Lifestyle

The Ode: The A&P (1859 – 2010)

It began as a mail–order spice business, and grew into the largest grocery chain in America. But an ill–timed acquisition drove it into bankruptcy.

The Great Atlantic & Pacific Tea Co. George Huntington Hartford and George Gilman in New York City in 1859. Initially conceived as a mail-order spice business, the company (known then as the Great American Tea Co.) sought to offer discount prices by buying straight off the ship. The concept soon generated enough interest to open a dry goods shop on Manhattan’s Vesey Street. Painted a brilliant red, the store boasted a live band on Saturday nights, and attracted customers with a branded wagon drawn by eight grey horses.

A&P grew quickly. After expanding along the eastern seaboard, the company got a foothold in the heartland, and by 1881 became the first grocery chain to reach 100 stores. Meantime, it explored other pioneering efforts, including a customer loyalty program, branded products and, most notably, the “no frills” grocery store. Opened as an experiment in 1912 near the company’s most profitable location in Jersey City, N.J., the first A&P economy store was operated by a single man, who moved big volumes at warehouse prices. Within six months, the verdict was in: the economy store had put the traditional shop out of business.

Hartford’s sons, who inherited the company in 1915 (Gilman retired in 1878), soon found themselves at the helm of a grocery empire. By 1925, the company had nearly 14,000 stores and annual sales of $437 million. A&P, which expanded to Canada in 1927, reorganized into five divisions but kept a close eye on the books, allowing it to come through the crash of 1929 unscathed. Its size, however, soon proved a liability. Antitrust laws hiked taxes, limited competitive pricing and prompted numerous court battles.

Still, A&P continued its climb. By 1950, its iconic supermarkets could be found in 3,100 U.S. cities. “To foreigners, A&P’s vast supermarkets are among the wonders of the age,” observed Time. “To the U.S. middle class, they are one of the direct roads to solvency. ‘Going to the A&P’ is almost an American tribal rite.” Its quintessential place in the dominant culture of the day was cemented in John Updike’s 1961 short story “A&P.” Told from the perspective of a young cashier, it explores his rejection of mainstream ideals, epitomized by his description of “sheep” pushing their carts through the aisles.

But A&P struggled against competition from suburban supermarkets and demand for national brands. After withdrawing from California in the late 1960s, it underwent management changes and restructuring, which shrank the number of stores to 1,572 by the end of the 1970s. Following a brief return to growth, the losses resumed, and in 1979, the Hartford Foundation, which had held a majority stake since the company went public in 1957, sold to West Germany-based Tengelmann Group.

By 1982, it looked as if A&P was making a comeback. After pursuing acquisitions from rival chains (its banner would grow to include such names as Super Fresh and Dominion) and consolidating existing stores, the company was profitable again. Though sales suffered during the recession in the early 1990s, the company launched new corporate brands, including Master Choice. In 1995, A&P Canada opened the first Food Basics.

But competition from big-box retailers like Walmart and Costco took its toll. A&P shuttered stores and pulled out of key markets, and in 2005, it sold A&P Canada to Metro Inc. The trouble worsened after 2007, when it acquired Pathmark Stores with a $1.4-billion financing package, just as the economy went into free fall. In the end, A&P’s debt was too much to bear. In December, the company filed for Chapter 11 bankruptcy protection. The once mighty chain had fewer than 400 stores under its banner.