Great Atlantic & Pacific Tea Company

A&P's tremendous growth created problems with suppliers. Cream of Wheat, the largest breakfast food manufacturer, demanded that all retailers adhere to the cereal's pricing per box. A&P purchased the product at wholesale, 11 cents per box (3 cents less), and decided that a 1-cent markup was appropriate for its economy store format. Cream of Wheat cut off supplies and A&P sued. U.S. District Court Judge Charles Hough ruled against A&P, saying that a manufacturer can establish retail prices. As a result, A&P and other large chains expanded manufacturing of private brands.

Hartford Sr. died in 1917; control of the company passed into a trust with his sons George, Edward, and John as trustees in complete control.

Adding stores that included grocery, meat, produce, and dairy

After World War I, A&P rapidly expanded; in 1925 it operated 13,961 stores. The newer combination stores included space for meats, produce, and dairy, as well as traditional grocery items. Sales reached $400 million and profit was $10 million. However, the Hartford brothers were concerned that gross margins had reached 22% to cover higher costs and that the chain veered from its low-cost discipline. In early 1926, the brothers discussed the situation with division management and launched a program to lower prices and improve cost controls. That year, sales increased 32%; A&P moved its headquarters to the new Graybar Building adjacent to Grand Central Terminal.

In 1927, A&P established a Canadian division; by 1929 it operated 200 stores in Ontario and Quebec. In 1930, the corporation's 16,000 stores reached $2.9 billion (~$43.2 billion in 2024) in sales, resulting in a 25% grocery-store share in its operating areas, and about 10% nationwide. No retail company had ever achieved these results. A&P was twice as large as the next largest retailer, Sears, and four times that of grocer Kroger. Unlike most of its competitors, A&P was in excellent position to weather the Great Depression. The Hartfords built their chain without borrowing; their low-price format resulted in even higher sales. From 1929 through 1932, A&P reported a record $110 million in after-tax profits with each Hartford child earning over $5 million yearly in dividends and equity.

A&P's success caused a backlash that threatened to destroy it. Thousands of mom-and-pop grocery stores could not match A&P's prices. While small operators had little political clout, they were supplied by thousands of wholesale distributors which had considerable political influence. Anti-chain store movements gained traction in the 1920s, but became stronger during the Depression. In 1935, Texas Congressman Wright Patman introduced legislation that would have levied a federal tax on chain stores. If adopted, this legislation likely would have ended A&P.

While this legislation did not move in Congress, in 1936 Patman sponsored the Robinson–Patman Act that outlawed charging different prices to similar customers; this law passed. Patman then reintroduced his first bill. A&P retained a lobbyist and dropped its opposition to unionizing activities of the politically powerful American Federation of Labor (AFL). George and John Hartford also took the unusual step of publishing an open letter pointing out that the legislation would increase food prices. The tide of public opinion then turned against the bill, which was defeated.

Converting to supermarkets

In 1930, the first supermarket opened in California. On the East Coast, Michael J. Cullen, a then-former A&P employee, opened his first King Kullen supermarket in Jamaica, Queens. Two years later, Big Bear opened in Elizabeth, New Jersey, and quickly equaled the sales of 100 A&Ps. In 1933, A&P's sales dropped 19%, to $820 million, because of the competition. After considerable debate, the Hartford brothers decided to open 100 supermarkets, the first of which was in Braddock, Pennsylvania. The new stores proved to be very successful; in 1938, the company operated 1,100 supermarkets. The chain continued to build supermarkets and slowly phase out smaller stores except in dense urban areas; in 1950, A&P operated 4,000 supermarkets and 500 smaller stores. Sales reached $3.2 billion with an after-tax profit of $32 million.

A&P's success attracted the attention of President Franklin D. Roosevelt's anti-trust chief, Thurman Arnold, who was urged by Representative Wright Patman to investigate A&P. In 1942, A&P and their senior executives—including the Hartford brothers—were criminally charged for restraint of trade in Dallas federal court. In 1944, prosecutors withdrew the complaint on grounds that the Dallas federal judge thought the case was weak.

The same day the Dallas case was withdrawn, charges were filed in Danville, Illinois against the same defendants, and were assigned to Federal Judge Walter Lindley. The prosecution complained that A&P had an unfair competitive advantage because their vertical integration—including manufacturing, warehousing, and retailing—allowed them to charge lower prices. Prosecutors also complained that A&P refused to buy from food retailers who sold only through brokers or refused to give A&P advertising allowances. The judges contended that if unchecked, A&P would become a monopoly. A&P said their grocery-store share was only about 15%, much less than the leaders in other industries. Judge Lindley agreed with the government, fining each defendant $10,000.

In 1949, the U.S. Court of Appeals upheld Lindley's decision; A&P decided not to appeal further. In September, the anti-trust division asked the court to order the spinoff of A&P's manufacturing operations and the breakup of A&P's retail operations into seven independent companies. Thousands of letters poured into the Justice Department supporting A&P; the Hartford brothers gave extensive interviews with Time magazine and appeared on the November 13, 1950, cover. Time wrote that, next to General Motors, A&P sold more goods than any other retailer in the world. John was quoted as saying, "I don't know any grocer who wants to stay small... I don't see how any businessman can limit his growth and stay healthy." The case dragged on into the business-friendly Eisenhower administration. In late 1953, the government agreed to drop its demands to break up A&P if they shut down their produce brokerage that also supplied competitors.

In fighting the anti-trust suits, A&P also emphasized the considerable impact of their activities on the public welfare, which had been recognized as the legacy of George Hartford Sr. and his sons. The concepts pioneered and perfected by the Hartfords and their competitors enabled the public to enjoy healthier eating at lower cost. In 1950, the average American consumed 10 percent more food than in 1930, with poorer households enjoying an especially important improvement in the quality of the food they consumed. John Kenneth Galbraith supported this contention in his 1952 book American Capitalism by citing A&P as an example of countervailing power. To support his thesis, he discussed a 1937 A&P study of the feasibility of opening a plant to manufacture corn flakes. The mere possibility of A&P producing corn flakes forced existing corn flake manufacturers to lower their prices by 10%.

1951–1974: Post-Hartford era

In 1951, John Hartford died in the Chrysler Building after returning from a meeting of the automaker's board of directors. George remained as A&P's chairman and treasurer, appointing the corporation's longtime secretary Ralph Burger as its new president. While Burger started with A&P in 1910 as a clerk in Glens Falls, New York, he was a staffer who lacked John Hartford's strategic marketing skills. Under Burger, A&P continued to report record sales and operated with expenses of 12.6% of sales when the industry average was 15%.

Burger was also president of the John A. Hartford Foundation started by sons John and George in 1929, assuring Burger's control of A&P when George died in 1957. George's trust was dissolved; the stock began selling on the New York Stock Exchange (under the symbol GAP) at $59 per share. For the first time, A&P elected six outside directors onto its board. In late 1961, A&P stock peaked at $70 (~$561.00 in 2024).

The seeds for A&P's 35-year fall from the country's largest grocery to bankruptcy (and later liquidation) were planted in the 1950s:

A&P was starved of capital. While A&P was publicly traded, control rested with Burger, who headed both the corporation and the Hartford Foundation. Most of A&P's profit was declared as dividends to satisfy the income needs of the trust and its heirs. A&P also remained opposed to debt financing; the only source of capital was the depreciation account. While competitors invested in larger, modern supermarkets, A&P was slow to update its retail capital plant. By 1970, A&P stores were considerably smaller and mostly older than those of its competitors.

A&P placed too much emphasis on private label products. In 1951, the Supreme Court ruled that manufacturers could not establish minimum prices unless the retailer agreed to the arrangement. This decision launched a revolution in discount retailing fueled by the rapid increase in television advertising that raised demand for national brands. Contrary to this, A&P invested substantial amounts of its scarce capital to expand manufacturing, including $25 million to construct the world's largest food plant in Horseheads, New York. Because A&P stores were smaller, its shelves were dominated by private-label products, and customers found that national brands were often out of stock.

A&P's labor costs were higher than those of most competitors. Because A&P stopped growing, a rising percentage of its workers were making higher wages due to their seniority. This was not a problem for most of A&P's competitors because they were rapidly expanding and had relatively fewer workers with high seniority. To offset higher labor costs, A&P tried to operate stores with fewer employees, resulting in long lines at checkouts and empty shelves.

Ralph Burger attempted to reverse downward tonnage figures by reintroducing trading stamps, creating A&P's Plaid Stamps. However, by late 1962, the initial sales gains evaporated and the six outside directors threatened to resign unless Burger retired. When Burger left in May 1963, the stock was trading in the $30s (~$315.00 in 2025). Burger was replaced with a succession of presidents who were unable to stem the downward spiral. In 1971, the board turned to William J. Kane, who joined A&P in 1934 as a full-time store clerk. Kane believed that A&P could be turned around by focusing on basic store operations, including cleanliness, product availability, customer service, and courtesy.

When his program stalled, Kane implemented a strategy to substantially cut prices by converting A&P to a warehouse store concept that became known as W.E.O. Warehouse Economy Outlet (or Where Economy Originates). The problem was that most A&Ps were not large enough to properly implement the program; losses quickly mounted. In early 1973, the stock dropped to $17, and Charles Bluhdorn of Gulf+Western made a tender offer at $20 per share. Kane rejected the offer, although some stockholders thought that the offer was attractive considering A&P's continuing difficulties. A&P exited California and Washington state in 1971 and 1974, respectively, making Missouri its westernmost reach. In 1974, the corporation also left its long-time headquarters in the Graybar Building, moving to Montvale, New Jersey.

1975–2001: Scott/Wood era

In February 1975, A&P considered a plan by Booz Allen Hamilton to close 36% of its 3,468 stores. Kane agreed to resign and was replaced by Jonathan Scott, the 44-year-old president of Albertsons. Under Scott, A&P closed 1,500 stores in three years, reducing to 1,978 units. Scott hired numerous executives from outside and pushed authority down to the regional level. During his first three years, A&P built 300 supermarkets ranging from 23,000 square feet (2,100 m2) to 32,000 square feet (3,000 m2), along with its first combination grocery-drug stores with 40,000 square feet (3,700 m2) under the A&P Family Mart name. The first Family Mart opened in Greenville, South Carolina, as The Family Mart in 1977.

The Family Mart chain consisted of mostly 40,000–55,000 square feet (3,700–5,100 m2) stores, and were among the first A&P stores to possess a combination of a full-service supermarket and pharmacy. Scott continued Kane's efforts to improve basic store operations (including cleanliness and customer service) instituting a large training program. Weekly per-store sales increased from $37,000 in 1974 to over $70,000 in 1976, with total sales increasing from $6.4 billion to $7.2 billion despite the closures. Manufacturing was also reorganized. While initial results were promising, by 1978, A&P profits started to slide due to economic conditions caused by high inflation.

With the share price down to $7, the John A. Hartford Foundation finally came to the conclusion that it could no longer wait for a turnaround. Erivan Haub, owner of the German Tengelmann Group, expressed interest. Born in 1930, Haub studied retailing in the U.S. after World War II and built his family's grocery business into a 2,000-store chain with annual sales of the equivalent of $2 billion. Although still having a home in Germany, his children were born in the United States.

Haub agreed to pay $7.375 per share for 42% of A&P's stock. Haub also quietly bought other shares until he owned 50.3% in February 1981. Scott did not renew his five-year contract; Haub hired James Wood to become chairman. Wood, an Englishman who was the same age as Haub, previously ran the American Grand Union supermarket chain. Many executives recruited by Scott left A&P; they were replaced by Wood's associates from Grand Union.

Futurestore

During the Wood era, A&P developed the "Futurestore" concept; these supermarkets used black-and-white decor. Family Mart would serve as the testbed for the concept design.

Futurestore was one of two concepts A&P launched during the 1980s (the other being Sav-A-Center; also defunct). Futurestore's first supermarket was in the New Orleans area in 1984, where A&P converted two Kroger stores it had acquired. The first conversion of an A&P to the Futurestore format was in New Jersey in 1985.

The Futurestore concept spread to A&Ps in the southeastern US, plus its traditional Mid-Atlantic region (operating in the Philadelphia area under the Super Fresh name), but, in the late 1980s, all Futurestores had been re-branded, or closed.

Like its sibling supermarket, Sav-A-Center, A&P Futurestore was identified by its features and color scheme. The Futurestore interior was black and white, compared to the green and white of Sav-A-Center stores. Most Futurestores also had a glass atrium storefront. In addition, Futurestore signage featured pictograms, similar to those of European supermarkets.

Futurestores typically offered the latest in gourmet departments and electronic services in exclusive neighborhoods. Futurestore's amenities were more gourmet- and specialty-oriented than found at a traditional A&P or Sav-A-Center supermarket. Futurestores also had more modern fixtures and machinery than A&Ps had at the time.

Since the concept was never adopted for a widespread rollout, A&P phased out the Futurestore nameplate, closing some stores and converting others to A&P or Sav-A-Center. Many customers felt Futurestore did not have the same panache of other upscale food retailers, which not only offered more gourmet products, but also cooked and delivered it. A&P, however, did not immediately change the interior of the Futurestores, unlike its Sav-A-Centers, after A&P began to rebrand them as A&P Food Markets in the 1990s.

Pharmacies

In the mid-1990s, A&P began adding pharmacies, concentrating on building units of 45,000 square feet (4,200 m2) to 65,000 square feet (6,000 m2).

Overseas ventures

In the early 1980s there was discussion for A&P to open a store in Saudi Arabia. A&P Preservation reported in March 2018 that A&P did open a store in Saudi Arabia, in Riyadh. Tengelmann Representative Petra Czech says that the name was licensed to Saudi operators. The store was most likely converted to the Saudi rendition of Safeway.

Store names

For most of its history, A&P operated its stores under that name. That changed during the Scott and Wood eras when A&P created chains, or used the original names of acquired chains. The following were A&P's retail operations under a different name:

Family Mart: Started in 1977, this chain of large grocery stores/pharmacies was based on similar units built by Skaggs-Albertson's when A&P Chairman Scott worked for the latter. Initially successful, within 10 years Family Mart opened 28 units in Alabama, Florida, Georgia, and the Carolinas. The 18 Family Marts in Florida were sold in 1987 and the remaining Family Marts were closed by 1999.

Plus: In Germany, Tengelmann operated many small stores under the Plus name, focusing on low-cost no-frills operations. After acquiring a majority stake of A&P, Tengelmann converted some of A&P's smaller stores to the Plus concept.

Super Fresh: When A&P announced the closure of its Philadelphia division (which included Delaware, Maryland, and southern New Jersey) during the 1981–82 restructuring, the unions offered to buy many of these stores. A&P agreed; the corporation and the unions settled on a new labor agreement that included a profit-sharing provision. The agreement also called for the stores to be operated under a new name, Super Fresh. These stores proved to be profitable, and in 1986 the name was extended to supermarkets in the District of Columbia, and Virginia; the latter included Richmond-area Pantry Pride stores A&P purchased in 1981. Super Fresh stores were still in operation when A&P began liquidation. In the subsequent auction, Super Fresh brand was acquired by Key Food and later re-launched, primarily in and around Newark, New Jersey, rather than its original Philadelphia footprint.

Food Basics (US & CA): In the early 2000s when the recession was hitting formerly prominent middle class areas, A&P had recorded record losses for stores in New Jersey suburbs such as Paterson, North Bergen, and Glassboro. A&P quickly turned around these unprofitable stores into a no-frills supermarket, called Food Basics. It offered the bare staples in the grocery department at a lower price. The stores featured both the America's Choice and Food Basics storebrands, as well as the normal name brand items other A&P-owned stores sold. By 2010, Food Basics operated more than a dozen stores in lower-class New Jersey cities, and several Super Fresh-turned-Food Basics stores in Central Philadelphia. The stores had no service departments except for a service deli. All other meats, seafood, and baked goods were produced off-premises, which cut A&P's labor costs in these stores by more than 50%, by taking out the higher-paying jobs of a butcher and baker, and replacing them with more stock clerks and cashiers.

Kohl's Food Stores: A&P acquired the Wisconsin-based Kohl's Food Stores in 1983 after closing A&P's large Chicago division in 1982. The first Kohl's opened in 1946; during the 1960s it expanded into department stores. In 1972, Kohl's was purchased by British American Tobacco, which decided to spin off the grocery stores to A&P a decade later. A&P closed Kohl's Food Stores in 2003.

Dominion (Canada): In 1985, A&P acquired the Dominion chain in Canada, consisting of 92 supermarkets, 2 warehouses, and an office complex. Dominion was sold in 2005.

Ultra Food & Drug / Miracle Mart / The Barn Markets (Canada): A&P acquired these two supermarket chains in Canada, and operated them until the chain's demise in the early 2000s, and operated out of the same store styles of its counterparts.

The Food Emporium: Also in 1985, this 26-store New York City-based chain was acquired by A&P. Founded in 1919 as Daitch Crystal Dairies (later becoming Shopwell Supermarkets), the chain peaked at 103 stores in 1962. In the late 1970s and early 1980s, Shopwell closed many of its stores and changed its name to The Food Emporium to focus on affluent areas. Food Emporium stores were still in operation through A&P's liquidation; Key Food acquired The Food Emporium and four stores, along with the Super Fresh brand, in the liquidation, maintaining use of the brands today.

Waldbaum's was acquired in 1986. The New York City-based chain was founded in 1904 and opened its first supermarket in 1951. The company quickly expanded from the city into Nassau and Suffolk counties, and later into Connecticut and Massachusetts. In the early 2000s, A&P operated 80 Waldbaum's in southernmost New York state (outside Manhattan). Many Waldbaum's were still in operation when the company started liquidation, mainly in the Long Island area.

Farmer Jack was a 79-store supermarket chain based in Detroit; it was purchased by A&P in 1989. Farmer Jack started in 1924; in the mid-1950s its name was changed to Borman's. These stores were renamed Farmer Jack in the late 1960s. In 1987, Farmer Jack was depleted of cash in a lengthy strike; it was sold in 1989 to A&P for $76 million. Within five years, all A&Ps in the Detroit area were converted to Farmer Jack, as were some A&Ps in Virginia and South Carolina. By 2007, all Farmer Jack stores were sold or closed.

Sav-A-Center: The Sav-A-Center name was first used for a chain of 20 supermarkets in the greater New Orleans, Louisiana, area. The division operated throughout Louisiana, and had two stores in Mississippi. In addition, the Sav-A-Center division included three regular A&P stores, one of which was a small "corner grocery" in the French Quarter of New Orleans that A&P had been operating since 1931. By August 2005, Sav-A-Center operated primarily in the Baton Rouge and New Orleans metropolitan areas, and along the Mississippi Gulf Coast. Many stores sustained damage as a result of Hurricane Katrina. Twenty-one stores reopened within a few months of the storm; two others following remodeling to repair flood damage. Five stores were closed permanently due to severe damage to the stores and surrounding areas. In April 2007, the chain exited the Baton Rouge area. On May 30, 2007, A&P confirmed that it was planning to exit the New Orleans area, and was seeking buyers for its 20 remaining Sav-A-Center stores. A&P said the company cited its decision to focus on its remaining operations in the Northeast, where it operated the majority of its stores. It was announced in September 2007 that the remaining Sav-A-Center stores would be sold to the locally owned Rouses chain. Rouses took over 16 Sav-A-Center stores, including the Mississippi stores and the French Quarter A&P, sold one to competing chain Breaux Mart, and closed the others.

Pathmark was a large New York-area chain that was one of A&P's major competitors when it was acquired in 2007. Pathmark, originally known as Supermarkets General, was formed in 1956 as a subgroup of the Wakefern co-operative known as ShopRite. When Supermarkets General broke from ShopRite in 1968, it converted its 81 stores to Pathmark. By 1977, Pathmark started to build larger stores with pharmacies. To overcome a hostile takeover in 1987, Pathmark's management instituted a leveraged buyout of $2.7 billion that committed it to make large debt payments. In 2000, Pathmark entered bankruptcy; after it was reorganized, Yucaipa Holding purchased 40% of Pathmark for $150 million. At the time of its 2007 purchase by A&P, Pathmark operated 141 stores and had a capitalization of $634 million. Many Pathmark stores were still in operation when A&P began liquidation. The brand has been sold to Foodtown, and in April 2019, a revived Pathmark (owned by Allegiance Retail Services) had opened in the East Flatbush section of Brooklyn.

Private brands

When A&P was founded, there were no branded food products, and retailers sold food commodities in bulk. In 1870, the company became among the first to sell a branded pre-packaged food product, introducing "Thea-Necter" brand tea. In 1885, the name "A&P" was introduced on baking powder containers. Also in the 1880s, the company adopted the name "Eight-O'Clock" for its coffee. When A&P moved its headquarters to Jersey City, New Jersey, in 1907, it included a bakery and coffee-roasting operation.

A&P's evolution into one of the country's largest food manufacturers was the result of the 1915 court decision in the Cream of Wheat litigation that upheld the right of a manufacturer to set retail prices. To keep prices down, A&P put emphasis on private label goods. By 1962, A&P operated 67 plants before consolidating many of them into the 1.5 million-square foot Horseheads facility, which was the largest food manufacturing plant in the world under one roof. In his 1952 book American Capitalism, John Kenneth Galbraith cited A&P's manufacturing strategy as a classic example of countervailing power that was a welcome alternative to state price controls.

As late as 1977, private label represented 25% of A&P's sales, with A&P manufactured products accounting for over 40% of this total. That year, A&P manufacturing reported sales of $750 million from its 23 plants(which by itself would have ranked A&P's manufacturing group at about number 350 in the Fortune 500).

Until the creation of a combined Manufacturing Group in 1975, the corporation's production operations were conducted by four separate divisions:

Bakery (Grandmother's, Marvel, and Jane Parker): Until 1923, Jersey City was A&P's only bakery. A&P rapidly expanded the division until it was America's largest baker, with 37 plants. By 1977, the number of bakeries was reduced to seven; the division was closed during the 1981–82 restructuring. A Canadian baker continued to make Jane Parker cakes, but went bankrupt in 2014. Alex and Chris Ronacher took over the rights in 2016.

Coffee (Eight O'Clock, Bokar, Red Circle): In 1919, A&P consolidated its coffee business into the "American Coffee Company", building roasting and grinding facilities. By 1977, A&P owned three coffee roasting plants, and one for canned coffee. The coffee operation survived the 1981–82 restructuring, not sold until 2003.

Dairy: This division dates to 1922 when A&P purchased the White House Milk Company of West Bend, Wisconsin, to produce evaporated milk. At that time, grocers rarely sold fresh milk because of the lack of refrigeration. By 1977, the division operated three dairies, a cheese plant, and a dry milk plant.

Grocery (Quaker Maid, Ann Page, Our Own Tea): In 1907, A&P opened a vegetable cannery. After World War I, A&P took advantage of the collapse of canned salmon prices to acquire canneries in Alaska. A&P then acquired facilities to produce a wide range of canned goods, frozen foods, nuts, tea bags, pasta, peanut butter, detergents, insecticides, gelatin, paper goods, and candy. A&P also operated a printing plant to produce labels and packaging for the other facilities, and promotional material for the stores. By 1977, A&P operated the Horseheads plant, plus six smaller facilities.

In the mid-1990s, A&P introduced a new simplified store brand called America's Choice, which would last until the chain's demise in 2015. (In Canada, the brand was called "Master Choice". This same branding was used for A&P's gourmet items in its U.S. stores.)

In 2008 and 2009, the corporation added the environmentally-sensitive Green Way brand, gourmet Food Emporium Trading Company brand, and low-cost Food Basics alternative.