Mr. Penney, Mountains & Main Street

The pages of retail history are filled with the names of companies that no longer exist. Many of them were the picture of success for decades on end. They were leaders in their field - patronized, respected and loved by millions of customers. Household names. For one reason or another, these companies failed to adapt to conditions, and consequently they’re gone – sold out to a competitor, or just shuttered altogether.

It can be said that “adapting to conditions” is the one thing at which the 109-year-old J.C. Penney Company has excelled at above all else through the years. Rarely at the cutting edge of fashion – or anything else, for that matter, “the Penney Company”, as its founder always referred to it, has nonetheless continually managed to stay in step with the times, reinventing itself periodically to appeal to ever-evolving American shopping tastes. In the process they’ve amassed a track record that, despite occasional missteps, other retailers could aspire to only in their dreams.

In the mining town of Kemmerer, Wyoming in 1902, conditions were hard. Mr. Penney, in a letter to E.C. Sams, who would turn out be his most significant hire, described it as “a barren country, very little vegetation, and unless a man and his wife as well are strictly business, they might not like it.” The nearest water source, for example, was from a creek a half mile away from town. And for three months out of the year, the average low temperature was 6 degrees Fahrenheit or below. (“Might not make it” was probably more accurate.) Such was the unlikely setting for the birth of a retailing legend.

James Cash Penney (yes, that was his real middle name, he would assert on innumerable occasions) was born on September 16, 1875 in Hamilton, Missouri, a rural town some 65 miles northeast of Kansas City. Penney’s parents, in particular his father, a farmer and unpaid Baptist minister, instilled in him a strong sense of faith, hard work and ethics.

An early lesson in ethics came in his teens, when he was given a small parcel of the family land to raise watermelons. When the local county fair rolled around, Penney loaded up a wagonful of melons, parking just outside the fair’s gates where he began to do a “brisk business”, according to authors Tom Mahoney and Leonard Sloane in their book The Great Merchants. The elder Penney was not pleased when he discovered this, admonishing the young man for competing with the fair merchants “without paying for the privilege”. He ordered his son to take the wagon home, despite “Young Jim’s” technicality defense that he was actually selling outside the gates, albeit by only a few feet. It was a lesson Penney “never forgot”, the authors state.

Although he would maintain a lifelong interest in agriculture, Penney’s destiny lay elsewhere. “I am not cut out to be a farmer”, he told his father in a deathbed conversation related in the 1947 history of Penneys by Norman Beasley entitled Main Street Merchant, “I want to be a storekeeper”. In early 1895, at the age of 19, Penney was given his first job in retail as a junior clerk at J.M. Hale & Brother, a well-known local store in Hamilton. Penney was an eager pupil, and with Mr. Hale as “professor”, he learned the myriad aspects of store operations, from serving customers, to stocking, to sweeping the sidewalks out front. He drove himself extremely hard, earning promotions along the way, and over two years his salary increased from an initial $2.27 per month to $25 a month. But he nearly wrecked his health in the process. Things became so bad midway through his third year there that Penney’s doctor told him he was a prime candidate for “consumption” (an age-old synonym for tuberculosis) and that he needed to “get out of this Missouri climate” and move to Denver “right away.”

“Go West, young man, go West. There is health in the country, and room away from our crowds of idlers and imbeciles” is a phrase widely attributed to Horace Greeley, a famous 19th century newspaper editor and politician. Penney took his doctor’s (and Greeley’s) advice and boarded a train for Denver in June, 1897. To be sure, his health improved, but he did run into his fair share of “idlers and imbeciles” in his early work experiences there. Taking a job at the Joslin Dry Goods Company, the 5’8”, 135-pound Penney was subjected to endless hazing by the other clerks, so he left as soon as he could line up another job. A stint with a second area retailer came to an abrupt end when Penney discovered the store owner’s dishonest pricing practices. Disgusted, Penney demanded his earned wages on the spot and resigned.

Penney’s search for new employment led him 40 miles north to Longmont, Colorado, in the heart of cattle country, where a butcher shop was for sale. Penney decided he liked the town, and had his mother send him his savings of $300, enough to buy the shop and keep the butcher on the payroll. As it turned out, this particular butcher shop was heavily dependent on the business of one hotel, whose cook expected a bottle of whiskey each week on the side as a requirement for trade. (In researching this, I learned that most of Longmont’s early settlers came from Chicago. That explains that.) Penney complied for one week, and then refused to buy the cook off thereafter as a matter of conscience. So went the hotel’s business, and not long afterward, the butcher shop itself.

Eager to resume his career as a “dry goods man” after the butcher shop debacle, Penney applied for a job at a local store owned by T.M. Callahan, a dry goods and clothing operation similar to Hale’s, where Penney had worked back in his hometown. Callahan didn’t have any regular positions available, but informed Penney that he could fill in for one of his clerks who was ill and not likely to get back to work over the holidays – “so if you want to come in until he does come back,” he was quoted in Beasley’s Main Street Merchant, “I can put you on.” (And there you have it, dear readers - one of retailing’s towering figures started out as a “holiday temp”!)

Instead of letting him go upon the regular clerk’s return to work, Callahan, who was most impressed with Penney’s intuition and work ethic, made him an offer. Callahan’s business partner, Guy Johnson, whom he had set up with a dry goods store some 400 miles east in Evanston, Wyoming, needed some help. To help convince Penney to go for it, Callahan laid out his master plan to open a number of stores throughout Colorado and Wyoming, “the first time Penney had ever heard of chain stores”, Beasley states in his book. Penney eagerly accepted the challenge.

Not long afterward, Johnson offered Penney a partnership stake in a new store he and Callahan planned to open in Ogden, Utah, a town that at 35,000 in population was much larger than anyplace they’d opened their doors before. Upon making a visit to Ogden, Penney decided the city was “too big”, and while he liked the partnership idea, he preferred to operate in a smaller town. He expressed a desire to go to Diamondville, a ranching and mining town not far from Evanston. He liked the people he’d dealt with from there. Callahan suggested Kemmerer, Wyoming as an alternative, a “lively little (mining town)… between Diamondville and Frontier.” Penney agreed to move to Kemmerer, sight unseen. When Callahan and Johnson offered to finance Penney’s $1,500 stake at 8 percent interest, Penney opted to go with a bank in his hometown of Hamilton, Missouri instead, which had offered 6 percent terms, an early indicator of Penney’s independence and shrewdness.

In addition to the rustic conditions cited earlier, there was another major challenge facing anyone who cared to open up a “cash-only” store (which would be Penney’s rock-solid policy for more than 50 years) in a mining town like Kemmerer. There was very little cash in the town. Beasley quotes a banker describing the grim circumstance to Penney upon his arrival there: “Most of our people are miners. They are paid once a month. Most of them are clean out of money before the month is half over, and some of them seldom see any money.” In those days, mining companies often paid their workers in “scrip”, a form of coupon, in lieu of cash, and many goods were purchased at the mine-owned “company store” at unconscionable markups. The line in the song “Sixteen Tons”, a monster hit for Tennessee Ernie Ford in 1955, rang true for many mine workers in the early 20th century – “I owe my soul to the company store”. But rather than accept scrip, as other merchants (and saloons) in town did, Penney pressed on with his plans to open on a cash-only basis.

On Monday, April 14, 1902, the firm of Johnson, Callahan and Penney opened their first “Golden Rule Store” in Kemmerer, a one room building of wood-frame construction with “an attic, with the joists and rafters standing exposed”. In the days preceding the store’s opening, Penney had mailed out announcement fliers to 500 local mining families, and just before the store’s opening day, handbills – with a list of items for sale and their cash prices – were passed out on the streets of the town. The first business day, which didn’t end until nearly midnight, netted sales of $466.29.

Penney “considered it a sin if anyone came into the store without being waited on”, Beasley wrote, “(and) a greater sin if anyone went our without making a purchase”, so he and his wife Berta worked fastidiously, and demanded the same of their hired help. Another requirement, rooted in Penney’s religious upbringing, was that employees neither drank nor smoked. The first year’s results were far beyond any reasonable expectation, with total sales of $28,898.11 at a nice profit. Penney was able to pay off his loan and now owned his share of the store outright.

So impressed was Callahan with Penney’s performance in Kemmerer that he offered him complete rein over a fifty-store chain he was planning. Penney turned the offer down, though, citing he “was not ready for the responsibility.” Not yet, at least. The prospect soon took root in his thinking, however, and the idea of maybe three or four or six stores across “these mountain states” began to appeal to him, even though it would be “shooting at the moon”, as Penney said to his wife. She convinced him he was up to the task. Before long, Penney acquired partnership interests with Callahan and Johnson in two more stores, in Rock Springs (where he took over from a failing manager) and in Cumberland, Wyoming, a new venture.

In 1907, to Penney’s surprise, his partners informed him of their desire to sell out their shares in the three stores they co-owned with him. The agreed-upon price was $30,000, in a one-year note at 8 percent interest and Penney’s signature as the only security. Now he was on his own. Wisely, he chose not to stay that way for long.

Penney sought to emulate Callahan and Johnson’s “partnership” approach, where clerks were groomed for management and an eventual ownership stake in a store, but he would exercise more care in determining just who would be selected for these opportunities and when the time was right. “He felt…that the worst thing that could happen was to promote men before they were ready; when this was done, it meant defeat for both the giver and the receiver”, Beasley states.

Surprisingly, the man who would ultimately be the most important partner of Penney’s entire career showed up that same year, 1907. Earl Corder Sams was an ambitious 23–year old native of Simpson, Kansas. Having tried his hand at several trades and discovering he liked storekeeping the best, he engaged an employment agency to boost his prospects of finding a “dry goods” opening in the west, where he sought to make his future. The ensuing string of mail correspondence from Penney to Sams is presented in great detail in both the Main Street Merchant book and in Penney’s autobiography entitled Fifty Years with the Golden Rule, and makes for intriguing reading. In the typical ever-so-polite style of early 20th century correspondence, Penney expounds at length on his highly demanding requirements for the position, while cautioning Sams in detail about the pitfalls of merchant life on the frontier. You’d think he was interviewing for the most important position in the world. To Penney, it was. Sams made the trip to Kemmerer and then returned home, job offer accepted. After a month he returned, family and possessions in tow. Sams did so well as a clerk at Kemmerer that within months Penney put him in charge of the Cumberland store. A year later, Penney offered him part ownership in a new store in Eureka, Utah.

Penney continued to refine his partnership idea, devising a system whereby a successful store manager who had saved his money could buy a one-third stake in a new store, “provided he had trained a new man capable of opening and managing the new link in the chain.” Thus every “new man” sent out to open a store had been fully mentored as a chief clerk in his previous store, and would be able to buy an ownership stake in his next one. This was Penney’s vision for the growth of his company, and over time he gained the nickname “the man with a thousand partners.”

And he wasted no time in carrying that vision out. Penney, who just a few years before considered fifty stores a daunting number, began to set his sights far beyond that. By 1908 there were 4 total stores, two years later there were 14, and two years after that, 1912, there were 34, including locations in Wyoming, Utah, Idaho, Colorado, Nevada, Montana, Washington and Oregon. By this time, Penney himself had relocated to Salt Lake City, where he set up a central buying office and warehouse for the company.

But amidst all of this came a personal tragedy, when Penney’s beloved wife, who was in no small part responsible for his success, passed away suddenly just prior to a planned European vacation trip. He “plunged himself into work, open(ing) stores in rapid succession”, Beasley wrote, and took an extended buying trip to New York. Instead of returning to Salt Lake City afterwards he sailed for Europe, alone.

Upon his return, Penney dealt with some pressing issues facing the business. One was a need to revisit the name of his stores as the chain rapidly grew. Unfortunately, the name “Golden Rule Stores” was not at all unique to Penney’s organization. His former partners, Johnson and Callahan, were still using it on a number of stores they owned (separately, as the partnership between those two men had since been dissolved), and a host of other unrelated stores in the West used the moniker as well. On top of that, the use of the name “Golden Rule”, based on the Biblical principle “Do unto others as you would have them do unto you”, was considered suspect by many customers who feared that less-than-scrupulous operations were using the name as a cover for shoddy (and shady) business practices. Penney decided to replace the Golden Rule name with his own.

A major dilemma was the need for increased financing to handle expansion. Penney “had reached the limit of his personal borrowing (ability)”, Beasley wrote, and now the only real option was to incorporate and sell stock. This forced a change to the partnership structure as Penney originally conceived it, where the partners’ ownership stakes in the stores were converted to preferred stock in the new “J.C. Penney Stores Company”, a Utah corporation, incorporated on January 17, 1913.

Soon afterward, Penney began the long process of moving the nerve center of the company to New York City, starting with a central buying office there. The move was initially met with protest by many of Penney’s partners, virtually all of whom were “small-town Westerners (who) knew the ways of the West” and “wanted no part of New York.” (I’m picturing those old Pace picante sauce commercials, but I’m sure it was more dignified than that. Dub Taylor would have made a good storekeeper, though!) The fact was that most of the partners were resistant to the idea of any centralized buying office, which in part spurred Penney’s decision to close the Salt Lake City buying operation not long after it opened. (Penney blamed himself for the failure, for bringing in an outside person to run it instead of one of their own.) Even Sams was skeptical of the idea at first, but Penney’s logic was rock solid – at the time, a huge percentage of clothing and other “soft goods” was designed and manufactured in New York’s storied “Garment District”, a roughly 40-block area of Manhattan. Penney, who for all his gifts as a developer of management talent was also a consummately skilled buyer, saw the advantages of being close to the action.

The ethical aspects of business were always topmost in Penney’s mind, and in 1914 he authored a famous document which would become known as “The Original Body of Doctrine” (later “The Penney Principles”) that has been quoted multitudes of times over the years in nearly every forum imaginable. They were: “1.) To serve the public, as nearly as we can, to its complete satisfaction. 2.) To offer the best possible dollar’s worth of quality and value. 3.) To strive constantly for a high level of intelligent and helpful service. 4.) To charge a fair profit for what we offer – and not all the traffic will bear. 5.) To apply this test to everything we do: ‘Does it square with what is right and just?’” Timeless principles from a “mission statement” issued nearly a century ago, long before they became obligatory.

At the end of 1916, Penney stepped down as president of his namesake company, turning the operation over to the very capable hands of E.C. Sams, while Penney assumed the title of chairman. Penney chose instead to concentrate on leadership development and philanthropy, and years later in his eighties and nineties was the smiling, grandfatherly public face of the organization. With the exception of a very brief period following Sams’ sudden passing in 1950, however, Penney would never really run the company again, although his input was sought in major decisions and he remained the subject of great affection and respect.

The 1920’s saw some key acquisitions for the J.C. Penney Company, but one stood out as most significant, if only for sentimental reasons. In 1923, Penney got wind that J.M. Hale, the owner of the store where Penney started out in his hometown of Hamilton, Missouri, was planning to retire and sell his business. A delighted Penney bought out his former boss (years earlier he had privately decided not to open a store in Hamilton until such time as Hale was ready to sell), and the reopening of the Hamilton store as a J.C. Penney unit was symbolically timed to make it the 500th in the chain. When the location was closed years later in 1981, the story made the New York Times.

In the next few years, two more old friends sold out to Penney as well. Tom Callahan had continued to operate 12 stores, years after he, Guy Johnson and Penney split up their three-store partnership, and in 1926 he sold those stores to Penney. Johnson had remained in the dry goods business as well, with 20 stores of his own which he sold to Penney two years later. True to form, the company paid cash in both deals, which put the chain at nearly 750 total stores.

The company had grown to a point where it was time to make some major changes to its structure. Penney’s “manager/partner” concept had led to a somewhat haphazard growth pattern with “scarcely little central planning”, as Beasley put it. And while allowing a manager to open a new store provided a good opportunity, it was also a burden that took time away from the needs of the store he was actually running. To replace a manager’s lost income potential from opening new stores, Penney instituted a plan which “guaranteed by contract a share of the net profits of the store he managed,” (One-third of the store’s after-tax net, according to a 1950 Fortune magazine article. I’ll put the Kleenex away now.), and the manager could fully concentrate on operating his store. Market planning, store locations and real estate deals would now be handled by centralized departments. With these changes made, the stage was set for even faster growth and the establishment of Penney as a truly “national” company. At the end of 1928, with over 1,000 stores and $176 million in annual sales, the company’s renown was rapidly spreading beyond its still primarily Western base.

Among the J.C. Penney Company’s growing legion of admirers were some of the top retailers of the day. Over a lunch meeting with Mr. Penney near his New York offices late in 1928, a prominent Chicago businessman floated the idea that Penney should consider a merger with Montgomery Ward & Company, America’s second largest mail order firm, which was just starting to open retail stores of its own. The would-be matchmaker was Marshall Field III, scion of the legendary Chicago retailing family and president of the company that bore his name. The idea piqued Penney’s interest, and that very afternoon he called a meeting of his board of directors, and within days Ward president George B. Everett traveled to New York to meet with E.C. Sams and other Penney executives to discuss a possible merger.

Unclear after the meeting as to what Ward’s intentions were, Sams wrote Mr. Everitt to see whether he thought Montgomery Ward & Company should acquire Penney, or the other way around. Were Penney to be the suitor, they would need to ascertain the value of three key aspects: Ward’s corporate goodwill, their “organization and experience in buying and distributing lines of merchandise” that Penney didn’t handle, and the mail order operation, Ward’s greatest asset and a business with which Penney had no experience whatsoever. Everitt, in response, assured Sams that his company wasn’t for sale nor did he presume that J.C. Penney was. Any combination of the two companies would be a merger of equals that would form a completely new company. Committees were put together on both sides and much correspondence ensued, but the idea was soon dropped.

No sooner had the talks with Montgomery Ward ended that another overture came Penney’s way, once again from Chicago. General Robert E. Wood, president of Sears, Roebuck & Company, wrote a letter to Sams. Sears was underway with a rapidly-growing program to open retail stores as an adjunct to its massive catalog business, and Wood wanted to gauge Penney’s interest in a possible merger, as Penney’s store network was already sizable and becoming more well-developed by the month. The idea was too intriguing not to consider, and plans were laid for Sams to meet with “The General” in his Chicago offices. Wood proposed an idea (that Sears would ultimately adopt for itself in modified form) that the combined business “would have three segments: ‘a mail-order division; an A store division, which would include stores in the large cities; and a B store division, which would include stores in the smaller cities and towns.’” Under this arrangement, “Sears-trained executives” would continue to run the catalog business, while the “B” stores would be under the control of “Penney-trained merchants”. The larger “A” stores would presumably be run on a consortium basis, although some of Penney’s big-city units were impressive in scale by that time. Buying responsibilities would be split along advantageous lines, with Sears’ buyers continuing to handle hard goods, including appliances, farm equipment and automotive, while all apparel lines and other soft goods would become the responsibility of Penney people.

The merger would provide some advantages based on sheer size – the possibility of having the “dominating store” in town, the ability to split the country up into manageable districts “such as A&P and Woolworth now provide” and the ability to “attract outstanding personnel”. The talks heated up to the point to where the New York Times pulled the trigger on the story – “Penney Chain To Go To Sears-Roebuck”, the headline read in a December 3, 1929 article, based on “circumstantial” confirmation (insert choice remark here) by Sears Chairman Julius Rosenwald, who deferred to Wood on the details. (Rosenwald was Sears’ chairman, but Wood unequivocally ran the company.). Ultimately, Sams and the other Penney execs decided against it, out of concern that “our younger executives would have lessened rather than greater opportunities” in a situation where Sears would have clearly been the dominant entity. Beyond that, at the time Penney simply didn’t have the management manpower the deal would have required.

“The Penney Company” would go it alone, in a decision that was made for practical considerations. In light of history, of course, it turned out to be incredibly wise.

Shown above are various Penney stores from the 1920’s and 30’s, although some of the photos themselves postdate that era. Top to bottom, first up is the massive Oakland, California location, then a 1930’s Inglewood, California store followed by the small 1920’s store it replaced, a 1950’s view of a much older store in Cortland, New York (check out the shining details on that great porcelain sign), and a can’t miss “white goods sale” in Pasadena, California, with fine Spanish style architecture. These photos appear here courtesy of the J.C. Penney Archives at the DeGolyer Library at Southern Methodist University. My very special thanks to Joan Gosnell, archivist extraordinaire, for her extensive help and her sense of humor.

Pictured below is James Cash Penney’s second store in Kemmerer, in what is probably the earliest known photo of a Penney store. (Engravings and paintings of the first store exist, but no photos to my knowledge.) Something tells me the establishment next door was much more “saloon” than “opera house”.

The Legend of the Great A&P Tea Co.

The Great Atlantic & Pacific Tea Company is a New Jersey-based, and for the last thirty years, German-owned supermarket chain. As of today, according to their website, they operate 435 stores in six Northeast and Mid-Atlantic states (including a lone Washington, D.C. unit) under a number of different banners, including Super Fresh, Food Basics, The Food Emporium, Waldbaum’s, Pathmark and of course, A&P. The last couple of years have seen the company exit the Detroit and New Orleans markets, and after an 80-year presence there, the A&P banner is no longer to be found in Canada.

For many cities, the A&P story over the last several decades has been a sad one of retrenchment, and ultimately of disappearance. For those born in the last twenty years or so, unless they live in one of A&P’s current or recently vacated markets, chances are good they’ve only heard of A&P in passing - a brief mention in an American history class, perhaps, or a fond anecdote from an older relative.

It wasn’t always this way. As recently as the mid-1960’s, A&P was the largest retailer in America. Not just the largest supermarket chain – the largest retailer, period. Larger than Sears at the peak of its power. Larger than their nearest two competitors – Safeway and Kroger - combined. Responsible, to a great extent, for the very concept of the “chain store” itself. A part of daily life for Americans (and a fair amount of Canadians) from a multitude of communities, large and small.

The story of A&P begins in the mid-19th century, with two men, both named George, both natives of Maine, and both of whom eventually moved to New York to seek their fortunes. George Francis Gilman was born in Waterville, Maine, in 1826 to a prominent, wealthy family who owned a leather goods business. George Huntington Hartford, seven years younger than Gilman, was born in Augusta, to a farm family of far more modest means. Details on how the two men met are sketchy and somewhat contradictory in the various accounts I’ve read (not surprising given the event took place over 150 years ago, and the fact that stories like this tend to take on a mythical quality over time), but it is apparent that Hartford had worked for Gilman at a dry goods business some years prior to their arrival in New York - possibly in St. Louis. Hartford also lived and worked in Boston at one point as well.

By the 1850’s, Gilman had turned his sights from the family’s leather goods business to a new interest – the importing and brokerage of tea. Eventually, he asked Hartford to join him in the business, which consisted at first of a single delivery wagon. In 1859, their company was formally established as The Great American Tea Company. By this time, their roles were more or less set – Gilman was the financier and promoter. Hartford was the operator, though over time he would develop impressive skills as a promoter himself.

The first store was opened at 31 Vesey Street in New York City. The company’s early stores featured very ornate décor - vermilion red (sort of an orange-red) walls and gilt fixtures, oriental paintings and a plethora of ornamental gas lights. In 1869, Gilman and Hartford modified their company’s name in a tribute to the establishment of America’s first transcontinental railroad – the driving of the “golden spike” at Promontory Point, Utah, uniting the Central Pacific and Union Pacific railroads, east and west. Henceforth, the company would be known as “The Great Atlantic & Pacific Tea Company”. The new name, of course, was also a not-so-subtle indicator of the company’s aspirations.

In its earliest days, A&P employed a very different marketing approach from “the most good food for the least money” philosophy upon which their fame and fortune would later be built. Prior to 1912, the company relied on all manner of premiums and giveaways to stimulate sales. Millions of “trade cards”, essentially postcards with Victorian scenes of angels, children, pets, flowers and other idyllic subjects on the face and A&P advertising on the reverse were given out. In those modest times, the cards did much to endear A&P to their customers. A high percentage of them were saved for decades, displayed for decorative use in homes. Even today, 100 or more years later, A&P trade cards turn up frequently in antique malls or on Ebay.

In 1878, Gilman retired to enjoy the New York social whirl, turning the operation of the business over to Hartford, while retaining his half ownership stake as a silent partner. By this time, the company was growing at a nice clip - according to the Progressive Grocer book “A&P, Past, Present and Future”, by 1876, A&P’s domain extended as far east as St. Paul and by 1881 as far south as Norfolk and Richmond, Virginia.

One development of the 1880’s that was no doubt unheralded (and probably little noticed) at the time would have a profound effect on A&P’s destiny well into the next century - the entry of two of George Hartford’s sons into the business. Only teenagers at the time, the sons – George Ludlum Hartford and John Augustine Hartford - would become two of the most influential figures of all time in the grocery business, and are still regarded as such today. For over sixty years they would helm A&P. The brothers were polar opposites by nearly every measure – George, born in 1864, was the guardian of A&P’s finances. Short and somewhat rumpled in appearance, he settled in a New Jersey suburb, where he lived conservatively, and enjoyed simple hobbies. He disliked taking vacations. John, born in 1872, headed up A&P’s operations and marketing. A true visionary, John’s initiatives were the life force behind A&P’s phenomenal growth in the first half of the 20th century. Tall, dashing and always impeccably tailored, as an adult he lived in grand style in tony Valhalla, New York, a member of the top social echelon. Despite their vast differences and frequent disagreements, the brothers had an abiding personal regard for each other and a strong respect for the different roles they fulfilled for A&P. As young men, to avoid confusion with the elder Mr. Hartford, the brothers were given the nicknames “Mr. George” and “Mr. John”. Long after their father’s passing, indeed for the rest of their own lives, they were referred to within A&P circles as such.

In 1901, A&P co-founder George F. Gilman passed away. It was a sad occurrence, to be sure, but Gilman’s death also had an exasperating side effect. It came to light soon afterward that no contracts or agreements of any kind had ever been drawn up at the time of the company’s founding 40 years earlier. As a result, George Huntington Hartford had no documentation to confirm his ownership stake in the company – and no way to defend it from claims against the estate of Gilman, who had no children. After a harrowing four-year court battle, Hartford’s rights were established, although a big chunk of Gilman’s estate (largely composed of A&P stock, of course) was awarded to his longtime female companion, according to the book "The Rise and Decline of The Great Atlantic and Pacific Tea Company" By William I. Walsh. Hartford eventually bought her shares out, gaining complete control of A&P for his family.

By the dawn of the 20th century the younger Hartfords, George and John, were firmly in charge of the “Tea Company”, as insiders tended to call it, an empire that consisted of nearly 450 stores by 1912. Certainly A&P was prosperous, but John Hartford saw ominous warning signs for the future. The company’s growth had plateaued, despite the fact that A&P had begun to evolve into a true “grocery store” through the addition of hundreds of food items alongside their tea and coffee offerings. Prices and profit margins were high and the gaudy premiums were taking up half the shelf space in some locations, presumably leading Hartford to grow concerned that A&P was slowly becoming a pricey “boutique” operation, damaging its appeal to the average customer on a modest budget.

What John Hartford conceived as a solution to this dilemma – the “Economy Store”, as it was called, would not only launch A&P into the stratosphere and ultimately into legend, but also formed the basis of modern mass retailing – the “everyday low price” concept. Under Hartford’s new concept, the giveaways and premiums would become history. Profit margins would be cut to half the previous level. The fancy decor would be scrapped. The “vermilion red” walls would become simply red. (The color, not the band.)

Despite the initial objections of his brother and father, Hartford pressed on, wisely placating them by agreeing to move forward on a “test” basis, first with a single store in Jersey City, N.J., then on a larger basis with a few stores in one of the company’s New York City districts. The customer response was overwhelming, and within a couple of years, the Economy Store program was running full tilt. The traditional A&P stores began to close as the new Economy Stores opened. The Progressive Grocer book cites some impressive statistics – In 1915, 95 stores were opened in the Boston area alone. By February of that year, A&P had more than doubled in size to 938 stores, hitting the 2,000 store mark following year and 3,000 stores the year after that, 1917. Ten years later, in 1927, A&P could boast an astonishing 15,000 stores, all sporting A&P’s new slogan, “Where Economy Rules”, in a bar beneath the famous A&P “red circle” logo.

One particular group was less than thrilled with A&P’s new pricing policy. Some of A&P’s brand name suppliers, under pressure from other chains and thousands of independent grocers, were furious that the A&P Economy Stores were undercutting their suggested retail prices. Out of this morass came a famous lawsuit, filed by The Cream of Wheat Company, whose namesake product was heavily advertised nationally and was enormously popular in those days. Cream of Wheat had set a price of 14 cents per box at that time, which virtually all retailers, except A&P, honored. A&P cheerfully sold it for 12 cents a box, moving huge quantities. In 1915, Cream of Wheat filed suit against A&P to force them to stop the practice. A vigorous defense notwithstanding, A&P lost the case. The experience did much to convince A&P to invest heavily into manufacturing their own private label goods. By the end of the 1920’s, A&P was as formidable in food manufacturing as it was in retail, with factories strewn throughout the country, processing every type of food imaginable – even to the extent of operating their own fisheries and packing plants in Alaska.

In 1917, A&P’s other co-founder, George Huntington Hartford, passed away. Two years earlier, he had formed a trust that equally divided A&P ownership among his five children, but specifically placed all decision making authority with George and John.

Closing in on 14,000 stores in 1925, the task of running all aspects of the company from A&P’s headquarters was becoming unwieldy, to say the least. That year, the company shifted to a decentralized management structure which split their operating area into six regions, each with its own administrative offices and distribution centers.

When the depression hit in October 1929, A&P was in a far stronger position than most retailers. The “Economy Store” concept was a perfect fit for the times. Just two years previously, John Hartford had laid down the law to A&P’s command corps when he noticed that profit margins were starting to creep up again, past a level he considered acceptable. “The most good food for the least money” was the slogan, and would be the non-negotiable rule. Challenges would follow in the 1930’s, both from competition and from government, but for now A&P was standing strong.

The two photographs above, depicting a circa-1931 A&P store, are Property of the Holyoke Public Library History Room and Archive, and appear here by their kind courtesy. The Library’s collection, along that of several other Central and Western Massachusetts institutions can be viewed on the wonderful Digital Treasures website. Below is another A&P “Economy” storefront, from roughly the same time period, from a 1970 Progressive Grocer article. Last is a photo of a much earlier A&P store, typical of the ornate treatment (check out the sign lettering and the trellis work in the window) these stores received. Picture it in vermilion and gold. Thanks to Cynthia Closkey for the use of this great early photo. Her great-grandfather and his siblings, who operated the store, are featured in the photo.

Woolworth's - The Largest Variety Store

On an icy winter’s night in 1963, the downtown Denver, Colorado Woolworth’s provides a warm oasis for shivering Christmas shoppers. Newly expanded to a huge 174,000 square feet, this store scarcely fit the traditional five-and-ten/dime store image with gold-lettered “red front” signboards above a quaint storefront that the name Woolworth’s conjures up to this day. (This impression persists despite scores of intricate art deco-exteriored Woolworth stores that opened in the 30‘s and 40’s.) If anything, the Denver store’s clean lines and imposing scale resembled the sprawling suburban mall department stores that by 1963 had come to symbolize the American Way.

Dubbed “The World’s Largest Variety Store” upon its grand reopening in October 1963, the downtown Denver location featured the typical Woolworth’s lineup of the time, albeit more of it. The store boasted “two miles of display counters” within “58 shops and departments offering more than fifty thousand items of goods for the entire family and whole home, ranging in price from a few pennies to upward of one hundred dollars”. These departments carried apparel for the whole family, housewares and home furnishings, garden, pet, camera and music shops, and of course toys. Also in-house were a “utility bill-paying station” and total restaurant/luncheonette seating capacity of 700 (!) people. Within the restaurant area was a sandwich counter, named the “Chuck Wagon” in salute to “Colorado’s famous livestock industry”. Of course, the western theme was stretched a bit with the addition of hoagies and pizza to the menu. (I was tempted to say “git along, little hoagie”, but thought better of it.)

One thing becomes obvious when reading Woolworth’s press releases from that time. Despite having launched a new chain of discount stores the previous year, Woolco, large variety stores like the Denver unit were the company’s pride and joy. They would continue to be the organization’s main focus for many years to come. Woolworth’s main competitor, S.S. Kresge Company, took a very different attitude. Kresge made it abundantly clear that their Kmart discount chain, also introduced in 1962, would be that company’s top priority. Within just a few short years, the Kmart program would have a transformative effect on the Kresge company, as it eventually would on mass merchandising in general. By comparison, Woolworth’s approach to Woolco seemed more tentative.

The story of the F.W.Woolworth Company is deeply woven into the American cultural fabric. Frank Winfield Woolworth’s company was founded with a single store that opened in Lancaster, Pennsylvania in 1879. Initially known as the “Great 5-cent Store”, it wouldn’t become a “five-and ten” until the following year, when the company began to carry higher priced goods. By 1886, the company had grown to seven stores, which now featured the soon-to-be-famous “red front” facades. That same year, Woolworth opened his new company headquarters in Manhattan. By 1900, Woolworth was operating 59 stores with total annual sales of $5 million. In 1909, the first British Woolworth stores (“three and sixes” as opposed to “five-and-dimes”) were opened. Woolworth sought unique ways to be of service to his customers, and one of the more successful ones was to introduce fabrics and other fine goods from Europe into his stores, at prices the general public could afford. Prior to that time, these goods were out of the reach of many American pocketbooks.

A huge advance in the company’s growth came in 1912, when Woolworth consolidated his 319 stores with three northeastern variety chains - S. H. Knox and Co., F.M. Kirby and Co., E.P. Charlton and Co., and the stores previously held by his brother Charles S. Woolworth and by W.H. Moore. The new company was formally incorporated on January 12, 1912 as “F.W. Woolworth Company”, with a total of 596 stores across the entire country, and stock was offered to the public. The Woolworth organization was in place, and through much of the 20th century would be a dominant force in American business. Woolworth and The Great Atlantic and Pacific Tea Company became widely acknowledged as the twin behemoths of retailing. A year later, the magnificent 60-story Woolworth Building would open in New York City, the tallest building in the world at the time. President Woodrow Wilson ceremonially turned on the building’s lights for the first time, from a telegraph key in the White House.

The company continued to prosper despite Frank Woolworth’s passing in 1919. Ten years later, Woolworth would celebrate its 50th Anniversary with over 2,200 stores and $303 million in sales. Three years before that, in 1926, the first Woolworth units had opened in Germany, which would prove to be an important market for the company. The ten-cent price cap was doubled to twenty cents in 1932, and three years later, price ceilings would be done away with altogether. Woolworth’s would begin to stock all manner of goods, even featuring jewelry in some locations.

In the 1950’s, two major changes in American retailing forced themselves on Woolworth’s, and the company was smart enough to go with the flow on both. The first was the “self-service” trend, and the second was the shift away from downtown store locations toward suburban shopping malls and strip centers. In the mid-50’s, Woolworth closed in on nearly 3,000 stores, and many older stores were modernized. Another key international market, Mexico, was entered in 1956.

Through the entire decade of the 1950’s another trend gained traction, and by the early 60’s was akin to an unstoppable train – the emergence of the large, suburban discount store. By then, the success of the northeast-based discount chains – E.J. Korvette, Zayre, Topps and many others, along with the challenges this new type of store would present to the variety chains had become the cocktail conversation of the retail industry. In a September 1961 New York Times article, Woolworth president Robert C. Kirkwood outlined his company’s plans to open a nationwide chain of department stores under the name “Woolco”. Plans for 17 initial stores were announced, with the first store to open in Columbus, Ohio in the spring of 1962. Mr. Kirkwood told the Times “It is our goal to have the largest chain of discount stores in America”.

As it turned out, Woolworth wasn’t alone in that goal.

The Woolworth promotional photos above are from 1963 and 1964. The first four depict scenes from the Denver, Colorado store mentioned above, showing the store exterior, ladies’ and mens’ departments and the “Chuck Wagon” sandwich counter. The rest of the photos are from various Woolworth stores. Shown are the home décor section, with mirrors, tasteful paintings and groovy “starburst” clocks, followed by the bedding, paint and sewing departments.

The last three photos show the only departments that would have concerned me in my youth. (Well, I guess I’d have to count the restaurant as well!) The “music shop” and record department, which features two Kingsmen (“Louie, Louie”) albums and the soundtrack to the Beatles’ “A Hard Day’s Night” film (half of that album was made up of instrumentals – I had the 8-track in the early 70’s), the very colorful toy department, and finally, the place I would have been guaranteed to spend every possible minute - and every possible dime I could wheedle out of my folks – the book department, with its fine selection of Mad paperback books. These were collections of articles that had previously appeared in Mad Magazine. If you were into those, and precious few my age weren’t, click on the enlargement and dig the classic titles – “Fighting Mad”, “Son of Mad”, “The Mad Frontier”, “Mad in Orbit”, “The Organization Mad”, and among others, my all-time favorite – “We’re Still Using That Greasy Mad Stuff”. In an affirmation of my good taste (or lack of it), this book appears in the 1966 movie version of “Fahrenheit 451”, where it's burned up along such other classics as Jane Eyre, Othello and Wuthering Heights.

I know. “News you can use”, right?

Wards, America's Cheapest Cash House

The 1872 founding of Montgomery Ward & Co. was not just the beginning of a company, but of an entire industry – one that thrives today, years after Wards ceased to be a major part of it, or to exist at all. Mail order pioneer, Chicago legend, and nationwide department store fixture, Montgomery Ward is part of the American story – mention the name “Monkey Wards” and most folks will know what you’re talking about, whether their family shopped there or not.

The company’s founder, Aaron Montgomery Ward, was not a Midwesterner by birth. Born in Chatham, New Jersey in 1844, Ward and his family “headed west” when he was 8 years old, settling in Niles, Michigan. Later on, Ward moved some 30 miles away to St. Joseph, on the shores of Lake Michigan, where he took a job as a retail clerk. Within three years, Ward was running the store. In 1866, at age 22, Ward moved to Chicago, where he accepted a position with the new wholesale “dry goods” firm Field, Palmer and Leiter, forerunner to Marshall Field and Company. After two years with the Field firm and one with another company, Ward moved to St. Louis to work as a traveling salesman for another wholesaler, calling on stores via horse and buggy. Before long, Ward was back in Chicago, working for yet another wholesale firm, C.W. Pardridge Co.

Over the previous couple of years, while in the employ of others, Ward was diligently developing his own business idea, one based on his observations of the farmers who patronized the stores on his wholesale routes. In those days, rural customers generally had to contend with high prices on a very limited merchandise selection. Ward came up with an idea for a “mail order store”, where catalogs (which were initially just “merchandise price lists”) were mailed out to potential customers far and wide. Orders would be mailed to and shipped out of a centralized warehouse. By 1871, Ward had saved up enough money to give it a go, and began to stock up on merchandise to sell though his own catalog.

On October 8, 1871, the great Chicago fire struck, destroying major parts of the city, including countless homes and businesses. While Ward’s employer’s (the Pardridge firm) business escaped unscathed, the stock of merchandise Ward had put together for his own fledgling business was destroyed. “Like the rest of the city”, as Ward’s 1972 100th anniversary publication put it, “Ward dusted himself off and went back to work”. By the following August, two of Ward’s fellow Pardridge employees had joined him, and with $1600 in hand Ward purchased new goods, rented an office on North Clark Street and issued his first one-page price list.

The rise of Montgomery Ward & Co. coincided with that of the National Grange of Husbandry, an organization dedicated to advancing the interests of the farmer. Known popularly as “the Grange”, local chapters were set up in rural areas far and near. Starting as basically a social organization, the Granges quickly gained power and political influence in their communities. Wisely, Ward closely aligned his company with the Granges, sending out price lists to each Grange Hall and encouraging members to pool their orders to save on shipping costs. For decades, even after the Granges’ influence had receded, Montgomery Ward was thought of by many as “The Grange Supply House”.

Ward received an unlikely boost from what could have been a disastrous event in the young company’s life. On November 8, 1873, the Chicago Tribune published a blistering editorial about the company entitled “Grangers beware. Don’t Patronize Montgomery Ward & Co. – They are Dead-Beats!” The rousing headline was followed with a series of charges – “Another attempt at swindling has come to light”…”they keep altogether from the public gaze, and are only to be reached through correspondence sent to a certain box in the Post Office.” Ward’s customers were caught in the crossfire as well – “it is known that a certain proportion of the multitudes of circulars issued fall into the hands of credulous fools, who place boundless faith in anything which is set up in type and printed. If such fools would only consider how easy a thing it is to start a swindle of this kind, the dead-beats who get them up would be driven to hard work, or still better, perhaps, starvation.” Ah, the journalistic restraint of days gone by! Ward threatened to sue.

The Tribune’s retraction, published in the December 24th edition, would prove to be worth its weight in gold to Wards. An early paragraph read: “The (November 8) article was based on what was supposed to be correct information, but a thorough investigation by this office satisfies us that the article was grossly unjust, and not warranted by the real facts. The firm of Montgomery, Ward & Co. is a bona fide firm, composed of respectable persons, and doing a perfectly legitimate business in a perfectly legitimate manner.” Ward was so pleased with it that he reprinted the article in its entirety in his next price list.

In 1874, Ward, now joined by his brother-in-law George Thorne as a partner, moved his business to a larger building at the corner of State and Kinzie Streets. Through the remainder of the 19th century, Montgomery Ward & Co. grew impressively, and the Wards catalog, which had evolved from the simplest type-set sheet to a 150-plus page magazine with ornate engraved covers, was wildly popular with consumers across the entire country, but especially so in the nation’s frontier heartland. In addition to clothing and farm goods, Ward carried groceries, and for a few years, liquor. In these years, Wards advocated for their customers by battling a number of industry trusts, which had attempted to fix prices on such basic needs as sugar and binding twine.

Ward and Thorne gradually turned the day-to-day management of the company over to younger men, including Thorne’s five sons, all of whom would eventually join the business. In 1887, Montgomery Ward moved to a new six-story building on Michigan Avenue, which would be expanded many times by the end of the century. In June 1889, the Ward-Thorne partnership was formally chartered as a corporation.

In 1893, Sears Roebuck and Co. was incorporated, moving their offices from Minneapolis to Chicago the following year. In just a few short years, Sears, who adapted the mantra “Cheapest Supply House on Earth” (similar to Wards’ “Cheapest Cash House in America”) emerged as Montgomery Ward’s chief rival, and what would be a century-long rivalry was underway.

1893 was a key year for Ward in a number of other ways. The company gave away tens of thousands of a special “World’s Fair Edition” of its catalog at Chicago’s Columbian Exposition. Even more important than that was Congress’ passage of the Rural Free Delivery Act (R.F.D.) which opened the door to mail delivery to individual rural homes. Prior to that, most country dwellers had to pick up their mail from a post office. As R.F.D. was implemented, Wards’ catalog deliveries and sales skyrocketed, provoking the ire of local country merchants. A number of them staged “catalog burnings”, encouraging locals to toss their treasured Wards catalogs into a bonfire - something the founder took as a true validation of his company’s success.

That same year, Ward sold his majority interest in the company to George Thorne. By this time, Ward was devoting his full-time energies to a new passion – the preservation of Chicago’s lakefront as a city park, off-limits to developers. More than anyone else, Ward deserves the credit for the priceless asset that is Chicago’s Grant Park. Ward fought for twenty years and through four legendary court battles to achieve this, losing many friends among Chicago’s business and social elite along the way. Aaron Montgomery Ward, retail and environmentalist pioneer, known in his last years as “the watchdog of the lakefront”, passed away at the age of 70 on December 7, 1913.

His namesake company continued to thrive. In 1908, Montgomery Ward opened its massive new distribution center, a 500-foot long, 9-story high, 2 million square foot colossus along Chicago’s riverfront, a facility the company would use into the 1970’s. Wards had opened its first of many branch operation “catalog houses” in Kansas City in 1904, replacing it with a much larger building in 1907. Later on, Wards would open more of these huge facilities – in Oakland in 1923, Baltimore in 1925, Fort Worth in 1928, and Albany, NY and Denver in 1929.

George Thorne’s sons had operated the company with varying degrees of efficiency in the early years of the 20th century. Today, the Thorne name is probably best known in Chicago in connection with the “Thorne Rooms”, a fascinating collection of miniature dioramas first exhibited in the 1930’s at the Art Institute of Chicago. They were conceived and funded by Mrs. James Ward Thorne, the wife of one of Mr. Thorne’s sons.

One brilliant hire they made was Robert E. Wood, a former World War I Quartermaster General, who shaped up their distribution system and advanced a new idea to help the company get the most mileage out of its gigantic branch warehouse operations – to open 40 to 50 retail stores within a radius of each “catalog house”, tapping the revenue possibilities of these facilities, adding a potential $20 million a year to Wards’ coffers. Alas, General Wood proved to be “the one that got away”, leaving Wards, whose top management was painfully slow to respond to his proposal, for Sears, Roebuck and Co. in 1924. Wood, who at Sears would become one of the most legendary retail figures of the 20th century, opened Sears’ first retail store the following year. 350 Sears stores would be in operation by 1930, drastically changing the competitive dynamic between the two companies.

By 1927, the Montgomery Ward management had come to view their lack of a retail store presence as a mistake. A decision was made to open a handful of “display stores”, under the assumption that customers would be favorably inclined to buy merchandise they could actually touch as opposed to making their decision based only in catalog pictures. The problem was, the term “display store” meant exactly that – customers could order but not bring home the merchandise! It would be shipped to them in the standard manner from the closest Wards warehouse. The goal was to rotate the selection of merchandise shown in the display stores, choosing from Wards’ then 33,000 different items carried. The first display stores were slated for “Marysville, Kansas, Plymouth, Indiana and Little Falls, Minnesota, all good mail order areas”, according to the Wards 100th Anniversary book.

The conversion of the Plymouth, Indiana store from a purely “display” store to a conventional retail store happened in an interesting way, as related in story in the Anniversary book. Although the Plymouth display store was well-received, there was a fair amount of frustration expressed by customers about the inability to buy and take home the merchandise on the spot. This led to grumblings to the effect that Wards’ display units might be superior quality to the actual products shipped, a classic “bait-and-switch”, that in this case was patently untrue. It all came to a head one day when a carpenter showed up at the store and noticed that a saw was selling for 75 cents less than he could buy a comparable one for down the street. When told of the store’s policy, the carpenter became irate, demanding to buy and take home the saw. Finally the store manager relented and sold it to him. When word of this got around, the store was besieged, and was forced to sell off their sample stock to the clamoring public.

Montgomery Ward brass, upset about this at first, began to come around when the profit potential became too obvious to ignore. A test program was put in place with eight more display stores, now allowed to stock and sell the actual products, was put in place. The following year, now satisfied with the idea, Ward’s board of directors put the pedal to the metal, approving a program to open 212 retail stores in 1928.

Were it not for that carpenter, would any of us have “Monkey Wards” store shopping memories today? It boggles the mind - almost too deep to ponder.

The photo above, from the book “1872-1972 A Century of Serving Consumers – the Story of Montgomery Ward”, depicts the Plymouth, Indiana display store discussed above. Below are two photos from the E.M. Ball Photographic Collection (1918-1969), Special Collections, D.H. Ramsey Library, University of North Carolina at Asheville depicting two early Montgomery Ward stores in Asheville, North Carolina, the first on Biltmore Avenue and the second on Patton Avenue, both circa 1930’s.

Barney Kroger - The Cincinnati Kid

The history of Kroger, like that of so many companies born in the same era, is a great American story. The roots of today’s Kroger Company reach back to 1876, when 16-year old Bernard Henry Kroger took a job selling coffee and tea door-to-door for The Great Northern and Pacific Tea Company in his hometown of Cincinnati. Kroger, one of ten children born to German immigrants, worked hard to help support his family, who lived in a flat above a dry goods store the family owned. After two years, Kroger left Great Northern to join the William White Company, another coffee and tea firm, leaving that firm shortly thereafter for the Imperial Tea Company.

When Imperial began to run into trouble, the owners asked young Kroger (who had been working a wagon route up to that point) to manage the company’s store for a 10% cut of the profits, which at the time were virtually nonexistent. Convinced he could turn things around, he took up the challenge. A stickler for quality with more than a bit of starch in his personality, Kroger built a following for the store. Interestingly, as Progressive Grocer noted, “It wasn’t a wealthy clientele. They were wage-earners’ wives who came back to shop, and told their friends…” Having saved up $372 from a year of toil, a considerable sum in 1883, Kroger approached the Imperial Tea owners with an offer to buy a one-third interest in the company. They refused, offering an increased share of the profits instead. Adamant about owning a stake in the game, Barney decided to strike out on his own.

With an additional $350 borrowed from a friend, Kroger opened “The Great Western Tea Company”, a tiny store on Cincinnati’s Pearl Street, replete with fire-engine red paint and gilt lettering, with a horse-drawn wagon sporting the same colors. Through some initial setbacks, including the loss of the horse and wagon in an unfortunate train crossing accident, a flood which destroyed the store’s initial stock, and an attempt by his landlord to increase his store’s rent (forcing Kroger to move to a less attractive location on a side street), Kroger persevered.

Within months, Kroger opened a second store, and by mid-1885 had added two more for a total of four units. By 1893, after ten years on his own, Kroger had 17 stores and was considered one of the most successful businessmen in Cincinnati. In 1902, The Great Western Tea Co. was reincorporated as The Kroger Grocery and Baking Company, which would remain the company’s legal name for the next 40 years. The word “baking” in the company’s name reflected an important aspect of Kroger’s business. At the turn of the century, Kroger made a splash by announcing his plans to set up the company’s own bakery, selling loaves to Kroger customers at half the average going price, then 5 cents each. Not only would this help build business for his stores, but it also would enable Kroger to capture a bigger chunk of his customers’ bread budget, beyond just bulk flour, butter and egg sales. As he acknowledged to a New York Times interviewer in 1901 - “In Cincinnati, with its large percentage of thrifty Germans, bread is usually baked in the home”. At two for a nickel, Kroger projected sales of 25,000 loaves per day to those thrifty folks.

Another innovative step Kroger took was born out of the company’s 1904 acquisition of the Nagel butcher shop chain in Cincinnati. After initially operating the meat markets separately, Kroger made a decision to integrate them into his grocery stores. Over the initial objections of his butchers, who resented the loss of their independence and the new bookkeeping requirements Kroger imposed, these early forerunners of the “complete food market” proved to be a huge success and had a great influence on the chain food store business as a whole.

With a solid base in Cincinnati, Kroger began to expand to other areas, first to nearby Hamilton, Ohio, then to Dayton and Columbus, where the company had 15 and 8 stores respectively by 1910. These initial forays were followed by an expansion drive (which reached a fever pitch by the late 1920’s) to other cities and the smaller towns in between- Detroit, St. Louis, Peoria, Indianapolis, Toledo, Cleveland, Grand Rapids, Youngstown and Charleston (WV), to name some examples. Much of this growth was accomplished through acquisition – 109 Piggly Wiggly and 43 Kohn Stores in the St. Louis and Central Illinois areas, 108 Piggly Wiggly stores in Louisville, 114 Bowers grocery stores in Memphis and the surrounding area, (along with yet more Piggly Wigglys) and Universal Stores of Madison, Wisconsin. In the coming decades, acquisitions would continue to provide a major vehicle for Kroger’s growth.

In late 1926, rumors began to fly that Kroger would merge with Philadelphia-based American Stores Company, possibly in combination with First National Stores or the H.C. Bohack chain. While some talks were held, these plans never came to fruition, and in my opinion would likely have not gone over well in light of the beginnings of a movement against chain store “monopolists” (or more accurately, oligarchs) that would gain sentiment as the 30’s rolled on.

In December 1927, B.H. Kroger sold his stock in the company, staying on as chairman but stepping down as president, turning that responsibility over to William H. Albers. Later on, he would repurchase a huge block of Kroger stock to help bolster confidence in the company through the depression years that followed. In November 1931, with nearly 4,900 stores in operation, he retired altogether. Barney Kroger passed away in July 1938, leaving behind a company that 70 years later is the largest company in America whose mainline business is supermarkets – an admirable legacy.

These photos are undated – the top photo showing a “B.H. Kroger” store circa the dawn of the 20th century. Below is a typical Kroger from the early 30’s, near the end of Mr. Kroger’s tenure with the company.

A Very Good Start For Zayre

Although the first Zayre department store didn’t open until 1956, the chain’s beginnings date back to 1919, with the formation of The New England Trading Company, an underwear and hosiery wholesaler. Founded in the Boston area by brothers Max and Morris Feldberg, the company began as a supplier to full-line department stores and specialty shops. Ten years later, the brothers launched their first retail operation, Bell Hosiery Shops (later shortened to “Bell Shops”). Within a few years, the Bell Shops product line began to expand beyond underwear and hosiery to include other clothing lines. By the mid-30’s, the Bell Shops were full-blown women’s’ specialty stores, competing against such chains as Lerner Shops and Three Sisters. There were nearly 30 Bell Shops in the New England area by the end of World War II.

In 1946, the company doubled its store count with its buyout of New York City-based Nugents, another women’s’ specialty store chain with a great deal of similarity in approach to Bell Shops. The Nugents chain (whose name would be retained), with its store base in New York, Pennsylvania, Delaware, New Jersey and Washington, DC provided a natural extension of the company’s market area with virtually no overlap.

By the early 1950’s, the company’s sales had reached a plateau, and it became clear to the Feldbergs that fairly drastic changes would need to be undertaken in order for their business to remain viable. Despite classy remodelings, and in some cases the opening of larger stores, the Bell Shops/Nugents stores were losing ground due to two important trends, among others – the decline of downtown business districts (with notable exceptions, such as the Quincy and Malden, Massachusetts locations, where the city fathers had the foresight to provide large downtown free parking areas) and the rise of the “mill” discount store operations, a trend that literally rose up in the company’s backyard.

With the family’s second generation, Stanley H. Feldberg (son of Max) and Sumner A. Feldberg (son of Morris) now in positions of high responsibility, the company began to explore its options. A considerable effort was put into studying the wildly successful mill stores, particularly Cumberland, Rhode Island-based Ann and Hope. The mill stores – Ann and Hope, Mammoth Mart, J.M. Fields and others, shared a common formula for success. With a host of closed, empty textile mills available at dirt-cheap rents, these companies began operation selling mainly clothing, linens and other softlines. Eventually space was leased out to other firms offering such items as shoes, jewelry, tools or appliances, starting the tradition of leased departments in discount stores. As these companies became more prosperous, they began to build their own new stores, either free-standing and/or in shopping centers, allowing much greater visibility along with the many other benefits of custom-built facilities. In a sense, these firms eventually assumed the characteristics of a traditional “chain store” corporate structure.

Having settled on discounting as the logical new direction in which to take their company, the Feldbergs decided to forgo the “mill building” route, preferring to launch with a newly constructed store when the opportunity presented itself. In late 1955, that opportunity came when Stop & Shop, Inc. approached with an offer to build them a store alongside a new Stop & Shop supermarket to be constructed in Hyannis, Massachusetts. In June 1956, the Hyannis Zayre store opened, a whopping 5,000 square feet in size. The store was soon expanded to 7,500 and then 10,000 square feet, and was replaced in 1962 with a 45,000 square foot unit directly behind it. The second Zayre opened in September 1956 in the Roslindale section of Boston, with a much larger footprint of 39,000 square feet. Within a few years, Zayre stores would typically average 70,000 to 90,000 square feet.

Longtime New York Times retail writer Isadore Barmash explained the origin of the chain’s name in a 1985 article – “One day, the Feldbergs and Bert Stern, an advertising consultant, were casting around for possible names for the new operation when Max broke off to take a call. He ended his phone conversation with a typical Jewish phrase: ‘Zehr gut’ or ‘very good.’ Mr. Stern repeated ‘Zehr, where, we need a nice-sounding name.’ The men stared at one another. ‘Zehr – let’s spell it Zayre’ – for very good, they decided.” And thus, Zayre became part of the discounting pantheon.

By 1961, there were fifteen Zayre stores in operation, racking up $50 million in annual sales. Much faster growth would come in the early 1960’s. Zayre was off to a “very good” start, to be sure.

Pictured above is a circa 1962 Zayre store in the standard configuration that so many of us grew up with. Below are exterior and interior shots of the first Zayre store (tiny by comparison) in Hyannis, Massachusetts, shortly after its opening.

Ralphs - Supermarkets, Spanish Style

Ralphs, a SoCal institution with roots extending to the late 19th century, certainly had one of the more interesting beginnings for a retail chain. In 1873, 23-year old San Bernardino County native George A. Ralphs was considered to be the Los Angeles area’s champion bricklayer. A freak hunting accident that year cost him his left arm, forcing Ralphs to abandon his chosen profession. He reset his sights on the grocery business, opening a store at the corner of 6th and Spring Streets. Two years later, Ralphs would be joined by his brother, Walter B. Ralphs. For the next quarter century, the brothers operated the single store, relocating it one block north in 1901 to make way for the Hayward Hotel, which still stands on the original Ralphs store site.

Interestingly, a large percentage (well over half) of Ralphs’ business in their early years consisted of mail order and home delivery of groceries. Much of their in-store trade was done via barter instead of on a cash basis.

In 1909, the company was formally incorporated as Ralphs Grocery Company, and two years afterward they finally opened a second store, located “way out in the country” (as the Los Angeles Times later put it) at the corner of Pico Boulevard and Normandie Avenue. A third store was established at 2601 Pasadena Avenue and a fourth at Vermont Avenue and 35th Street, part of Ralphs’ gradual growth over the next two decades, reaching a tally of ten units by 1928.

Ralphs scored points with customers in 1926 when it took on the Los Angeles “Bread Trust”, a local cartel of bakers who supplied the majority of area grocers. On a fateful Friday, Ralphs was informed that food retailers would be required to raise the price of a loaf of bread from five cents each to a dime. Defiant, Ralphs secured a building that very weekend and installed their own baking equipment. On the following Monday five-cent loaves bearing the Ralphs brand name appeared on the chain’s shelves.

In 1928, the already innovative Ralphs vaulted into the forefront of the industry with the introduction of self-service, a revolutionary development at the time, in its stores. The stores were rearranged and checkstands were installed near the front entrances. Home and mail delivery, longtime staples of Ralphs’ business, were dropped. Most significantly, the company launched a major expansion drive, opening six new, large, beautifully designed stores within a 13-month period. Twelve more stores would follow over the next decade.

To design these stores, Ralphs engaged Los Angeles’ premier architectural firms, including Morgan, Walls and Clements, with the design effort led by Stiles Clements. Russell Collins and W. Horace Austin designed several as well. The stores were built in the Spanish Colonial Revival (or Churrigueresque for you enthusiasts) style, a very popular look for Southern California at the time (and certainly to some extent still). To me, these stores’ amazingly elaborate, exquisite facades are without equal and are of a quality that is typically reserved for buildings of a greater stature than “mere” supermarkets. The sheer expense of the late 20’s/early 30’s Ralphs stores mandated that the design of future stores be simplified, which they of course were. (The Streamline Moderne facades that came a few years later proved to be far more economical.) Sadly, nearly all of the Spanish Revival Ralphs stores are long gone, many torn down in the 1950’s or 60’s to make way for larger, more modern Ralphs units. I’m confident that if these stores still stood today, they would have long since been accorded architectural landmark status.

I would like to extend my very special thanks to the Los Angeles Public Library for the use of these superb photographs, most of which are from their Security Pacific National Bank Collection . The first photo shows the Ralphs store at 6121 W. Pico Blvd in Los Angeles, designed by Russell Collins and opened in fall 1931. The photo itself was taken in 1945. The large rectangular sign atop the store is typical of those added to many Ralphs stores in the late 30’s. The second photo shows the Long Beach Ralphs, 2024 E. 19th Street, opened in 1931. This store was designed by W. Horace Austin. The third photo shows the 5711 Hollywood Blvd. store in a photo taken by Moss Photo shortly after its 1929 opening. The fourth photo, taken by Herman Schultheis, shows the same Hollywood Blvd. store, equipped with a larger sign and two new neighbors, including a new A&P store (!) directly to the left. Without knowing better, I think it’s safe to say that this particular A&P must have struggled to compete with its much more attractive next door neighbor. The fifth photo, taken by Luckhaus Studio, shows the 5615-23 Wilshire Blvd. Ralphs, designed by Morgan, Walls and Clements just after its 1929 opening. It’s amazing to see the open space around this store, which in time would find itself in the thick of one of the most fashionable, prosperous and densely built-up strips (Wilshire Boulevard) to be found anywhere. And how about those oil wells in the background! The sixth photo, photographer unknown, shows the same store from another angle. The seventh photo, from 1929, shows the new Chapman Park Market at 3465 W. Sixth Street. In 1933, The Market would be taken over and operated by Ralphs, whose signs would then grace the smaller tower to the right. This gem, also designed in the Spanish Revival style by Morgan, Walls and Clements, still stands. The final photo, from 1886 and photographer unknown, shows Ralphs brand new store, replacing the original 1873 store on the same site. George Ralphs stands out front leaning on a stack of boxes and his brother Walter can be seen in his shirtsleeves.