Chain Stores

America's great "chain" stores of the early twentieth century: "In the late nineteenth century, the railroad and the telegraph had created new kinds of distributors, including mail-order companies like Sears, Roebuck. In the early twentieth century, technology-driven commercial change produced dramatic innovations in how goods were bought and sold. "One innovation was self-service. In 1916, Clarence Saunders of Mem­phis, Tennessee, founded a chain of innovative grocery stores in which customers, instead of asking clerks for items kept behind the counter, would use baskets to pick up items marked with prices from the shelves directly. By reducing staff costs, the Piggly Wiggly chain allowed savings to be passed on to customers. "Another innovation was the department store. Some, including Macy's and Bloomingdale's in New York, began as small retail shops that grew, while others, such as Marshall Field and Company in Chicago, were the retail branches of companies that did most of their business in wholesale. "Then there were the chain, stores. The greatest of these was A&P, founded by George F. Gilman as the Great American Tea Company. With his partner George Hartford, Gilman had established more than a hundred stores by 1880. The name was later changed to the Great Atlan­tic and Pacific Tea Company. Expanding into groceries, A&P created the 'economy store,' with no home delivery, in 1913. Following Gilman's retirement, George and John Hartford took over. By 1929, A&P had fifteen thousand stores and made more money than Sears, Montgomery Ward, and J.C. Penney combined.

A&P Atlantic & Pacific Tea Company 1929 Vintage Grocery Store Ad, Pumpkin

"The first 'dime store,' in which nothing cost more than a dime --­ which went considerably further in those days, to be sure -- was estab­lished by Frank W. Woolworth in Lancaster, Pennsylvania, in 1879. Woolworth's grew into another national chain. "The older mail-order businesses that survived were forced to adapt to the new world of car-based suburbs that was appearing even before World War II. Robert Wood Johnson, a former army general who worked for Montgomery Ward, argued that urbanization meant that the company should shift its focus from mail-order catalogs to retail outlets. For his prescience he was fired by Montgomery Ward, but he was hired by Sears, Roebuck, which he persuaded to buy large areas of land on the outskirts of cities for stores and parking lots. "The enormous cash flows of mail-order stores, department stores, and chain stores made it unnecessary for them to raise large sums by issuing stock. Unlike in the large industrial companies of the time, control tended to remain in the hands of the founding families such as the Hartfords of A&P, the Woolworths, the Wanamakers, and the Gimbels. "Small-town distributors were threatened by the innovative national retailers. As the largest retailer in the United States, A&P drew hostility similar to that directed at Walmart nearly a century later. Representative Wright Patman of Texas, a Jeffersonian populist, sought to destroy it with the Robinson-Patman Act, which tried to prevent chains from getting lower prices from manufacturers in order to charge less to consumers. When Patman next tried to pass a law imposing a federal tax on chain stores, he failed. A&P successfully defended itself by allowing the union­ization of its workforce in 1938, thereby gaining organized labor as a con­stituency, and by skillfully wooing consumer groups and cooperatives."