1859–1878: Gilman era The forerunner of A&P was founded in the 1850s as
Gilman & Company by
George Gilman (1826–1901) to continue his father's
leather tanning business; in 1858 the firm's address was 98 Gold Street in
Manhattan. Gilman's father died in 1859, leaving the son wealthy. That year, Gilman & Company entered the tea and coffee business from that storefront. One source speculates that Gilman decided to enter a more respectable business in light of his wealth. In May 1861, Gilman turned over the tanning business to his brother Winthrop; George moved his tea business to 129 Front Street. Initially, Gilman & Company was a wholesaler. In early 1863 the firm became a retailer,
Great American Tea Company. Quickly, it opened five stores, moving its office and warehouse to 51
Vesey Street. Gilman proved to be a master at promotion; the business quickly expanded by advertising low prices. The firm was able to offer low prices by acting as both the wholesaler and retailer. Gilman also built a nationwide
mail order business. By 1866, the firm was valued at more than $1 million (~$ in ). In 1869, the
transcontinental railroad was completed; Gilman created a parallel company, the
Great Atlantic & Pacific Tea Company, to promote the then-new concept of prepackaged tea under the
Thea-Nector name. The tea company, which some sources say was co-founded by
George Huntington Hartford, continued to use the
Great American name for mail-order purposes. In 1871, A&P introduced another concept when it offered
premiums, such as lithographs, china, and glassware with the purchase of coffee and/or tea at its stores. These premiums are now collectibles.
1878–1951: Hartford era Evolution of the grocery store , mid-1870s 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. , guidebook, listing the range of items carried To raise revenue, Congress 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 $5 million (~$ in ) 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 ) 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 Plaid Stamps, which sought to mimic
S&H Green Stamps, a popular rewards program. 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.
Development of economy stores Food prices were a political issue in the
1912 presidential election after a 35% increase in 10 years. 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 $2.9 billion (~$ in ) in sales,
1951–1974: Post-Hartford era , remained unchanged (except for A&P's "sunrise" logo) until it closed in 2013. 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 $70 (~$ in ). 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 $30s (~$ in ). 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 . Note the "sunrise" logo introduced in 1975. 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 to , along with its first combination grocery-drug stores with under the A&P Family Mart name. The first Family Mart opened in
Greenville, South Carolina, as
The Family Mart in 1977. A&P realized that its name was not the asset it had been. : It became an ACME in 2015 due to A&P's liquidation. A&P started to acquire stores from other chains. Starting in 1982, A&P acquired several chains that continued to be operated under their own names, rather than being converted to
A&P. While A&P regained profitability in the 1980s, in 2002 it operated at a record loss because of new competition, especially from
Walmart. A&P closed more stores, which included the sale of its large
Canadian division. A&P also spun off
Eight O'Clock Coffee, the last of its manufacturing units. In 1982,
Stop & Shop exited New Jersey, not returning for almost 20 years. A&P purchased most of these stores to replace obsolete ones. In 1983, A&P bought Wisconsin-based
Kohl's Food Stores (which had been part of the
Kohl's department store chain) from
BATUS, enabling A&P to reenter
Wisconsin and
Illinois. In 1984, A&P purchased
Pantry Pride's
Richmond, Virginia, division. In 1986, A&P purchased
Waldbaum's (with stores in southern New York and southern New England) and
The Food Emporium, the latter an upscale New York City-based chain. In 1989, A&P acquired Michigan-based
Farmer Jack; also, A&P attempted to expand into Europe by bidding unsuccessfully for the
Gateway Corporation (then the United Kingdom's third-largest grocery chain), although they did open stores in the Netherlands, which they operated until the early 2000s. In the early 1990s, A&P started to struggle again because of the economy and new competition, especially Walmart. In 1992, A&P's sales dropped to $1.1 billion; it posted a loss of $189 million. A&P responded by strengthening its private label program and overhauling its remaining U.S. units. Most stores smaller than were expanded, closed, or replaced with units from to . The new stores included pharmacies, larger bakeries, and more general merchandise. reducing it to just over 500 stores. In 2005, A&P sold its
237-store Canadian division (consisting of A&P, Dominion,
Ultra Food and Drug stores, as well as the Canadian
Food Basics units) to Montreal-based
Metro Inc. for
Can$1.7 billion in cash plus shares of Metro. In 2007, A&P closed its New Orleans division, limiting A&P's footprint to the
Northeast. Also in 2007, A&P acquired
Pathmark, a long-time Northeastern rival, for $1.4 billion (~$ in ). With this purchase, A&P again became the largest supermarket operator in the
New York City area. as Tengelmann ended its holding, and briefly returned to modest profitability in 2013 and 2014. This allowed A&P to regain its position as the largest grocery retailer in the New York City area, and the second-largest in the Philadelphia area. However, the
Federal Trade Commission declared that as a result of the acquisition, A&P would be a monopoly in parts of
Long Island and
Staten Island. As part of its settlement with the FTC, the corporation was forced to divest of some Waldbaum's and Pathmarks. When A&P marked its 150th anniversary in 2009, it was ranked only No. 21 by
Supermarket News of the top 75 North American grocery retailers based on 2008 fiscal year estimated sales of US$9.6 billion (~$ in ). Tengelmann held approximately 38.5 percent of A&P, with
Yucaipa holding a 27.5 percent share; the rest was held by individual shareholders and investor groups. Christian Haub was chairman. Eric Claus, then president and CEO, left A&P, with Sam Martin assuming these responsibilities.
First Chapter 11 bankruptcy (2010) The
Great Recession affected many supermarkets as customers migrated to discount markets in even greater numbers. A&P was especially hard hit because of its increased debt load to complete the Pathmark purchase. In June 2010, A&P stopped paying $150 million (~$ in ) in rent on the closed Farmer Jack stores. In August, A&P announced that it would close another 25 stores in Connecticut, Maryland, New Jersey, New York, and Pennsylvania: 13 Pathmarks, 6 A&Ps, 2 Waldbaum's, and 4 Super Fresh stores. In September, A&P announced it was selling seven Connecticut stores to
Big Y. On December 10, 2010, bankruptcy rumors surfaced; A&P stock tumbled from over $3 per share to below $1 before trading was halted. Two days later, A&P announced it was filing for
Chapter 11 bankruptcy. According to documents submitted to U.S. Bankruptcy Court in
White Plains, New York, A&P listed over $2.5 billion in assets, and $3.2 billion in debt. After the filing, A&P remained in operation (with its stock symbol changed to
GAPTQ) while it developed a reorganization plan. In November 2011, the corporation announced that it had entered into an agreement to receive $490 million (~$ in ) of debt and equity financing from Yucaipa, Mount Kellett Capital Management, and investment funds managed by
Goldman Sachs Asset Management. The agreement enabled A&P to complete its restructuring and emerge from Chapter 11 as a private entity in early 2012. At this time, Christian Haub left A&P, and Tengelmann wrote off its books the remaining equity.
Second Chapter 11 bankruptcy and supermarket shutdown A&P briefly returned to modest profitability by cutting costs in its remaining stores, although customer spending further decreased. In 2013, again a company, A&P was put up for sale but could not find a suitable buyer. In January 2014, Sam Martin resigned. In March, Paul Hertz was named CEO and President as the company broke even. On January 15, 2015, the trade publication
Supermarket News reported that A&P was still for sale. There were rumors of several parties being interested, including
Cerberus, still owning
Albertsons assets. However, no suitable offers were received. In May, rumors emerged that A&P was in more financial trouble as it declared a huge loss (in April) for the previous year, losing more business to better-managed competition. As customers were staying away, A&P considered its second bankruptcy filing in less than five years. There were rumors that A&P would sell all stores more than 40 miles from its corporate offices, shrinking the company to about 100 stores. Other rumors were that the company would sell all its stores. Rumors also surfaced about a
Chapter 7 bankruptcy and total liquidation, selling the company in pieces, as well as a Chapter 11 bankruptcy with selling in pieces. The company remained for sale as a whole, receiving no bids for any of its stores. Other alternatives were explored, including selling other assets. mainly in New York City, including all remaining Food Basics and Food Emporium stores.
Morton Williams acquired two Food Emporium stores in
Manhattan, while
Wakefern Food Corporation, the cooperative which runs
ShopRite and
PriceRite, acquired 12 units, including 9 Pathmark stores. Local grocers also acquired units either through sales or auctions. All supermarkets were closed by November 25 (Thanksgiving eve). The last remaining portion of A&P,
Best Cellars at A&P, had its stores auctioned in summer 2016, with 11 stores sold (none as going concerns) and 6 leases rejected. ==Store design==