Marc Levinson's book The Great A&P and the Struggle for Small Business in America is a fascinating case story of one of twentieth-century America's largest and most successful corporations. Levinson's manuscript not only illuminates an important company and the men who ran it, but also documents the dramatic changes that occurred in one of America's most significant yet academically neglected industries—retailing. The story at its core is one of creative destruction.
As Levinson notes, grocery retailing was a costly industry at the turn of the last century. “The average working-class family in the 1920s devoted one-third of its budget to groceries” (p. 8). This was often more than their rent or mortgage. The quality of this food would almost be unrecognizable today. Levinson remarks that “American households consumed a sorely inadequate daily intake of vitamins and minerals, because there was little of either in the food that their neighborhood shops had for sale” (p. 8). Those neighborhood shops were then as today known as the proverbial Mom-and-Pop establishment. This format of retailing was characterized by numerous establishments of small scale, staffed by unspecialized workers, inventorying a narrow product line. O. H. Cheney, a vice president of the Irving Trust Company, addressing a Conference on Retail Distribution in 1929 remarked, “What we need is mass distribution—that just as mass production has transformed manufacturing through efficiency, so can distribution be transformed.” (Daniel Bloomfield, Trends in Retail Distribution. New York: H. W. Wildon Company, 1930, p. 80). A&P was at the forefront of this transformation. While as Levinson documents, A&P did not invent most of the twentieth-century retail innovations such as self-service, the grocery cart, or cash and carry- the firm was instrumental in spreading these innovations to millions of Americans. Chapter 8, “The Chain Store Problem,” contains an excellent summary of the dominant Mom-and-Pop type distribution system that existed before A&P helped to revolutionize it. The result was a dramatically more efficient distribution system. Today, American households spend less than 13 percent of their budgets on food (including food away from home) (Consumer Expenditure Survey 2009).
The bulk of the book describes the history of the founding of A&P and its growth from a relatively small regional seller of teas and coffees into the nation's largest retailer. Levinson documents the four major revolutions that A&P lead the industry thru, beginning with the creation of the first grocery store chain in the 1890s, followed by the transformation of the grocery trade from a “haphazard enterprise” into a large-scale industrialized business, which lead to the vertical integration of the industry, and finally the move from small stories into the origins of today's super markets. But what makes the book and the broader story of American retailing particularly fascinating is that this industrialization was often not been met with the same praise as the industrialization of other industries like agriculture, manufacturing, or mining.
Perhaps the most interesting chapters of the book are those devoted to documenting how A&P's growth affected the consumer and existing Mom-and-Pop establishments and how these groups reacted to the proliferation of the company. Levinson describes in detail the tremendous backlash that the firm faced first from other small retailers, then from state legislatures' and eventually Congress's attempts at taxing the firm out of business, to finally the Justice Department's indictment and successful conviction on charges of abuse of monopoly power. Reading Chapter 11, “Minute Men and Tax Men,” one cannot help but think of the current “Occupy” movement and their concern over concentrated wealth. Anti-chain propaganda of the era explained the A&P's alleged desire to “get Springfield's money (a small town) and send it to the Home Office (New York City) (p. 116).” The contemporary charges leveled at Wal-Mart would also be very familiar to the executives of A&P in the 1930s. That A&P survived all these attacks including their conviction in U.S. v. New York Great Atlantic & Pacific Tea Co. is remarkable.
Despite the detailed accounting of the history of A&P, the book is not without deficiencies. The foremost is a general lack of an “economic” explanation for many of the events. There is no doubt A&P became a successful corporation that first revolutionized retailing and then came to dominate it; but why A&P? And why was the period between 1910 and 1940 such a revolutionary time. Levinson does recognize that some technological innovations such as the cardboard box, canned food, and the automobile were important in changing the industry. However, these are a relatively small part of his story. The important question of why the industry did not industrialize sooner is unanswered. Further, the reader is left with two specific questions about A&P itself. Why was A&P so able to dominate the industry and why did it so quickly fail in the 1960s? Levinson notes that the numerous government investigations left a detailed picture of how the Hartfords managed the business (p. 211). But few of those details are presented in the book. For example, how did A&P oversea a firm of over 15,000 establishments with the primitive communication and transportation technology of the 1920s? The author seems to place a great deal of the firm's success on the management skills of the two brothers, George and John Hartford. He similarly concludes that following their death, the firm lacked the leadership to continue to survive. It seems implausible that one of the largest corporations in the county which survived and lead four different periods of revolution and creative destruction should falter so quickly simply because the founders died. Despite these couple of deficits, the book is a fascinating read and makes an important contribution to the study of A&P itself as well as the broader retail industry.
