page_title: The Great Atlantic & Pacific Tea Company
section_title: Evolution of the grocery store
hierarchical_section_title: The Great Atlantic & Pacific Tea Company / History / 1878–1951: Hartford era / Evolution of the grocery store
caption_attribution_description: English: A&amp;P newspaper ad from New York City, dated 1922. Converted to black and white, cropped using gimp.
context_page_description: The Great Atlantic & Pacific Tea Company, better known as A&P, was an American chain of grocery stores that operated from 1859 to 2015. From 1915 through 1975, A&P was the largest grocery retailer in the United States.
  A&P was considered an American icon that, according to The Wall Street Journal, "was as well known as McDonald's or Google is today", and was "the Walmart before Walmart". At its peak in the 1940s, A&P captured 10% of total US grocery spending. Known for innovation, A&P and the supermarkets that followed its lead significantly improved nutritional habits by making available a vast assortment of food products at much lower costs. Until 1982, A&P also was a large food manufacturer. 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.
  Founded in 1859 by George Gilman as "Gilman & Company", within a few years the firm opened a small chain of retail tea and coffee stores in New York City, and operated a national mail order business.
context_section_description: George Huntington Hartford joined Gilman & Company as a clerk perhaps in the late 1850s; Hartford later was promoted to bookkeeper, then cashier, in 1866. By 1871 Hartford was in a position of authority and was responsible for expanding A&P to Chicago after its great fire. A&P's first store outside New York City was opened just days after the disaster. The firm rapidly expanded; in 1875 A&P had stores in 16 cities. In 1878, Gilman left the active management of the firm to Hartford. By then, the firm operated 70 lavishly-equipped stores and a mail order business with combined annual sales of $1 million.
  To raise revenue, Congress significantly raised tariffs on tea and coffee. Profits on these products declined; around 1880 A&P started to sell sugar in its stores. The company continued aggressive growth and by 1884 operated stores as far west as Kansas City and as far south as Atlanta. The company also operated wagon routes to serve rural customers. About this time, two of Hartford's sons, George (1864–1957) and John (1872–1951), joined the firm. A&P lore holds that George convinced his father to expand the product line to include A&P-branded baking powder. Over the next decade, the company added other A&P-branded products, such as condensed milk, spices, and butter. As it expanded its offerings, the tea company was gradually creating the first grocery chain. By 1900, the firm had sales of $5 million from 198 stores as well as its mail order and wagon route operations. However, other grocery chains were expanding more rapidly and blanketing their respective areas while the tea company's stores were spread over a much larger area. A&P quickly found itself at a disadvantage.
  In 1901, George Gilman died without a will, starting a legal battle among his numerous heirs. The senior Hartford stepped into the battle by asserting that, in 1878, Gilman gave him half of the company in an unwritten partnership agreement. Evidence provided to the court established that Hartford received half of A&P's profits starting in 1878 and that the company's leases were in his name. The heirs realized that without Hartford, the firm would quickly become unprofitable. Therefore, in 1902 they agreed to a settlement where A&P was to be incorporated, with $2.1 million in assets. Under this agreement, the Gilman heirs received $1.25 million in preferred shares at 6% interest, while Hartford received $700,000 in common stock and the remainder of the preferred shares. This gave Hartford control of the voting stock. Over several years, Hartford was able to repurchase the preferred shares from the Gilman heirs.  A&P opened an average of one store every three weeks. A nine-story headquarters and warehouse was built in Jersey City; it later expanded to include a manufacturing plant and bakery.
  By 1908, George Hartford Sr. divided management responsibilities among his sons, with George Jr. controlling finance with John directing sales and operations. The sons ran A&P for over 40 years. The younger Hartford moved aggressively to promote the A&P brand, dramatically increasing the product line. To make space for the new items, A&P replaced in-store premiums with S&H Green Stamps. By 1912, the corporation operated 400 stores and averaged a 22% gross margin, resulting in a 2% profit. A&P's peddlers were also operating 5,000 rural routes in distinctive red-and-black wagons.
caption: Newspaper ad from New York City, 1922
exif: {}