A & P Attacked

A pensive grocer sat, his chin snuggled in his palm, at the rear of the Cincinnati convention hall where this past week the American Wholesale Grocers' Association was holding its yearly meeting. Before him on the convention floor wholesalers rose in diverse and unpredictable fashion to explode with the troubles of their business. On the platform President J. H. McLaurin of the association stormed at his constituents. They must fight together to preserve themselves, he cried; they must support the individual store keeper; they must oppose the chain store.

The Great Atlantic & Pacific Tea Co. of America was the particular butt of his displeasure, because, with its 15,536 stores in the U. S. and Canada, it is the largest chain organization in the world. Last week it published the profits of its fiscal (business) year, which ended Feb. 29. Those profits were $18,411,119.

President McLaurin's method of attacking the A. & P. organization was the subtle way of innuendo. Said he: "It would not be accurate to state that the Atlantic & Pacific represents at this time a monopolistic control of retail food distribution, but we do undertake to express our opinion that the organization as now conducted, possesses the potentiality of a control of retail food distribution to such an extent as to threaten the best interests of the American public. Is Federal control of that organization in prospect? Will the conduct of chain stores generally be such within the next few years as to bring about such a degree of 'cooperation' and 'understanding' among the largest ones as to attract the eye and attention of the Department of Justice?"

This roundabout suggestion of Federal investigation followed the positive demand made in Manhattan last week by the executive committee of the National Association of Retail Meat Dealers that the Federal Trade Commission study the business methods of all chain store organizations. The butchers accuse the chain stores of misleading advertisements, false bargain sales, short weights and price cutting.*

Although there is nothing overt to indicate that these two almost simultaneous attacks against chain food stores were planned jointly or with premeditation, their coincidence means that food distributers are developing an aggressive defense against the expansion of chain store business. Such tactics may indeed stir food chains to merge. At present they number about 800 (with 60,000 stores competing with about 300,000 independent retail stores). Hitherto chain stores have been highly individualistic, each system spreading out like strawberry vines from a parent plant. Nor have they, except for the Kroger grocery stores and the J. C. Penney dry goods stores, done much to soften public opinion excited against them by the neighborhood store keepers. Kroger's and Penney's this year have set afoot large campaigns of "institutional" advertising, praising the service of the chains and attempting to "humanize" them. Penney's, especially, is utilizing the personality of James Cash Penney, its founder. Other chains, on the other hand, keep up the policy of vending food impersonally.

A fantastic story about the company is that the Rockefellers own the A. & P. stores. That is false. They do not, nor have they ever. The A. & P. stores are owned by two sons of the man who founded them, the late George Huntington Hartford.

George Huntington Hartford, a "down-easter" born at Augusta, Me., went to Manhattan before the Civil War and there operated a modest hide and leather business from his store on Vesey street. A neighboring store keeper, one Gilman from Bridgeport, Conn., was in the spice and tea business, and in 1859 the first Hartford went to work for Gilman as store manager. Gilman soon withdrew from the business. He had a peculiarity that doubtless was most trying to Hartford. He feared death so terribly that he would endure near him no mirrors in which he might note the shriveling of his features, no clocks which clicked their hurrying seconds against his ears.

Under Hartford's management the spice and tea business prospered and in 1864 he organized it as the Great American Tea Co. The idea of neighborhood stores came to him. Promptly he opened such stores in scattered parts of New York and Brooklyn and by the end of the Civil War he had several doing well.

In 1869 the late James Jerome Hill drove the last spike into the ties of the Northern Pacific railroad and the Atlantic coast became tied thereby to the Pacific coast by steel rails. It was a dramatic event, which kept the entire country talking. Hartford capitalized the "news" interest by renaming his company the Great Atlantic & Pacific Tea Co. In 1912 telephones were taken out of A. & P. stores. Credit and delivery privileges were no longer granted customers. These changes brought an increase in business of 65%. Three years ago the company was reincorporated as the Great Atlantic & Pacific Tea Co. of America.

The original Hartford died in 1917. Two of his three sons carried on the business; George is Chairman, John is President.* They are unique: although they are heads of a mammoth nation-wide company dealing in vital commodities, they are permitted to lead a life of almost absolute seclusion from the public. Thus a minimum of publicity ensued from a romantic interlude in which President John Hartford was divorced from his wife, married his wife's modiste, remarried his first wife, as a result of which the modiste-wife told great tales of living at the rate of $225,000 per year. Had such colorful news been connected with the president of almost any other equally large corporation in the U. S., it would have become a front-page serial with installments whenever and wherever President Hartford moved. The Hartford uniqueness arises from the fact that, unlike most giant steel, motors, tobacco or food-selling corporations, the Great Atlantic and Pacific Tea Company has practically no stock in the hands of investment houses or "the public." Hartfords and associates own it. Therefore the history, the opinions, the nature of its chief officers are not "public matters."

Both Chairman, 62, and President, 54, come regularly to work in Manhattan; the former from Montclair, N. J.; the latter from a vast estate at Valhalla (Westchester county, N. Y.). President Hartford's Valhalla is no meeting place of brawny heroes or great and faithful warriors; it is a place of shadowy woods, where a man may be alone with dog and horse.

For each day of Holy Week the F. W. Woolworth stores averaged almost a $1,000,000 business. During Easter Eve clerks sold $2,408,555 worth of goods; during the whole week $6,977,268. These were records.

Records also were sales made by the great chain store systems during the first three months of 1928. The tally:

Woolworth . . . . . . . . . . . . $57,945,794

Kroger Grocery . . . . . . . . . . . . 44,220,000

Penney . . . . . . . . . . . . 29,774,544

Kresge . . . . . . . . . . . . 28,832,221

Safeway . . . . . . . . . . . . 22,699,377

National Tea . . . . . . . . . . . . 20,044,400

Kress . . . . . . . . . . . . 12,565,271

Grant . . . . . . . . . . . . 9,173,197

McCrory . . . . . . . . . . . . 8,419,325

Childs . . . . . . . . . . . . *6,819,922

Sanitary Groc . . . . . . . . . . . . 5,431,560

Bird Grocery . . . . . . . . . . . . 4,395,643

Melville Shoe . . . . . . . . . . . . . 4,265,369

Thompson . . . . . . . . . . . . 3,644,550

Piggly-Wiggly . . . . . . . . . . . . 3,519,020

Jewel Tea . . . . . . . . . . . . 3,458,360

Kinney . . . . . . . . . . . . 3,400,877

D. Pender Groc . . . . . . . . . . . . 3,318,895

Am. Dept. Stores . . . . . . . . . . . . 3,023,554

Newberry . . . . . . . . . . . . 3,022,776

Grand . . . . . . . . . . . . 2,829,521

Metropolitan . . . . . . . . . . . . 2,356,526

People's Drug . . . . . . . . . . . . 2,254,368

McLellan . . . . . . . . . . . . 2,192,283

Murphy . . . . . . . . . . . . 2,058,799

Loft . . . . . . . . . . . . *666,903

Neisner . . . . . . . . . . . . 1,492,812

Silver . . . . . . . . . . . . 1,180,365

Schiff . . . . . . . . . . . . 855,830

Fanny Farmer . . . . . . . . . . . . 832,279

Davega . . . . . . . . . . . . 751,780

Kinnear . . . . . . . . . . . . 620,214

Berland Shoe . . . . . . . . . . . . 493,868

Total . . . . . . . . . . . . $297,560,203

Great Atlantic & Pacific Tea Co. of America's quarterly business is not listed because its fiscal year ends with February, not with December as do the fiscal years of the others (see above).

*During the last 18 months more and more (now about 100) A. & P. stores have opened fresh meat departments. They are perhaps Armour & Co.'s greatest customers. On that account when a group of Chicago and Manhattan bankers and brokers a fortnight ago bought 1,000,000 Armour & Co. shares, Wall Street gossip said that A. & P. would get the shares. This was denied.

Kroger Grocery & Baking Co., which long has sold fresh meats, last week bought the 73 outlets of the Hoosier Grocery Stores, in and around Ft. Wayne, Ind. Kroger now has over 3,800 stores.

* Edward, the third son, who died in 1922, founded the Hartford Shock Absorber Company, recently inactive.

* Slightly less than sales of the same period of 1927.