Fighting Inflation at Alpha Beta

Here’s a wonderful set of photos featuring two stores from one of Southern California’s most fondly remembered supermarket chains – the late, lamented Alpha Beta. The photos were taken in the early 70’s by Werner Weiss, webmaster of the Yesterland website, a superb tribute to the early years of Disneyland. Yesterland, one of the most celebrated and influential nostalgia sites on the web, marked its 20th anniversary online last year. Though Alpha Beta had stores all over SoCal (and several in other regions as well), these were both located in “The O.C.” – Orange County, Alpha Beta’s home turf.

What can you say about the store in the first photo, other than it was a stone cold 1950’s classic? Opened in June, 1958 in the Hillview section of Santa Ana, at 17^th Street and Tustin Avenue, this store, with its massive pylon and iconic “Alphy” sign, perfectly exuded the optimism, excitement and humor of the “anything is possible” postwar Southern California. The store didn’t seem much worse for wear sixteen years later, in 1974, when this photo was shot, but you’d have to think it looked more natural with a parking lot full of tailfins.

The rest of the photos are interior shots from the Alpha Beta store in Huntington Beach, at the corner of Brookhurst Street and Hamilton Avenue. I haven’t been able to verify the exact opening year of this store (Alpha Beta’s “No. 126”), but according to Werner, who worked there in college and took these photos in the fall of 1972, it was a new store then. The store sports the “ranch style” roofline that Alpha Beta had favored since the mid-sixties.

What strikes me the most about these photos, even the one of the older store, is how reflective the scenes are of 1972-74 American life, due to the overwhelming presence of one word - “discount” – plastered all over the interior of the store, and in huge letters across the storefront windows.

These were the years when new words and phrases began to creep their way into dinner table conversations across the country: “inflation”, “cost of living” and “Consumer Price Index”, for example, because these things were directly affecting what was on the dinner table. It was an era of rampant, unprecedented inflation, when consumer dollars seemed to shrink by the week. Despite some fairly extreme governmental steps taken to stem the tide (a wage-price freeze, dollar devaluation, etc.), it continued for years.

The scene that evokes this strongest for me personally is in the fifth photo down, the “new ideas” display, with boxes of Tuna Helper, in three glorious flavors, clearly visible on the second shelf. My family ate so much of this stuff (and its sister meal enhancer, Hamburger Helper) in those years that I still feel General Mills should have awarded us a walnut plaque with a golden Betty Crocker spoon mounted to it.

In response to the situation, the major supermarket chains, including such Western-based heavyweights as Safeway, welterweights such as Albertsons, and more regionalized operations like Alpha Beta (then a division of a middleweight, Philly-based Acme Markets) practically fell over themselves trying to attach the word “discount” to their storied names. Certainly this was a national trend, however, with appended names galore - Acme “Super Saver” stores, Food Fair’s accelerated conversion to “Pantry Pride Discount Foods”, and numerous others. Then there was A&P’s disastrous WEO (“Where Economy Originates”) program, but that’s a saga unto itself.

But there had been a precedent for this not that many years before, however. The early 70’s weren’t the first time the major food chains were forced to respond to an economic pinch. There was a dry run of sorts in the fall of 1966, when consumer complaints about supermarket pricing galvanized into a national movement, with boycotts occurring at stores across the country. Numerous press photos exist of bouffanted housewives carrying protest signs, a scene that led some in the press to coin the unfortunate term “girlcott” (Ugh.) to describe the situation.

The 1966 boycotts were short-lived, but in their aftermath, a number of chains experimented with standalone discount formats. Alpha Beta was one of them, with their experimental “Fad” (“food at discount” – nifty, right?) stores. Concerned about price competitiveness but unwilling to risk the Alpha Beta name on a discount venture, the first Fad store, a converted Alpha Beta unit, was opened in Costa Mesa in April 1967.

The location was chosen for its very close proximity to another Alpha Beta store, allowing the company to compare shopping patterns at the two stores and to answer the following questions, as outlined in Esther Cramer’s great book The Alpha Beta Story: “Would the housewife change her shopping habits if operating hours were reduced and games and giveaways were eliminated? Would the volume of sales increase to the necessary level if prices were lowered?” The answers, as it turned out, were “yes”.

As a result, three additional Fad stores were opened that year, followed by yet three more in 1968. Most importantly, it led to a change in pricing policy for the main Alpha Beta stores, which was rolled out in two phases – discounting of all health and beauty items effective in September 1967, and discounting across the entire store effective New Year’s Day 1968. Trading stamps and other promotional gimmicks were dropped, and even the famous tagline on their signs was changed, from “First in Foods” to “Best for Less”. In September 1971, having applied the lessons learned, the Fad name was discontinued and the (by then 11) Fad stores were converted to garden variety Alpha Betas.

So bargain-based grocery shopping turned out to be anything but a fad.

My thanks again to Werner Weiss for letting me know about his wonderful photos, and to the Orange County Archives for making them available. And for those who are curious about what the Fad stores looked like, here’s a typical example from a circa 1967 Alpha Beta Acme Markets promotional photo. 

Wards Strikes Up the Band

The weather couldn’t have been better on this sunny, sparkling Southern California afternoon. Excitement was in the air as the crowds gathered in. A speakers’ platform was in place, replete with the American flag and a group of men in suits, ties, carnations and broad smiles, beginning to take their seats near the dais. Soon the customary civic welcomes and corporate pledges would take place. And there would be special entertainment that day - the Disneyland Band was there! The whole unit, looking sharp in their bright orange uniforms, on a rare five-mile trek outside the gates of the Happiest Place on Earth. The real star of the show was the brand new Montgomery Ward store behind the stage – sporting a smart, modern look with a textured façade, three-toned sign and zig-zag awning. For a few hours that afternoon, it had to be the happiest store on earth. The date was August 11, 1960, and the place was the Honer Plaza Shopping Center, located at the corner of 17th and Bristol, in Santa Ana, California.

The opening of this store marked the five-year point of a complete reinvention of Wards’ image, which began with the forced resignation of longtime company chairman Sewell Avery. Cash-rich but moribund from a retail standpoint in 1955, the company’s leadership change became evident to the buying public two years later when Wards, whose store base had long consisted of aging urban and rural downtown units, began to open large, modern stores in the country’s storied suburban shopping centers.

Driving this expansion was Montgomery Ward chairman John Andrew Barr, who took the company reins after Avery’s ouster. Barr, a 20-plus year Wards veteran, came up through the ranks of the company’s legal department and was a rare individual in that he was neither fired nor driven away by Avery’s dictatorial manner, in a company notorious for massive turnover of upper management ranks. Author Booton Herndon, in his lively book “Satisfaction Guaranteed”, a 1972 history (and then-current portrait) of Wards, notes that company executives in the bad years seemed to profess a certain pride in the dubious honor that Wards had “trained” many of their competitors’ top people.

By any measure, Wards’ new store program was ambitious – according to a November 1960 Fortune magazine article, five new stores were opened in 1958, twelve more in 1959 and twenty-one more in 1960, mostly large, shopping center-based units. The article also sheds light on Wards’ store location strategy, which centered on locating stores in clusters within a specific market area, in order to be able to service the stores from centrally-located distribution centers (with the important additional benefit of maximizing the effectiveness of TV and newspaper advertising).

The market areas cited in the Fortune article were: “Detroit, Kansas City, San Francisco, San Diego, Phoenix, St.Petersburg-Tampa, Houston (and) Dallas-Fort Worth”. A carefully-selected set of markets that left many regions untouched, to be sure, but fleeing time and limited resources forced Wards to pick their targets carefully. Noticeably missing from this list is Wards’ home market of Chicago, where instead of opening new stores, Barr opted for an acquisition instead – In 1957, Montgomery Ward bought out The Fair, an old-line department store chain with a downtown State Street flagship and three suburban locations. Nonetheless, those fortunate enough to live in one of Wards’ chosen expansion areas were likely thrilled to have the gleaming new stores as a shopping option.

Five years of the “New Wards Era” and nearly three years of new store openings brought things to that August 1960 opening at Honer Plaza, where the light atmosphere became very heavy, for a while at least. The previous night, at a dinner held in Santa Ana for Wards stockholders and other dignitaries, Chairman Barr dropped a bomb. He announced, as Fortune later put it, “that the earnings prospects for the full fiscal year 1960 (to the end of January, 1961) were for a new low in the company’s postwar history”. The herculean effort, the new attitude and image, the beautiful new stores all appeared not to be paying off. (At this point in the evening, I would have said “Allriiiiight, waddaya say we bring the Disneyland Band out here? C’mon, everybody dance!! But that’s just me.)

To his credit, Barr had long realized the need for an infusion of top retail talent into Wards’ decimated ranks. For some odd, unexplained reason, the company’s board of directors had forbidden Barr to look to the one place that matched Wards’ business most closely – Sears, Roebuck and Company. (Although J.C. Penney had already surpassed Wards in sales by 1961, it would be a few more years before their business model fully lined up with Wards’, as Penney yet had no catalog operation and still sold mostly soft goods in their stores. By late 1963, Penney was in the catalog business as well and had also begun to open full line stores, complete with appliance sales and auto centers.) The Honer Plaza news was enough to get the Wards board to drop the needless restriction, though, so to Sears’ executives, current and former, Barr went a-calling.

Amidst all of this, rumors of a merger began to fly. In the fall of 1961, news accounts began to carry the story of a marriage between Montgomery Ward and Interstate Department Stores, Inc. as having all the earmarks of a done deal. Interstate, headed by Sol Cantor, was white-hot at the time - a formerly staid department store operator that was scoring big with newly-acquired discount chains on both coasts – White Front in Southern California and Topps in the East and more recently, Chicago. As quickly as it came about, however, talk of a Wards/Interstate merger fizzled. One reason for this, as Time magazine related after the fact, was that Cantor was miffed at being left out of the selection process of Wards’ new president.

In early November 1961, Barr announced he had chosen Robert E. “Tom” Brooker, a former Sears executive and since 1958, chairman of Whirlpool, the appliance manufacturing giant. Brooker, a one-time protégé (and according to author Herndon, bridge-playing partner) of legendary Sears head General Robert E. Wood, had been Sears’ vice president of manufacturing. This position didn’t even exist at Wards, marking a key difference between the two companies. Sears routinely held large investment stakes in their manufacturing suppliers as a means of implementing changes they desired, or shoring up weak operations. Oftentimes Sears would keep majority ownership of a manufacturer for years on end. (A popular business topic of modern times concerns the power that a certain well-known mass retailer wields over its manufacturing suppliers. In my opinion, Sears’ power back in the day was every bit as great, if not more so.) The Whirlpool Corporation, as it existed at the time, was largely the result of mergers engineered by Brooker from behind his desk at Sears. Montgomery Ward, by comparison, very rarely took an ownership stake in their suppliers.

Beyond Brooker’s years of high-level experience with Sears and his peerless ability to deal with suppliers, he projected an air of exceptional confidence that would prove essential to Wards’ survival. Indeed, immediately upon taking office, Brooker purchased a million dollars’ worth of Montgomery Ward stock, making him the company’s largest individual shareholder. Brooker accepted the Montgomery Ward presidency with the understanding that he would be in charge, and that was the case almost immediately, although initial press reports, including Time magazine’s, characterized the relationship between Brooker and chairman Barr as “on a par”. John Barr would stay on as Montgomery Ward chairman until 1965, when he resigned to take the reins of Northwestern University’s business school. There, Barr made the controversial decision to close down Northwestern’s undergraduate business program in order to focus the school’s resources on their graduate business school, which he also opened to women for the first time in its history. Under Barr’s tenure, the program (now called the Kellogg School of Management) became one of the most prestigious in its category, a distinction it continues to enjoy today.

Tom Brooker, of course, had his hands full keeping Wards on the road to recovery. To aid in the battle, he wooed a number of key people from Sears, none more important that Edward S. Donnell, who ran Sears’ Los Angeles territory, their hottest market area by a wide margin. Donnell, who himself had a reasonable shot at reaching Sears’ "mahogany row" within a few years was convinced by Brooker’s enthusiasm to forsake the ideal climes of SoCal and move to Baltimore to run Wards’ entire East Coast region. Within a couple of years, Donnell moved to Chicago, promoted to the number-two spot in the company. More Sears faces would appear at Montgomery Ward headquarters over the next several years. The aggressive building program would continue, with the sails trimmed back just a bit.

Would things get better for Wards? Yes, they would. But there would be times when they probably wished the Disneyland Band was waiting in the wings.

The pictures are Montgomery Ward publicity photos unless otherwise noted. The first store pictured was located in San Antonio, Texas, at the Wonderland Shopping Center (not to be confused with the Livonia, MI-based mall of the same name), and opened in 1963. Known in recent years as “Crossroads Mall”, it reverted to the Wonderland name earlier this year. Second up the Wards store at Houston’s Northline Shopping Center, which opened in 1960 and predated the mall itself by a couple of years. Third, a 1961 American Olean tile advertising photo which only identifies the store as a “Houston, Texas location”, which I believe to be the free-standing unit that was located across the street from the Palm Center shopping complex. Fourth, from 1962 and again from San Antonio, the new McCreless Shopping Center, complete with Photoshopped cars in the parking lot. (Wait, we‘re talking about 1962, right? I should have said “pasted-up cars” instead.) Fifth, from a 1963 Plexiglas ad, the famous Apache Plaza location, St. Anthony Village (Minneapolis), Minnesota. Lastly, the Honer Plaza location as it appeared on that exciting/exasperating 1960 summer day.

Thriftimart Class of '63

By the early 1960's, some new Thriftimarts featured toned-down "T's", possibly owing to zoning or cost reasons. Even so, the stores provided very nice examples of mid-century modern supermarket design, as these photos of new units from 1963 attest. The first photo is of a Santa Ana store (1308 Edinger Street), the second is from 1117 Los Angeles Ave., Simi Valley.