Chain grocery retailing was a phenomenon that took off around the beginning of the twentieth century in the United States, with the Great Atlantic and Pacific Tea Company (1859) and other small, regional players. Grocery stores of this era tended to be small (generally less than a thousand square feet) and also focused on only one aspect of food retailing. Grocers (and most of the chains fell into this camp) sold what is known as “dry grocery” items, or canned goods and other non-perishable staples. Butchers and greengrocers (produce vendors) were completely separate entities, although they tended to cluster together for convenience’s sake.
Clarence Saunders’ Piggly Wiggly stores, established in Memphis in 1916, are widely credited with introducing America to self-service shopping, although other stores (notably Alpha Beta in Southern California) around the country were experimenting with the idea at about the same time. Self-service stores came to be known as “groceterias” due to the fact that they were reminiscent of the cafeteria-style eateries that were gaining popularity at the time. In Canada, Loblaw Groceterias, established in Toronto in 1919, also became a major player in the self-service field.
The Chain Store Explosion (1920s):
It was not until the 1920s that chain stores started to become a really dominant force in American food (and other) retailing. Small regional chains such as Kroger, American Stores, National Tea, Loblaws, and Dominion Stores, and others began covering more and more territory, and A&P began moving toward a more national profile, operating over 10,000 of its “economy stores” by the end of the decade. Most of these stores remained small, counter service stores, often staffed by only two or three employees, with no meat nor produce departments. Some still offered delivery and charge accounts, although most chain stores had abandoned these practices.
In 1926, Charles Merrill, of Merrill Lynch set in motion a series of transactions that led to the creation of Safeway Stores, when he arranged the merger of Skaggs Cash Stores, a chain with operations in Northern California and the northwestern United States, with Los Angeles-based Sam Seelig Stores. In 1928, the new chain bought most of the west coast’s Piggly Wiggly stores, and later acquired Sanitary Stores in the Washington DC area as well as MacMarr Stores, another chain that Charles Merrill had assembled. Growth by merger became common in the late 1920s and 1930s, and led to numerous antitrust actions and attempts to tax the chain stores out of existence.
The Supermarket (1930s and 1940s):
As early at the 1920s, some chain grocers were experimenting with consolidated (albeit still rather small) stores that featured at least a small selection of fresh meats and produce along with the dry grocery items. In Southern California, Ralphs Grocery Company was expanding into much larger stores than had been seen before in most of the country. Los Angeles was also seeing the beginning of the “drive-in market” phenomenon, where several complimentary food retailers (a butcher, a baker, a grocer, and a produce vendor, for example) would locate within the same small shopping center surrounding a parking lot. These centers were often perceived by customers as a single entity, despite being under separate ownership.
In 1930, Michael Cullen, a former executive of both Kroger and A&P, opened his first King Kullen store, widely cited as America’s first supermarket, although others have some legitimate claim to that title as well. King Kullen was located in a warehouse on the fringes of New York City, and offered ample free parking and additional concessions in a bazaar-like atmosphere. Merchandise was sold out of packing cartons and little attention was paid to décor. The emphasis was on volume, with this one store projected to do the volume of up to one hundred conventional chain stores. The volume and the no frills approach resulted in considerably lower prices.
The supermarket, as it came to be known, was initially a phenomenon of independents and small, regional chains. Eventually, the large chains caught on as well, and they refined the concept, adding a level of sophistication that had been lacking from the spartan stores of the early 1930s. In the late 1930s, A&P began consolidating its thousands of small service stores into larger supermarkets, often replacing as many as five or six stores with one large, new one. By 1940, A&P’s store count had been reduced by half, but its sales were up. Similar transformations occurred among all the “majors”; in fact, most national chains of the time saw their store counts peak around 1935 and then decline sharply through consolidation. Most chains operated both supermarkets and some old-style stores simultaneously for the next decade or so, either under the same name (like Safeway, A&P, and Kroger) , or under different banners (such as the Big Star stores operated by the David Pender Grocery Company in the southeast).
A&P and Safeway also entered Canada in the late 1920s and joined Loblaws and Dominion Stores as the major players at mid-century.
Suburbs and Shopping Centers (1950s and 1960s):
By the 1950s, the transition to supermarkets was largely complete, and the migration to suburban locations was beginning. Some chains were more aggressive with this move than others. A&P, for example, was very hesitant to expend the necessary capital and move outward, retaining smaller, outdated, urban locations for perhaps longer than was prudent. While the company tried to catch up in the 1960s, its momentum had vanished, and the once dominant chain eventually became something of an “also-ran.”
The 1950s and 1960s were seen my many as the golden age of the supermarket, with bright new stores opening on a regular basis, generating excited and glowing newspaper reports, and serving a marketplace that was increasingly affluent. Standardized designs, in use since the 1930s and 1940s, were refined and modernized, creating instantly recognizable and iconic buildings such as A&P’s colonial-themed stores; the glass arch-shaped designs of Safeway, Penn Fruit, and others; and the towering pylon signs of Food Fair and Lucky Stores. The modernist stores opened by Steinberg in Ontario and Québec are still striking today, despite their conversion to other brands like Provigo, Food Basics, and Metro.
Discounters and Warehouse Stores (1970s):
As changing tastes and zoning boards forced exteriors to become more “subdued” in the late 1960s, interiors began to compensate, with colorful designs evoking New Orleans or the “Gay 90s” or old farmhouses replacing the stark whites common to many stores of the 1950s. Other new touches included carpeting, specialty departments, and more. Kroger’s new “superstore” prototype, introduced in 1972, was perhaps the peak of this trend, with its specialty departments and its orange, gold, and green color palette.
Many shoppers, however, wondered what the costs of these amenities might be, and something of a backlash developed. This backlash was answered in the late 1960s with a new trend known as “discounting.”
Numerous stores around the country embarked on discounting programs at about the same time, most of which centered around the elimination of trading stamps, reduction in operating hours, and an emphasis on cost-cutting. Lucky Stores of California simply re-imaged their current stores and kept using the same name, while others opted for a hybrid format, with some stores operating traditionally and others (such as Colonial’s Big Star stores and Harris Teeter’s More Value in the southeast) open as discounters under different names.
A&P, as was its custom at the time, arrived somewhat late and unprepared for this party. It attempt at discounting, WEO (Warehouse Economy Outlet) was something of a disaster, plagued by distribution issues and by the fact that its numerous smaller and older stores were not capable of producing the volume required to make discounting work (but were converted anyway). This was one of several factors that preceded A&P’s major meltdown of the mid-1970s.
Upscale Stores, Warehouses, and Mergers (1980s and 1990s):
The market segmentation we see today grew out of the discounting movement as amplified in the 1980s. The middle range began to disappear, albeit slowly, as mainline stores went more “upscale” and low end stores moved more toward a warehouse model, evocative of the early supermarkets of the 1930s. Many chains operated at both ends of the spectrum, often under different names (Edwards and Finast was an example, as were the many A&P brands, from Futurestore to Sav-a-Center to Food Basics). In Canada, Loblaws pioneered with its No Frills franchises, often housed in former Loblaws locations, and the Oshawa Group opened Price Chopper warehouse stores in many of the Safeway locations it had recently purchased in Ontario. Others eliminated one end of the market completely, like Harris Teeter in North Carolina, which abandoned discounting entirely.
The re-emergence of superstores, featuring general merchandise and groceries under one roof accelerated this trend. Many such stores had opened in the early 1960s, some of them operated by chain grocers themselves. Only a few survived, Fred Meyer in Oregon being a noteworthy example, and “one stop shopping” seemed a relatively new and fresh idea when Kmart and Walmart tried it again, with considerably more success, starting around 1990. Loblaws opened Real Canadian Superstores, initially under a variety of locally varying names.
The other big trend during this time was toward mergers and leveraged buyouts. This affected almost all the major chains. A&P was sold to German interests. Safeway took itself private in 1987 to avoid a hostile takeover, and lost half its geographical reach in the process. Kroger slimmed down somewhat in 1988 for the same reasons, while Lucky was acquired by American Stores the same year. Another round of mergers in the 1990s placed American Stores in the hands of Albertsons, reunited Safeway with much of its former territory, and greatly increased the west coast presence of Kroger, making these three chains the dominant players in the industry, along with Walmart.
All of which brings us to the present, which is not what this site is about, so I’ll leave any further mention of big box retailers, new players like Whole Foods and Trader Joe’s, and subsequent mergers to future historians, and invite you to continue exploring the past at Groceteria.com.