how America grows and how the two are part and parcel of each other.

A company started before the Civil War to sell tea in New York, grows to be the world's largest company for many years. The founder passes the baton to the Hartfords who grow the company into a national chain and fully explore the meaning of what a chain is.

While doing so, the company goes from defining what the local grocery store should be to what a chain and what vertical integration should be. Creating what becomes S&H or Green stamps and grocery stores. A&P has a vibrant place in history and Levinson tells a great deal about it.

Along the way we see how the ill run mom and pop grocery store (My grandparents had one run well enough to become a great profit center during the second world war) is revamped and gives rise to their success. The A&P doing so well to squeeze margin that they are the Walmart of their day and the government must come and regulate them in order to save the mom and pops. So many years of litigation that it becomes part and parcel of the american life as does the supermarket with the rise of the automobile. And with the success of the tactics that the A&P employs or invents.

Having read many business histories, while I may never read this one again, I am glad I had a chance to read this one. There are lessons here for management, and life, and a guide to thinking about how business and government need to find a better way to partner with each other. Well worth your time and written well enough that it is more of a story, then ever a text book.

Marc Levinson's "The Great A&P and the Struggle for Small Business in America" is a good, balanced look at the business practices and political struggle of how a fairly major player in American economic history rose to prominence. Unfortunately, it largely passes on taking a look at the decline phase of the business, and as such is incomplete. 1 star off for the dearth of work on the latter leaves this at a very solid 4 stars.

The A&P was (and still is to those of a certain age) the preeminent supermarket and retailer of its day. To put it in perspective, in 1929 A&P had over double the sales of its nearest retail competitor, Sears Roebuck, roughly triple the sales of its nearest grocery store competitor, Kroger, and roughly the same sales as the #2, #3, and #4 retailers in the country - combined. Think Apple if it combined with ExxonMobil and you might start getting an idea of the range of this company in its prime.

Levinson does a magnificent job of detailing is just how A&P got to that point. Growing market share through discounting was something that didn't make it a lot of friends among the existing small businesses that found their margins clobbered. His detailing of the both the massive willpower that it took for the company's leaders to keep the business focused on low gross margins but higher revenue as well as the political price they paid for it is very well done.

Eventually, the government decided to get in the way - and when it does so for any business, they'll face problems. What's more remarkable was A&P's ability to keep thriving despite the Robinson-Patman Act, even though their net margin never exceeded more than 2% after 1935 (when it had never been below it before 1935). Levinson does great work in keeping this readable for readers without a ton of business education, at a level below that of a case study but well above most journalistic pieces.

Unfortunately, what Levinson does not do well is to document the decline of the company. Following John Hartford's death in 1951, the death of their anointed successor prior to that, and then the naming of Hartford's assistant as CEO - who was probably better off in the background - A&P made a series of terrible business decisions. However, Levinson details 20 years of decline and fall in a tiny 15 pages and in a manner that really won't help those looking to learn from the fall. A much more careful examination of how A&P lost its position would have made this a far better book for those trying to apply A&P to today's business environment.

Still, one of the better business books of the year. 4 stars.

Dedicated students of marketing will find much to admire in this well written and meticulously researched history of the retail giant's rise and fall.

Note that I said "dedicated students of marketing," however. Others -- including students of marketing with ADD -- will probably find this detailed account pretty slow going after the first hundred pages or so, and indeed I doubt I would have finished the book if I hadn't agreed to review it for the Amazon Vine program.

It seems that Walmart wasn't the first retail giant to be accused of crushing local stores. A&P faced just such accusations in the early and mid twentieth century. Eventually the federal government faced off against the store chain in court, accusing it not of selling products at too high a price, but too low.

And indeed this book raises the question, what benefits a nation more: efficiencies of scale and volume pricing brought about by large national or international retail establishments, or higher prices and more employment opportunities at smaller local stores.

As an advertising copywriter, I was interested to learn how far back some of the basics of my trade extend, and this book reminds readers of the power of print advertising, shopper premiums, and special promotions.

Practitioners of public relations will also see how the founders of A&P, John and George Hartford, reluctantly but successfully turned to their trade to turn the tide of public opinion in the battle with federal and state legislators.

Finally this book again testifies to the power of strong and enlightened leadership. A&P folded like a house of cards within a decade after the Hartford brothers retired from the business. Unfortunately it seems that the duo's attention to detail didn't extend to nurturing equally vital successors within the company, a fate which seems likely to befall Apple today now that Steve Jobs has stepped down.

Though few would call this book a real page-turner, retailers and executives and entrepreneurs building companies will find much good "food for thought" here.

This is quite simply the story of how the Atlantic and Pacific Tea Company went from being a bold idea to a supermarket chain...well, not quite. Rather, the story is not a simple one and it is not "simply" the story of that. It is the story of how the mechanics of how Americans get our food has changed, how our philosophy of government regulation in markets has changed, and how the American business and social landscape has changed.

In the late 1800's, markets were a big industry; average families spent about three times as much on groceries as on shelter. Stores were about the size of a one car garage, and customers ordered their items at counters, and the clerk would gather those items (none of them branded) together for her. And tea and coffee were big import industries, which is where George Francis Gilman got the idea for the Atlantic and Pacific Tea Company, and hit upon the idea that paying more for marketing payed off in the long run. It did, and he expanded, until eventually, the store began selling groceries.

The business was passed to George Hartford (who had worked with Gilman). He, and his two sons George and John, turned this company into an expanding chain across many states. They used vertical integration to create separate companies that made products for A&P, bought more stores, used their size to get better deals from wholesalers, and used their large inventories to turn profits.

Pretty soon the smaller "mom and pop" stores ("mom and pop" being very literal at the time) toward taking down this threat, and the government stepped in. Via anti-trust policies of the 1920's and 1930's, A&P was charged with such things as price discrimination, unfairly bullying suppliers, vertical integration in supposedly monopolistic ways, an selling below cost. Senators and Attorneys General attempted to pass laws, launch investigations, and brandish lawsuits against A&P, most of which were unsuccessful until the 1940's. From there, A&P was under a microscope, the government regulations and fines making it costlier and costlier to do business until...A&P was no longer the top dog.

But I don't do the book justice. For a book about business - or primarily about business - this is a pretty exciting one. As another reviewer says, it is not a light read, but it doesn't read like a dissertation either. If you have a very basic understanding of economics, you should be fine reading it, and will probably enjoy reading about how A&P kept leading the way in innovation, keeping costs down, keeping employees relatively happy, and keeping the government off its back.

While the author seems to be quite balanced, if you are anything close to a market libertarian or conservative, this book will provide a really interesting context to witness the inanity of (at least some) government interventions in action. Particularly, it makes me think of public choice theory, and its insight that "rent seeking societies" (societies where businesses spend money and energy lobbying the government who can either help or hurt them, depending on their mood) are just wasteful. A&P got through a good deal of its career devoting all of its energy to selling their products, until the 1930's, where they hired a PR consultant, lawyers, etc. They had to, owing to the climate of regulation, and even then, lost in the end. Also, some of the government charges against A&P (authors word) were, at best, "fuzzy": charging A&P with monopolizing an industry where their business constituted 12% of the market, charging them with keeping prices high AT THE SAME TIME it was government policy to keep prices high in other industries; suggesting that vertical integration, which was around for decades, was monopolistic?

Oh well. As you can see, this book really is not "simply" the story of a supermarket chain. It is really a good way to tell the larger history of American commerce, the changing nature of American politics, AND the simple story of A&P.

I picked up this book thinking that it would be interesting, but I had no idea just *how* interesting it would be! I have always been one of those Wal-Mart haters who thinks that Wal-Mart is killing small businesses, but I was amazed at how much I supported the Hartford Brothers. Same arguments, 80 years earlier. This book is part social history (the history of food, shopping, the rise of convenience stores and department stores, etc), part business (green stamps as marketing gimmick, the creative genius behind A&P's PR blitz), part legislative (how a bill gets killed despite someone fanatical with something to prove trying desperately to keep it going), and part biography (the family that started the A&P stores). Oh, and there's some TMZ-worthy gossip thrown in midway through.

Seriously, I loved it. If you've ever stopped to think about where your food has come from, if you ever stop to think about chain stores, if you ever weigh the benefits of cheap food with the costs associated with them - ie losing touch with where the food comes form - and if you like history and a good story, then you should read this book!

I admire this book. It's a powerful recitation of the history of 20th century American business (especially retail), and its inevitable intersection with political and cultural trends.

This book is comprehensive. For some readers this will be a positive. Marc Levinson's work is self-contained. The narrative requires that he provide extensive historical information on business as well as politics, and that he do so with a keen understanding of management. You will learn about Wright Patman and Franklin Roosevelt and their era, as well as about the Hartfords who constructed the modern chain-store, super-market.

To be sure, a few readers may find the comprehensiveness of the book to be a mixed blessing. I don't share that view, but prospective readers are best served knowing what they're getting into. It might be a bit of slog for such readers, as indicated in some of the Amazon.com reviews.

At least one Amazon.com reviewer lamented the absence of photographs. The galleys s/he is reading, like mine, don't include photos. However, the published edition of the book is scheduled, according to the publisher, to have sixteen pages of black-and-white photographs. That will add a lot, illuminating the many out-sized personalities of this story.

There are likely some people who will ask: 'Why should we study the history of business and politics of a bygone era?' To which I would respond that there's simply no way to comprehend contemporary business without a sense of the history. Wal-Mart resembles in many ways the ubiquitous A & P chain of an earlier time. So too, other companies have similarities. The management issues that ultimately decided the success and failure of A & P are as fresh today--and tomorrow--as in the last century.

Perhaps most important and relevant, Levinson's conclusion, 'The Legacy,' is a tour-de-force, a meditation on capitalism and business. Whether you agree or not with every one of Levinson's points, you will be challenged to think anew.

I recommend this book highly.