Great Atlantic and Pacific Tea Company
From Wikipedia, the free encyclopedia
| The Great Atlantic and Pacific Tea Company | |
|---|---|
 |
|
| Type | Public NYSE: GAP |
| Founded | New York City, 1859 |
| Founder | George Huntington Hartford and George Gilman |
| Headquarters | Montvale, New Jersey |
| Key people | Christian W.E. Haub, Executive Chairman Eric Claus, President and Chief Executive Officer |
| Industry | Retail |
| Revenue | US$8.7 billion (FYE Feb. 25, 2006)[1] US$6.9 billion (estimated FYE 2007)[2] |
| Employees | 42,872 |
| Divisions | A&P Food Basics Farmer Jack (Defunct) Sav-A-Center (Defunct) The Food Emporium Super Fresh Waldbaum's Pathmark |
| Website | www.aptea.com |
The Great Atlantic and Pacific Tea Company, better known as A&P, is a 456-store supermarket chain with locations in Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, and the District of Columbia under several banners. Its corporate and U.S. headquarters are located in Montvale, New Jersey. Supermarket News ranked A&P No. 21 in the 2007 "Top 75 North American Food Retailers" based on 2006 fiscal year estimated sales of $6.9 billion.[2] Based on 2005 revenue, A&P is the 35th largest retailer in the United States.[3]; it was once the dominant food retailer in the nation.
Contents |
[edit] History
The company was founded in 1859 as The Great American Tea Company by George Huntington Hartford and George Gilman in New York City. It was renamed "The Great Atlantic and Pacific Tea Company" in 1870, and George and John A. Hartford, founder Hartford's sons, joined the company in the 1880s.[4]
The company originally focused on the tea business, selling tea by mailorder from a storefront in Lower Manhattan. They were successful in capturing a large part of the market in the northeastern cities in the U.S. They purchased tea directly from Chinese tea plantations. Their low costs enabled them to undercut most of the market and grow.[citation needed] By 1876 they had 67 stores.
[edit] The 20th century
In 1912, the first A&P Economy Store opened, a grocery store format that allowed cost-cutting and standardized layout,[4] increasing their store numbers to 1600 by 1915. By 1925 they had 13,961 stores and sales of $437 million.[5] In the early 1930s, A&P was operating approximately 16,000 stores with a combined revenue of US$1 billion.[citation needed] In 1936 A&P opened their first supermarket in Braddock, Pennsylvania.[4]
In the 1950s, the pressure it put on its suppliers led to the passing of several anti-predatory pricing laws by Congress. The threat of having to break up the A&P company because of these laws led John and George Hartford to give an interview to Time Magazine, which put them on their November 13, 1950 cover.[6] Time wrote that, next to General Motors, A&P sold more goods than any other company in the world. John was quoted in Time 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".[5] Up until 1958, the company was still controlled by the Hartford Family until efforts to make the company a publicly owned corporation ensued.
In the mid 1950s, A&P was by far the number one food retailer. In a few markets, A&P had up to 75 % of the market share. The company had stores in over 39 states. Downtown stores were being replaced with 15,000 to 20,000-square-foot (2,000 m²) supermarkets, which was large for that time period. In many situations a 20,000-square-foot (2,000 m²) store in a town would replace several 5,000-square-foot (500 m²) smaller obsolete stores. In most locations these new stores had a colonial design with a weathervane on the top. On the west coast the stores had a round marina design.
The company continued building supermarkets with the colonial design throughout the 1960s. Most of these stores were on the edge of downtown areas. In the mid 1960s, A&P exited the west coast selling those stores to Safeway, which was the number 2 food retailer at the time.
In the 1960s, A&P became less competitive in pricing and began losing market share as small regional chains began to grow in most markets. Still, A&P was the leading food retailer into the early 1970s while gradually losing market share.
At the end of the 1960s, A&P slowed down building new stores. They also stopped building their legendary weathervane designs. In the early 1970s, A&P fell from the number one position. They also were being surpassed in most markets in terms of market share. The chain also began losing money every year. Stores gradually went from dominating the market to underperforming. The company still built new stores, but very few compared to competitors. In some markets, the company was as low as number 5.
By the late-1970s, ongoing decline in profits, loss of money in the majority of its stores, decline in market share, and a recession caused a change in direction. This resulted in an abrupt exit of many markets and states such as Florida, Texas, Arkansas, Tennessee, Missouri, Illinois, Indiana, and others. The company greatly reduced presence in the southern markets as well as New England. The company still stayed active in the Mid Atlantic region including the New York City Metro area. Still, The chain closed well over half of the stores between 1976 and 1981. In 1979 the company was purchased by Erivan Haub the richest man in Germany who owned Tengelmann, a German retailer.
In 1982, A&P began building larger stores, while remodeling some older stores that had potential. In 1982, Stop & Shop exited New Jersey, and A&P purchased most of these sites. They then replaced some of their obsolete stores with the somewhat more modern Stop & Shops. In 1983, A&P bought Kohl's Food Stores (originally part of the Kohl's department store chain) in Wisconsin from BATUS. This would enable A&P to reenter Wisconsin and Illinois. The Kohl's grocery chain was eventually closed in 2003.
In 1986, A&P purchased a Long Island/Southern New England based chain called Waldbaum's as well as an upscale New York City based chain Food Emporium. These stores replaced the underperforming A&P stores in many cases. The company also turned a profit that year as well. A&P appeared to have made a comeback in the late 1980s. They began building larger 40,000-square-foot (4,000 m²) stores known as Future Stores. In 1989, A&P would acquire Farmer Jack stores based in Michigan and Ohio.
Still, in southern markets the chain still suffered. In the 1990s they exited states like Georgia, South Carolina, Alabama, North Carolina, Virginia, Kentucky, and Tennessee. Many of these sites were sold to Kroger.
In the mid Atlantic region as well as New Orleans, Midwest (Farmer Jack and Kohls), Maryland, Philadelphia, and southern New England, A&P began a major overhaul of its stores. Most of the stores below 40,000 square feet (4,000 m²) were shut down and replaced with stores ranging from 50,000 square feet (5,000 m²) to 80,000 square feet (7,000 m²). This began in 1993. These stores now included pharmacies, larger bakeries, more general merchandise, among other things. These stores are known as Super food markets. The majority of their stores today are this size. By the late 1990s though, the company began losing money and was unprofitable by the turn of the century.
[edit] Rise and decline in number of stores
| Year | No. of Stores |
|---|---|
| 1876 | 67 |
| 1915 | 1600 |
| 1925 | 14,000 |
| 1930 | 16,000 |
| 1955 | 10,000 |
| 1965 | 5,000 |
| 1970 | 4,000 |
| 1978 | 3,500 |
| 1980 | 2,000 |
| 1990 | 1,000 |
| 2000 | 600 |
| 2002 | 500 |
| 2008 | 460 |
A&P had gone from over 10,000 stores in 1955 to about 5,000 in 1965. The number of stores fell because in most towns, several smaller grocery stores would be replaced by one larger supermarket so that by 1970, the company was down to about 4,000 stores. Another reduction in the number of stores occurred because of its west coast exit. By 1978, the company was down to 3,500 stores due to its first round of market exits and reductions. By 1980 the company was down to about 2,000 stores and by 1990 the company had about 1,000 stores left.
[edit] The 21st century
In 2000, the company was down to about 600 stores. In 2002, the company declared its largest loss. At that point, A&P exited Massachusetts, Vermont (only two stores), New Hampshire (one store), Illinois, and Wisconsin (with the folding of Kohl's Super Food markets). The company was down to just over 500 stores.
In 2004, A&P sold their large Canadian division (which maintained a large market share), as well as its Eight O'Clock Coffee division. The company is ranked No. 21 by Supermarket News in the 2007 "Top 75 North American Food Retailers" based on 2006 fiscal year estimated sales of $6.9 billion.[2] It still operates over 400 stores through its A&P US unit in nine U.S. states (Connecticut, New York, New Jersey, Pennsylvania, Delaware, Maryland, Louisiana, Mississippi, and Michigan) and the District of Columbia. Sales that were almost $11 billion several years ago have fallen, primarily because of the sale of the Canada unit.[2]
A&P still operates ten other retail banners besides A&P, which include conventional supermarkets, food and drug combination stores, and discount food stores.[7]
The company formerly operated 237 stores through its A&P Canada unit in the Canadian province of Ontario. On August 15, 2005, the company finalized its sale of the Canadian operations to Metro Inc., a grocery retailer based in Montreal, for CAN$1.7 billion in cash and shares of Metro. It has also announced plans to divest itself of its Midwest operations.[8]
A&P has developed a new corporate slogan, "Fresh Thinking Since 1859." It had converted over 20 retail stores to its "fresh" format in 2005 and an additional 40 stores in 2006. The first Fresh Market was opened in Denville, New Jersey on August 20, 2004. Its "Fresh Markets" were previously "Super Food Markets". Its Midland Park, and West Paterson, New Jersey stores, recently reopened as Fresh Markets, incorporate gourmet food, organics, a wine department and several food preparation counters which allow the consumer to taste and purchase fresh meals. This Midland Park store is the chain's #1 store by sales volume.[9]
Its current Executive Chairman is Christian W.E. Haub, a member of the family that owns the Tengelmann Group of Germany. The President and Chief Executive Officer is Eric Claus. The Tengelmann Group bought a majority stake in A&P in 1979.
A&P revealed on February 27, 2007, that it was in talks to acquire Pathmark for $653 million.[10] A few days later the company had agreed to buy Pathmark for $679 million [11] (and ultimately bought Pathmark for $1.4 billion) {[12][citation needed]. This would allow A&P to be the number 2 grocery retailer in New York Metro areas as well as Philadelphia. This sale was completed as of December 3, 2007. Employees won't yet be mixed into each other's stores in the immediate future but may eventually.
A&P is currently involved in a lawsuit against two former employees over a music video produced at an A&P supermarket in Califon, New Jersey. For more information, see A&P vs. D'Avella.
[edit] Private brands, then and now
For many decades, the A&P supermarkets pioneered in the use of store brands. Eight O'Clock, Red Circle, and Bokar coffees, Our Own tea, Ann Page and Jane Parker foods were almost as notable to regular shoppers as the outside retail brands the store carried. (A&P's coffee line was a hallmark of the store from practically the beginning and received its Eight O'Clock moniker by 1920. It was once a bigger moneymaker than the retail stores themselves.) This practice was both successful and drew criticism. [13]
A&P sold off Eight O'Clock Coffee to a San Francisco investment firm in 2003 (though the retailer continues to sell it). A&P replaced the Ann Page and Jane Parker labels with with its America's Choice and Master Choice in-house brands.
During the generic products trend in the 1980s, A&P established its own quasi-"brand" of generic products under the name "P&Q" (Price and Quality). Likewise, Tengelmann in Germany uses the A&P logo for its own range of generic products, translating as Attraktiv & Preiswert (Attractive and Affordable).
[edit] Banners
[edit] A&P US
Current Banners
- A&P Food Market (Super A&P)
- A&P Fresh Market
- A&P Super Foodmart (New England division)
- Food Basics USA
- The Food Emporium
- Pathmark
- Super Fresh
- Waldbaum's
Defunct Banners
- A&P Sav-A-Center
- Farmer Jack
- A&P Future Store
- Kohl's Food Stores
- SuperPlus Food Stores
[edit] Canada
On August 15, 2005, A&P sold A&P Canada and Food Basics Canada to Metro of Quebec. The name of the Canadian units is now owned by Metro Inc., and all stores under the A&P banner are found exclusively in Ontario.
[edit] Store design
Except for the west coast stores (which had a marina design), A&P stores constructed between 1955 and 1970 usually featured a distinctive cupola and weathervane design on the buildings' roofs; a number of older stores were remodeled to include the feature as well, which became a store trademark.[14] The design can still be seen on several of the buildings that were converted for other use after the A&P's closed.
[edit] Woman's Day
The publication Woman's Day was launched by A&P in 1937. Originally sold exclusively at A&P stores, Woman's Day was purchased by an independent publisher in the mid-1950s, and no longer has any connection to the supermarket chain.
[edit] Sources
- The Rise & Decline of the Great Atlantic & Pacific Tea company, Walsh, William I., Copyright 1986 Publisher Lyle Stuart
- That Wonderful A&P!, Hoyt, Edwin P., Copyright 1969, Hawthorn Books
[edit] References
- ^ The Great Atlantic & Pacific Tea Company, Inc. Announces Results for the Fourth Quarter and Full Year Ended February 25, 2006, The Great Atlantic & Pacific Tea Company, May 9, 2006.
- ^ a b c d 2007 Top 75 North American Food Retailers, Supermarket News, Last accessed February 24, 2007.
- ^ Top 100 Retailers: The Nation's Retail Power Players (PDF), Stores, July 2006.
- ^ a b c Groceteria article on A&P. Accessed on 1/5/2007.
- ^ a b "Red Circle & Gold Leaf," Time Magazine, November 13, 1950.
- ^ John Hartford Time Magazine Cover
- ^ "Company Facts" sidebar, A&P Website. Accessed 1/6/2007.
- ^ The Great Atlantic and Pacific Tea Company (August 15, 2005). "The Great Atlantic & Pacific Tea Company, Inc. Completes the Sale of A&P Canada". Press release.
- ^ The Great Atlantic and Pacific Tea Company (May 10, 2005). "The Great Atlantic & Pacific Tea Company, Inc. Announces Financial Results for 2004 Fourth Quarter and Full Year, Plans for Major Strategic Restructuring". Press release.
- ^ A&P in talks to buy Pathmark for about $653 mln, Reuters, February 27, 2007.
- ^ A&P buys Pathmark Stores
- ^ "A&P, Pathmark Complete Merger". Retrieved on 2007-12-20.
- ^ "A&P Scare," Time Magazine, January 18, 1937.
- ^ Groceteria.com article on A&P
[edit] External links
- The Great Atlantic & Pacific Tea Company Inc. Corporate Site
- A&P Supermarkets (New York Metro stores)
- A&P Super FoodMart (New England stores)
- A&P Canada (Ontario)
- Gallery of classic graphic design featuring A&P
- John Hartford Foundation
- Time magazine cover with A&P and John and George Hartford
- Time magazine archives on Huntington Hartford
- New York Times archives on Huntington Hartford
