Mistakes Which Led to A&P's Demise

[Max]

While researching the history of various ShopRite locations, I was struck by the fact that the chain opened supermarkets almost 30,000 square feet in size during the 1960s. This is in stark contrast to the A&P Centennials which rarely were larger than 20,000 square feet. In the thread about A&P Centennial locations, I stated my belief that the Centennial prototype could have worked well with larger stores had the middle, triangular portion of the roof and the cupola & weathervane all been made proportionally bigger. Even the long Centennials that were built--such as the below Centennial in Hellertown, PA--looked quite nice:

https://www.google.com/maps/@40.5676172 ... ?entry=ttu

I do not know why A&P constructed such small locations relative to their competitors (at least prior to 1990 or so). Does anybody know why this was the case? The only reason I can think of is that A&P had high labor costs and wanted to keep those costs down by building small supermarkets.

Apart from store size, what other mistakes caused A&P's unfortunate demise? I can think of several others:

*John Hartford (who died in 1951) failing to groom a successor.

*Waiting until 1982 before closing its Horseheads, NY food manufacturing facility.

*Operating a tiny handful of locations in various geographic areas way longer than it should have (e.g., five stores in Maine that did not close until the 1990s).

*Being late to recognize the threat which ShopRite--and for a time, Pathmark--posed in its core NY/NJ market.

*The awful decision to acquire Pathmark. - In fact, I think that A&P would probably still be around today had the Pathmark acquisition not occurred.

*Choosing not to declare Chapter 11 bankruptcy until 2010. - IMO, a bankruptcy filing in the 1970s would have made it much easier for A&P to close stores and renegotiate labor contracts.

[pseudo3d]

If A&P hadn't acquired Pathmark, it probably would've just been a more attractive takeover candidate.

I think where A&P screwed up was in the point when they were acquiring other chains. Rather than build off the strengths and formats of its acquired chains, A&P immediately started to change things around. Both Kohl's Food Stores and Farmer Jack were completely destroyed within twenty years of A&P buying them, and unlike Safeway they had a poor reputation in their "home" markets.

Super Fresh appears to have gotten a new management style when the stores reopened with a new name but I'm not sure the other divisions were so lucky.

[rich]

A&P began transitioning to supermarkets at the right time (late 30s) and although the business press thought they didn't have enough suburban stores, they went into the 'burbs with everyone else. They stayed in city neighborhoods longer than other chains, though.

Once the Hartfords withdrew from active engagement, they were late to every trend in the business until the 70s: trading stamps, discounting, service departments, and expansion of departments like frozen foods. Their stores came to be filled with house brand items, which they used to try to carve out a low price image, but meant they were slow to add new things. They had a loyal base of customers in the Southeast, where few chains built bigger stores and in inner city neighborhoods, where they stayed longer than many competitors and updated their store base. Their packaged baked goods are fondly remembered but their produce was usually the worst (except maybe for Kroger) and their meat was just ok. Their stores were very uneven and that was true all the way to the end---some were spotless and well run, while others reliably had bugs in the produce and expired dairy. They began closing stores on a large scale in the 70s, but they came to be unevenly represented in many markets and probably should have exited them sooner. They were top-heavy with administration and because people in the stores stuck around they had a reputation for high labor costs---I suspect this was diluted by chains they bought and the real problem was the feather-bedding of management who were reputed for being an old boys network.

The chains that built big stores were the exception, not the rule. Most chains built 15-19K sf stores until the end of the 60s: Acme, First National, Colonial, Kroger, and soforth. Food Fair, Penn Fruit and Grand Union built larger stores beginning in the 50s, as did some regional chains like Fisher Foods in Cleveland. Other chains began building bigger stores a bit later like Jewel and Giant, which went big into larger stores in the 60s. Some chains like Safeway were more cautious about getting bigger---marinas on the east coast were usually about 22K sf. Publix and Winn-Dixie were building 19-22K sf stores long after everyone else was building bigger stores. Some chains got bigger because that was what their major competitors did, like National Tea, which did it very defensively. Kroger built large stores at what was probably the last possible minute---they had already exited Chicago and their market share was in steep decline in many of their more northerly markets.

A&P bought some very good, market leading chains and ran them into the ground by not understanding what worked in their markets: Farmer Jack, Kohl's, Waldbaum/Food Mart. Waldbaum's was strong in perimeter areas and Farmer Jack's emphasized price, A&P was not strong in other direction even as they modernized in the 70s onward. they also did things like buy most of National Tea's stores in Chicago, which had been largely upgraded in ways they were only starting to understand---most of those went to independents. They remained in the NYC area long after they had exited anywhere else with the A&P name---they may have been uncompetitive with ShopRite, but they outlasted Grand Union and Acme's first entry into the area held onto a bigger footprint than First National. An understanding of the complicated logistics and marketing for the area was probably baked into HQ and by converting the the Manhattan stores to Food Emporium (another acquisition) they had found a format that enabled them to stay in the city until Whole Foods basically forced them to close those stores.

[Steve Landry]

A&P began transitioning to supermarkets at the right time (late 30s) and although the business press thought they didn't have enough suburban stores, they went into the 'burbs with everyone else. They stayed in city neighborhoods longer than other chains, though.

Once the Hartfords withdrew from active engagement, they were late to every trend in the business until the 70s: trading stamps, discounting, service departments, and expansion of departments like frozen foods. Their stores came to be filled with house brand items, which they used to try to carve out a low price image, but meant they were slow to add new things. They had a loyal base of customers in the Southeast, where few chains built bigger stores and in inner city neighborhoods, where they stayed longer than many competitors and updated their store base. Their packaged baked goods are fondly remembered but their produce was usually the worst (except maybe for Kroger) and their meat was just ok. Their stores were very uneven and that was true all the way to the end---some were spotless and well run, while others reliably had bugs in the produce and expired dairy. They began closing stores on a large scale in the 70s, but they came to be unevenly represented in many markets and probably should have exited them sooner. They were top-heavy with administration and because people in the stores stuck around they had a reputation for high labor costs---I suspect this was diluted by chains they bought and the real problem was the feather-bedding of management who were reputed for being an old boys network.

The chains that built big stores were the exception, not the rule. Most chains built 15-19K sf stores until the end of the 60s: Acme, First National, Colonial, Kroger, and soforth. Food Fair, Penn Fruit and Grand Union built larger stores beginning in the 50s, as did some regional chains like Fisher Foods in Cleveland. Other chains began building bigger stores a bit later like Jewel and Giant, which went big into larger stores in the 60s. Some chains like Safeway were more cautious about getting bigger---marinas on the east coast were usually about 22K sf. Publix and Winn-Dixie were building 19-22K sf stores long after everyone else was building bigger stores. Some chains got bigger because that was what their major competitors did, like National Tea, which did it very defensively. Kroger built large stores at what was probably the last possible minute---they had already exited Chicago and their market share was in steep decline in many of their more northerly markets.

A&P bought some very good, market leading chains and ran them into the ground by not understanding what worked in their markets: Farmer Jack, Kohl's, Waldbaum/Food Mart. Waldbaum's was strong in perimeter areas and Farmer Jack's emphasized price, A&P was not strong in other direction even as they modernized in the 70s onward. they also did things like buy most of National Tea's stores in Chicago, which had been largely upgraded in ways they were only starting to understand---most of those went to independents. They remained in the NYC area long after they had exited anywhere else with the A&P name---they may have been uncompetitive with ShopRite, but they outlasted Grand Union and Acme's first entry into the area held onto a bigger footprint than First National. An understanding of the complicated logistics and marketing for the area was probably baked into HQ and by converting the the Manhattan stores to Food Emporium (another acquisition) they had found a format that enabled them to stay in the city until Whole Foods basically forced them to close those stores.

Excellent historical summary!

[wnetmacman]

A&P was largely a victim of its own arrogance over the years.

They believed firmly in brands you couldn't get elsewhere - Jane Parker and Eight O'Clock Coffee, to name two.

They believed firmly the stores they built were fine for the average shopper, who was at the time the American Housewife.

They continued to push regions that were dogs at best.

They tried formats that didn't work (WEO?).

They thought they were the best, even after getting passed up by Safeway, Kroger, Grand Union, et. al.

Then, the 70's happened. Virtually overnight, almost all of the western stores disappeared. You can follow along in newspapers around the western half of the US as store (and divison) closing announcements came, sometimes closing in sections, but always finishing off in the end. Texas was one such place where stores closed in waves until they were all gone. Many of the conveniences found in the 70's supermarkets were excessively slow to appear, or never materialized in A&P stores. Most Centennials that had Bakeries and Delis had them added after the fact. All of the other supermarket operators added them, and they worked.

By the 80's, they hit a resurgence. Other competitors were purchased and assimilated into the fold. By 2007, only New Orleans and the northeast remained. New Orleans took a hard hit from Katrina; several stores were damaged beyond repair or destroyed. The rest were sold off to regional operator Rouses. But A&P kept moving forward, digging the hole deeper.

Then, two rounds of Chapter 11 finished them off. It was, in effect, the world's longest liquidation sale. A&P is no more than a memory.

All because of their own arrogance. The average shopper is everyone. Folks quit buying store brands. And they want to go where they know the name means something other than lip service, in a larger store with convenience departments.

[Groceteria]

This (661 Scotland Rd, Orange NJ) was an operational A&P store at least as late as 1973. I think that just about says it all...