The Great A&P and the Struggle for Small Business in America Read online

  American Grocer, of course, was not a disinterested party. Great American’s advertising consistently attacked the importers, tea merchants, and wholesale grocers who extracted profits from the tea trade while delaying the delivery of fresh tea to the consumer. Those middlemen were American Grocer’s advertisers, whose business was being undercut by mail-order sales.

  The Great Atlantic & Pacific Tea Company developed into an entirely different sort of business from its precursor. Great American’s mail-order business and its eleven tea shops in New York dealt entirely in bulk teas and coffees, indistinguishable from those of its competitors. Great Atlantic & Pacific, in contrast, startled the tea trade in 1870, a few months after its creation, by launching a radically different product, a branded tea. Thea-Nectar was said to contain a unique mixture of teas that were dried on porcelain, with no coloring or impurities. Unlike other teas, which came loose, Thea-Nectar was sold prepackaged, in half-pound or pound boxes. It was supported by an unusual marketing campaign, with newspaper advertisements far larger than the standard few lines of agate type. “Thea-Nectar is a pure black tea with the Green Tea flavor,” the ads proclaimed. Unlike any other tea on the market, Thea-Nectar was exclusive, available only from the Great Atlantic & Pacific Tea Company.12

  A brand-name tea was an extraordinary product to bring to market in 1870. At the time, consumers had access to few branded products of any sort, save patent medicines. Almost everything offered in grocery stores, from flour to pickles, was purchased by the shopkeeper in bulk and sold from barrels or canisters, with the store clerk measuring out the quantity the customer desired. The widespread sale of brand-name foods in sealed packages was still two decades in the future. It was only in 1870 that Congress enacted a law allowing businesses to register and protect trademarks such as Thea-Nectar—and when it did so, advertisements announced that “the Great Atlantic & Pacific Tea Company have secured by congress the exclusive right to sell in this country, Thea-Nectar,” distinctly implying that its product enjoyed some special imprimatur. With his branded tea, George Gilman was once again on the leading edge of a revolution in marketing.13

  And once again, the reaction from those threatened by Gilman’s marketing prowess was swift. In the autumn of 1870, American Grocer published a four-part article purporting to reveal the truth about the “unprincipled monopolists” seeking “to control the vast retail business throughout the country.” Without naming names, American Grocer dissected a Great Atlantic & Pacific advertisement claiming that company representatives visited the tea-growing districts of China and Japan to oversee the selection and curing of the choicest teas. In fact, said the newspaper, it had found no record of this company ever importing a single cargo of tea. “By diligent inquiry, we have ascertained that this Company never personally visited any tea district except that in the immediate vicinity of Wall and Water streets of this city, and the auction sales where damaged teas are disposed of.” Fewer damaged teas are coming to auction than in the past, American Grocer claimed; instead, these “wet and damaged teas” are bought directly from importers for as little as seven cents a pound, “and afterward dried, colored and repacked, and sold to the consumer for ninety cents.” The result, the newspaper claimed, was “to draw away the trade which rightfully belongs to the retail merchant in the different towns where these teas are sold.”14

  Some of those allegations almost certainly were true. There is no evidence that Great American and Great Atlantic & Pacific imported anything during this period, much less that they had “correspondents in China and Japan,” as their advertisements stated. As Abram Wakeman recalled later, Gilman bought most of his teas through the New York house where Wakeman worked. The claim that Gilman sold adulterated teas is credible because adulteration was extremely common, but there is no reason to think Gilman’s teas were notably less pure than those offered by the wholesalers advertising in American Grocer. If the teas were inferior, customers seem not to have noticed. Yet if its complaints about the quality of Gilman’s products were exaggerated, American Grocer’s grasp of the implications of his business strategy was insightful. “If this can be done so successfully with teas … it can be done in other lines of goods of universal demand,” the newspaper warned. On that score, the newspaper would soon be proved right.15

  Around 1871, Gilman unveiled yet another innovation in marketing: the premium. Chromolithographs—mass-produced colored pictures—had been invented in the 1830s, and after the Civil War they became wildly popular in America, decorating many kitchens and parlors. Great American and Great Atlantic & Pacific began offering chromos as gifts with every purchase of tea or coffee. When other tea companies followed suit, the competition escalated from individual chromos to series on themes such as sporting events and U.S. presidents. The wealthy sometimes framed them, the poor simply tacked them to the walls. But collecting chromos soon lost its novelty. “People do not go there [to the tea store] so much any more, and I think that probably one reason why is, that the pictures are becoming too common,” wrote a Pennsylvania schoolgirl in an 1877 essay. Gilman upped the ante again, offering coupons that could be collected and redeemed for china or glassware. The coupons, soon to be known as trading stamps, would be a staple of food-store marketing for a century.16

  George H. Hartford was almost certainly not the inspired genius behind his company’s novel approach to marketing. It is likely that the new tea company, the brand-name tea, and the premium with every purchase all emanated from the mind of George F. Gilman. But in 1871, Hartford’s own managerial talents finally came into public view. On October 8, fire devastated the fast-growing city of Chicago. Hundreds of people died, seventeen thousand buildings were destroyed, and food supplies were laid waste. Great Atlantic & Pacific immediately sent staff and food supplies to Chicago. Hartford, in New York, located a map of Chicago, selected a site for a store, and directed the purchase of a property at 114–116 West Washington Street. Within days, the still-hot bricks were removed and the Great Atlantic & Pacific Tea Company opened its first store outside the New York area, accompanied by the usual flamboyant marketing. The Russian grand duke Alexis was touring the United States at the time, attended by great publicity. Ahead of Alexis’s arrival in Chicago on December 30, the Great Atlantic & Pacific advertised, “Go where you can see Alexis” and “The Grand Duke will be most happy to receive his friends at no. 114 West Washington street.” According to company lore, so many customers flooded in that the rear wall had to be knocked out to make more room. Those who managed to squeeze inside and purchase tea received a “splendid tinted lithograph” of the grand duke.17

  The Chicago store was so successful that Gilman and Hartford decided to expand aggressively. By 1875, the Great Atlantic & Pacific had tea and coffee stores in sixteen cities as far-flung as Boston and St. Louis. Each was inaugurated with flair. To celebrate the opening of a “magnificent” store in Boston, aglitter with crystal chandeliers, eight “richly harnessed” black horses pulled a wagon laden with 125 chests of tea through the city’s snow-clogged streets. The team and wagon traveled to store openings in seven other New England cities; in each, onlookers were invited to guess the ensemble’s weight in hopes of winning $500 in gold. By May 15, when the official weighing determined that the horses, cart, and tea chests weighed 11,122 pounds, some fifty thousand people had entered the competition. Great Atlantic & Pacific was not the first retail chain, but it was the first retailer with a presence across much of the country. No other retailer of the time went to such efforts to make its presence widely known. But while promotional gimmickry remained important, running a company spanning much of the country required exceptional organizational skills. Now George H. Hartford’s talents as a manager came to the fore.18

  * * *

  The year 1878 was to be a turning point in the fortunes of the Hartford family. Within the span of a frenetic six weeks, George H. Hartford was catapulted into an improbable political career and then took full control of the tea company where he
had worked for nearly two decades.

  Orange, where the Hartford family had lived since 1866, was known for rough-and-tumble politics dominated by a fractious Democratic Party. In 1876, when cities throughout the land celebrated one hundred years of U.S. independence, affairs in Orange were so contentious that the mayor and the city commissioners were excluded from the local centennial parade. A few months later, in the disputed presidential election that saw the Republican Rutherford B. Hayes awarded the White House in return for promising an end to Reconstruction in the South, the Democrats allegedly swept Orange by paying paupers from the poorhouse to vote Democratic. The town’s elections were usually tumultuous affairs, marked by intimidation, drunkenness, and brawling.19

  The burning issue of the day was temperance. No issue more sharply divided Orange by class, religion, and national origin. Frances Willard, a prominent educator and a founder of the Woman’s Christian Temperance Union (WCTU), a powerful nationwide organization, spoke at the First Methodist Church in 1876, and the local WCTU chapter convened frequently at Methodist and Baptist churches. Men found their own roles to play. In early 1878, some of Orange’s finest citizens met at the First Baptist Church to form the Society for the Prevention of Crime, with sixty-seven people paying a steep $1 membership fee and electing Samuel Colgate, probably the town’s wealthiest property owner, as chairman. Both groups campaigned relentlessly against saloons and—implicitly—against the behavior of the Irish and German immigrants, largely Roman Catholic, who saw nothing wrong with having a drink. “We cannot … hope to do anything toward closing the one hundred fifty liquor saloons that open upon the streets of Orange,” but at least they should close on Sunday as required by state law, the WCTU wrote in its “Appeal to the Citizens of Orange.” The Society for the Prevention of Crime backed a law to allow wives to forbid barkeepers to sell liquor to their husbands and, with more success, demanded that hat manufacturers sign a public pledge to keep their two thousand workers from drinking on the job. The temperance forces were closely aligned with the Republican Party, which represented the city’s elite plus its small number of African-American citizens, whereas working-class white men and local shopkeepers tended to vote Democratic.20

  In 1878, local politics took a bizarre turn. Mayor Henry Egner, a Democrat, declined to run for a fourth one-year term after the state legislature refused to allow the mayor to receive a salary. When the city’s Democratic convention met on March 9, three days ahead of the March 12 election, it could find no candidate for the unpaid job. The local Republicans had no better success; their convention’s choice rejected the nomination, and four other men then turned it down. Both parties scrambled to find candidates. A group of Democratic leaders called on Hartford and asked him to run. The reason for the choice is unknown, but Hartford would have bridged the town’s factions: as an officer of a sizable company he would have appealed to Orange’s business elite, while as a Catholic he would have drawn support from the Irish and German immigrants who strongly opposed Prohibition. After initially declining, he accepted the nomination on Monday, March 11. The following day, he was elected mayor by a vote of 932–766.21

  The new mayor was a mystery to almost everyone. His name had not been mentioned in the preelection speculation about candidates. In fact, the name of George H. Hartford is not to be found in any of the surviving records of Orange’s four newspapers prior to the date of his election as mayor. “We believe he has never before been a candidate for office, and was therefore unknown to a large portion of the community,” reported the Orange Journal. Nonetheless, the rabidly Republican weekly lavished praise on the new Democratic mayor. “There is every reason to believe that the new Mayor will prove an excellent and popular officer. He is a quiet and dignified gentleman, somewhat reserved in manner, and has the reputation of a competent, careful and trustworthy man.” Concurred The Orange Chronicle, “We have a man who although untried, and heretofore not having taken an active part in the affairs of the city, is, we have every reason to believe, a gentleman of excellent business talent and much more than average executive ability.”22

  Hartford took office two weeks later. His first task was to address the nine-member city commission. “I have been very unexpectedly called to this office,” he apologized, before calling for the city to improve its schools, strengthen its police department, and establish a water supply, a goal city leaders had discussed, but failed to accomplish, for several years. The mayor’s remarks, the Orange Journal declared, “will be satisfactory, we think, to our citizens generally, without distinction of party.” Hartford’s announcement that he would serve only a single one-year term, though, was not to be fulfilled. He was to serve as mayor continuously until 1890, and was repeatedly reelected without opposition.23

  On April 15, 1878, three weeks after becoming the mayor, George H. Hartford became a partner in the Great Atlantic & Pacific Tea Company. The founder, George Gilman, had personal reasons for wishing to leave the business. In February 1877 he had retired to his estate along the Connecticut shore. Since that time Hartford had run the business day to day, meeting Gilman occasionally in New York or Connecticut. The partnership agreement gave Hartford ownership of the partnership’s assets and full management responsibilities, with the concern’s bank account to stay in Gilman’s name. At age forty-four, George H. Hartford assumed control of a company with $1 million in annual sales from the seventy stores of the Great Atlantic & Pacific Tea Company and the mail-order business of Great American. The partnership agreement was not put in writing, an omission that would come to cause considerable difficulty.24

  4

  THE GROCER

  In 1880, at the age of fourteen, George Ludlum Hartford entered the employ of the Great Atlantic & Pacific Tea Company. He would work there for the next seventy-seven years.

  George L., the eldest son and second-eldest child of George H. and Josephine Hartford, grew up in the rambling house on Ridge Street in Orange. There were now five Hartford children, including John, born in 1872, and Marie Louise, born in 1875. George H. Hartford’s parents, Joshua and Martha Hartford, lived with the family for several years, as did Josephine Hartford’s ailing brother, Louis, and two young servant girls. The 1880 census found the Hartfords hosting a “boarder,” the English-born “salesman” John E. Clews, aged twenty-four, who would marry Minnie, the eldest Hartford child, in 1881. And from 1878, a steady stream of visitors swept through the Hartfords’ parlors to confer with the mayor, providing the children with a taste of politics. One wonders whether it was his observation of his father’s experience in public life that led George L. to become such a very private man.1

  Orange had no public library and only limited educational facilities in the 1870s. School construction would become Mayor Hartford’s chief accomplishment, but when George L. reached high-school age, the choices were few. Rather than sending their twelve-year-old son off to boarding school, George H. and Josephine enrolled George L. as a day student at St. Benedict’s College, a recently established preparatory school just down the railroad line in Newark, in 1878. St. Benedict’s offered a commercial course, but George L. attended the final two years of the school’s three-year classical program. In his brief time at St. Benedict’s, George demonstrated that he had a head for numbers, winning a prize in algebra. Although students in the classical program normally pursued further education, George’s schooling ended with the ninth grade, in 1880, when he went to work with his father. According to one version of his poorly documented life, he started by stoking the boiler in the store on Vesey Street but was soon made cashier at a store in Newark. From then on, he would spend almost his entire career tending the financial side of the business.2

  The company young George L. Hartford joined was no longer a small enterprise. Great Atlantic & Pacific claimed to have 150 stores in 1880, in addition to Great American, which had become entirely a mail-order business. Guided by George Gilman’s flair for the extravagant, Great Atlantic & Pacific stores had developed into
elaborate temples of tea and coffee, lavishly outfitted to appeal to increasingly status-conscious customers. Each store had a large red T, lit with gas jets, hanging over the sidewalk. Atop the door and the show windows stretched a wood panel announcing the Great Atlantic & Pacific Tea Company. Inside, beneath a pressed-tin ceiling, the walls were painted in vermilion and gold leaf, supposedly imported from China, and decorated with Chinese-style hangings. Gas chandeliers with sparkling cut-glass pendants provided bright illumination. Bins holding the many varieties of tea and coffee lined the selling floor, and packages of Thea-Nectar and ground coffee were stacked neatly behind the dark wood sales counter. Some stores even had a cockatoo, the company’s early mascot, on a perch in the center of the floor. To complete the theme of exotic Asia, the cashier’s station, located near the door, was shaped like a Chinese pagoda.3

  George H. Hartford held complete managerial control over the business. There was, so far as is known, no successor to Gilman as marketer in chief, but his unorthodox marketing ideas may have been less important than in earlier times. By now, Great Atlantic & Pacific was a large-scale business, and promotional antics mattered less than conventional business skills like cost control and inventory management. This was George H.’s strength, but he had to make decisions with only rudimentary information. A store manager kept a simple ledger with two facing pages for each week. The left side listed each day’s sales and the weekly total, which was also broken down into “tea” (presumably including coffee) and “sugar.” The right side listed outlays, from twenty-five cents for resetting a horseshoe to the weekly salaries of $14.00 for the store manager, $10.00 for the clerk, and $3.50, probably for a boy who helped after school. The difference between receipts and expenditures, usually around $140, was remitted to the company each week. This accounting left store-level profitability unclear, as the store’s reported expenses did not include the cost of goods sold.4