The Neatest Little Paper Ever Read ®

Issue 974

A&P GROCERY STORES

• George Gilman, born in Maine in 1826, ran a profitable tea company in the 1860s, when tea was one of the most profitable items a grocer could sell. When the first transcontinental railroad linked America’s East Coast to the West Coast in 1869, Gilman took advantage of the new mode of transportation by starting the Great Atlantic & Pacific Tea Company, distributing tea to merchants from coast to coast.

• It was Gilman’s gift for marketing that led him to package his tea in recognizable form, creating a name, a package, and a brand in the days when grocers simply weighed out goods and wrapped them in paper. Gilman’s tea was called “Thea-Nectar” and was the first tea that people could ask for by name.

• He then began offering premiums that could be redeemed, first for lithographs of famous events, and then for other household items.

• When the Great Chicago Fire levelled much of the city in 1871, Gilman rushed to set up a new tea store there, shipping in wagonloads of tea in an area that had been stripped of all of its stores.

• In 1878, Gilman turned management of the entire company over to George Hartman. Hartman had started working for Gilman as a clerk, then learned bookkeeping and cashiering before becoming manager of the firm. By the 1880s, Hartman had 150 tea outlets across the eastern U.S.

• When Congress levied a tariff on tea to raise funds, profitability of tea dropped. Hartman’s sons convinced him to add other items to their tea shops, including baking powder, sugar, condensed milk, spices, and butter – all packaged in Atlantic & Pacific wrappings.

• In 1901, Gilman died without leaving a will, and his numerous heirs filed suit. Hartman declared that Gilman had given him half of the company in a verbal agreement in 1878, and provided accounting that backed up his claim. The Gilman heirs realized the company would falter without Hartman at the helm. The company was incorporated with the Gilman family receiving shares, while Hartman maintained control. In 1908, Hartman turned management over to his sons.

• In 1912, they started opening grocery stores instead of tea stores and the company name was shortened to A&P. By the 1920s, there were 1,600 A&P outlets.

• Each store was only the size of a typical corner grocery store, yet they were putting other corner grocery stores out of business due to their buying power and their innovative use of branded packaging, so that shoppers at A&P stores were purchasing A&P branded products that were manufactured in A&P plants. By 1930, there were 16,000 A&P stores, and A&P was twice as large as the next largest retailer, Sears. From 1915 through 1975, A&P was the largest grocery retailer in the U.S. Until 1965, it was the largest U.S. retailer of any kind.

• The fall of the chain began in the 1950s when it failed to adopt newer methods being used by more modern stores. Profits were handed over to stockholders rather than used to improve stores. The 2008 recession hit hard, and by then A&P was competing with Walmart. It fell from the top grocery retailer in 1975 to the 28th largest retailer. Many stores were closed or sold, and the chain contracted to serve only the northeastern U.S. A&P declared bankruptcy and closed its doors for good in 2015. Still, it was A&P who shaped the modern supermarket.