19th century Penn Traffic traces its origins back to the 1850s, when it was a trading post in
Johnstown, Pennsylvania. Over the years, Penn Traffic evolved first into a general-merchandise department store and later a large
retail and
wholesale supermarket company.
20th century In 1922, it established Johnstown's first radio station,
WTAC, which was licensed until early 1926. Riverside, founded in
Brookville, Pennsylvania, in 1928, became part of the Penn Traffic family in 1962, and began developing the Bi-Lo format in the 1980s, unrelated to the
chain in the Mid-Atlantic. Penn Traffic operated 43 supermarkets under the Bi-Lo trade name across Pennsylvania, and also distributed food to 51 franchised and independent supermarkets from its
DuBois, Pennsylvania, distribution facility. Quality Markets, founded in
Jamestown, New York, in 1913, joined the Penn Traffic family in 1979. Penn Traffic operated a total of 34 supermarkets under the Quality trade name in southwestern New York and northwestern Pennsylvania. Penn Traffic's flagship department store in Johnstown, challenged by economic decline, permanently closed after the
1977 flood. The company sold its six department stores and two women's specialty-store leases to Crown American Corporation, owner of the
Hess's department store chain, in 1982 in order to concentrate on the
supermarket business. Miller, Tabak, Hirsch & Company, a
New York City-based investment group, began its takeover bid for Penn Traffic in 1986. Early takeover attempts were resisted by management but by 1987, Penn Traffic agreed to an offer by an affiliate of the investment firm and the company was briefly taken private for $131 million (~$ in ). In 1988, under then-chairman Gary Hirsch, Penn Traffic began an acquisition program. Hirsch first took Penn Traffic public, raising $25 million, and then added Syracuse-based P&C Food Markets for $219 million. In 1989, Penn Traffic acquired
Ohio chain
Big Bear Stores for $341 million (~$ in ).
P&C Foods P&C Foods began in 1944 as the Producers and Consumers food cooperative in
Ithaca, New York, as a way for farmers in
upstate New York to get their products to market efficiently. Until 2010, Penn Traffic operated 70 P&C supermarkets serving the
Syracuse metropolitan area and other communities in upstate New York,
Vermont,
New Hampshire, and
Pennsylvania. P&C was also a major wholesaler in upstate New York; from its Syracuse warehouse, the company served 99 independent supermarkets in central New York, the majority of which still operate under the Big M franchise trade name. In 1997, a new ballpark for the
Syracuse SkyChiefs opened as
P&C Stadium. Penn Traffic owned the naming rights for nine baseball seasons. The last P&C Foods branded grocery store closed on January 21, 2012, in
Bath, New York, when the building was sold to Moran Foods, owner of
Save-A-Lot, by order of the
FTC. The P&C name survives today in
Cortland and Ithaca under new owners.
Big Bear When the first Big Bear store opened in 1933, it marked the beginning of self-service supermarket operations in the
Midwest. Big Bear was the first supermarket in the country to use cashier-operated motorized
conveyor belts and the first to use an
IBM mainframe computer. In the 1980s, its Big Bear Plus stores combined a supermarket with a general merchandise store. Penn Traffic operated 70 Big Bear and Big Bear Plus stores in
Ohio and
West Virginia until early 2004. As a result of Penn Traffic's 2003
bankruptcy filing, these stores were either closed or sold to other companies, such as grocery retailer
Giant Eagle, while other properties were left vacant and still remain vacant. The
Columbus, Ohio warehouses operated by Big Bear were also left vacant and subsequently torn down for redevelopment. In the early and middle 1990s, Penn Traffic continued to grow as it acquired and built other supermarkets in and near its primary markets. During this time, Penn Traffic entered the
Buffalo, New York and
Erie, Pennsylvania markets with the Quality trade name and made substantial investments to enhance its store base and distribution network, while maintaining steady growth in cash flow and profitability. In 1997, Hirsch hired Phil Hawkins, who was credited with saving the
Vons supermarket chain in
California. Hawkins cut costs and fired 325 employees, including all five division heads, some with 20 years or more with Penn Traffic. As
CEO, Hawkins replaced USDA Choice meat in its butcher shops with a cheaper grade meat. In an effort to reposition its stores as value-focused, Hawkins slashed expenses by using generic grocery bags, postponing store maintenance, and reducing benefits to employees. In the Columbus market, prices did not uniformly drop and competitors, including
Kroger and
Meijer regularly beat Big Bear in third party cost comparisons. Meanwhile, better capitalized competitors, including
Wegmans and Kroger, cut into market share. Same store sales fell 8.2% in fiscal 1998, while operating income declined another 6%, to $165 million ($ in ). In Columbus, where Kroger and Big Bear had once been neck and neck, Big Bear's market share dropped to 20% from 25%, while Kroger's rose to 54% from 44% in 1998, according to a survey by
The Columbus Dispatch. Hawkins resigned before the first bankruptcy filing, March 1, 1999. In December 2008, Penn Traffic entered into a definitive agreement to sell its wholesale business segment to C&S Wholesale Grocers Inc. On November 18, 2009, Penn Traffic filed for
Chapter 11 bankruptcy protection following second-quarter 2009 losses of $7 million, the highest loss ever for the company, missed loan payments, and slower shipments from suppliers. The company initially intended to sell all of its assets by the end of 2009 and close on the deal or deals by the early January 2010. As of January 9, 2010, Penn Traffic was entertaining three separate bids: $54 million from
Price Chopper for 22 P&C Foods stores, a private bid of $36.5 million from a team of professional liquidators for all of P&C's assets and $85 million from
Tops Markets for all of Penn Traffic's stores. ==Sale to Tops Markets==