Marc Levinson

Besides my interest in social and economic history, I was attracted to this book because my grandmother worked for A & P for decades, retiring from the company in the late 1980s. While not a suburban icon in Washington state where I now reside, A & P was a common sight in the metro Detroit area. I can still recall when A & P changed all of their store names in southeastern Michigan in the late 1980s and early 1990s after they bought the Farmer Jack chain. The A & P brand was a staple in my show more childhood.

Little did I know when beginning this book that A & P was even more important to American history than it was to my own personal history. The company founder, George Gilman, was a leather trader and owned the company Gilman & Company. In around 1859, Gilman expanded his business to include tea and coffee trading. In 1863 Gilman changed the company name to the Great American Tea Company and began a mass advertising campaign, a rare occurrence in those days. Gilman was a talented promoter that used exaggeration and flair to attract customers. He also instated a novel buying club to encourage people to pool their purchases to receive discounts on bulk orders.

In 1869, the transcontinental railroad that linked the Pacific and Atlantic oceans was completed. True to his nature, Gilman launched a “new” business called the Great Atlantic & Pacific Tea Company. In actuality, however, the new company was just a front for the old company, and Gilman was using the new name to jeopardize the established business practices in the tea trade. Rather than deal in bulk like the rest of the tea companies, Gilman created a branded, pre-packaged tea called Thea-Nectar. At this point in history, there were few branded products available other than patent medicines. Most stores sold only in bulk with store clerks measuring portions for each customer. Creating a product like Thea-Nectar was a novel approach to food sales, and it would be another twenty years before the practice became common.

From the outset, the Great Atlantic & Pacific Tea Company was dogged by criticism and allegations of misconduct. Thea-Nectar, accused of being composed of damaged, low-quality tea leaves, was only the tip of the iceberg when it came to those opposing A & P. Most of the coming controversy was dealt with by the Hartfords. George H. Hartford had worked for George Gilman as a bookkeeper and manager since the early 1860s. In 1871, the two began expanding and built another store in Chicago. By 1875, there were stores in sixteen cities. George Hartford received full control of the tea company when Gilman retired 1878. Eventually he brought two of his sons, George L. and John A., into the business. Around this time, coffee and tea consumption exploded aided by expiring tariffs and duties to fund the Civil War. This caused the prices of these products to fall rapidly, and Hartford responded by expanding the product line and eventually got into the food manufacturing business to supply their stores.

By the time of George H. Hartford’s death in 1917, the company was doing swimmingly under George L.’s financial expertise and John A.’s trend-setting ideas. John was the mind behind the A & P brand, creating a tiered approach to branded merchandise based on the price of the product. He also started promotional offers such as a stamp program in which customers collected stamps by buying products that they could later redeem for other select merchandise. For all of A & P’s success, there was a big stick in the company’s craw however. Independent grocers were being stifled by the early years of the twentieth century, and they began to demand that Congress intervene on their behalf, thus beginning a decades-long battle to restrict chain stores.

The Great Atlantic & Pacific Tea Company began a new strategy in 1912 when it began opening economy stores and began using the A & P logo on storefronts. These stores were low-key enterprises that offered no credit, no premiums, and no promotional stamps. They opened economy stores at a rapid pace with more than 864 stores by 1915. Around this time, A & P and other chain stores were gaining more and more attention on the national political scene as groups attempted to thwart their growth. A & P was by far the most profitable and efficient of the chains due to their ground-breaking approach to food distribution and warehousing, placing it under particular scrutiny.

After years of political debate, extremely prohibitive taxes were imposed on chain stores by the 1920s and 1930s. In addition, numerous laws were enacted to prohibit wholesale price concessions and discounts. Although under constant pressure, the Hartfords chose to remain quiet until 1937 when they hired Carl Byoir to run a public relations campaign to counter attacks by independent grocers and politicos. A & P changed tactics again by closing hundreds of stores to avoid over-taxation, and they began opening supermarkets.

Many of these taxes were later repealed as anti-chain sentiments waned by 1940. Ironically the intervention of the federal government was under the guise of promoting competition but in actuality it did quite the opposite. Rather than try to lower prices to benefit the consumer, they instead wanted to keep prices high to support an inefficient distribution system that A & P and other chains had found ways to circumvent. By using more efficient distribution methods, A & P was able to keep their prices low and customers satisfied.

John A. died in 1951 and George L. died in 1957. Although they had a succession plan in place, their first choice, David T. Bofinger, died unexpectedly. Their second choice was Ralph W. Burger. When Burger took over, the company was thriving, but he proved to be a poor fill-in for the Hartfords by failing to innovate or watch trend lines. A & P faltered and rapidly declined in the 1960s and after. Despite all of the innovations in food marketing, improvements to grocery store services and buildings, and efforts to fight back and eventually win during the chain store wars, the Great Atlantic & Pacific Tea Company has been on a downward slope for decades since the deaths of the Hartfords.

Levinson tells this tragic story with expertise and nuanced research. This book was supremely enlightening when considering the current state of chain stores and large distribution channels in America today. It provided both historical and social perspective on the economies of scale that chains are able to accomplish and what these methods mean for the country as a whole. show less

Call this an examination of how the right innovation at the right time can have a catalytic impact, as a cadre of determined businessman (most notably one Malcom McLean of the United States) sought to wring profits from a stagnant industry and helped to unleash a revolution. The question is unanswerable whether the box begot globalization or whether globalization would have called forth some comparable innovation, but it is certainly now the symbol of the global world economic order. If show more Levinson does nothing else he reminds one of the deep inefficiencies represented by the world of manually-loaded tramp steamers, the stagnant communities that served the industry, and the out-date regulations that constrained trade. While one can denounce the spirit of deregulation now run rampant, it's good to be reminded that this spirit had real justification a generation ago. The question that Levinson can't answer is whether this revolution has so refined itself that it is now set for its own unforeseen systemic failure. show less

The Box deserves all of its accolades. The shipping container is one of the least romantic objects imaginable, a 40' by 8' by 8' steel and wood box full of, well, everything and anything. The basic idea behind containerization is that it takes about the same amount of time to move a box, no matter the size, and putting everything in one box enables goods to move from ship to train to truck at minimum cost, accelerating commerce everywhere. But while the idea seems simple, it took decades to show more make it a reality.

Levinson gets at both the creation and destruction in this account. The creation primarily follows Malcom McLean, a North Carolina trucking magnate who's relentless desire to cut costs and boldness to steer away from the way things were done created the first workable modern container system, using a pair of World War 2 vintage converted tankers. McLean was a lonely visionary at first, with other shipping lines taking decades to see the benefits of containers, even at 400% improvements in cost per ton of cargo moved. Containerization necessarily required massive capital investments in new ships and specialized loading gear, harmonization of international and cross-sector regulations across a multiple cartels, and new shipping practices from customers. A major turning point was the use of containers to ease a crisis in military logistics during the Vietnam War. With McLean's expenses covered by the Department of Defense, everything shipped back from Japan was pure profit. We've all benefited from reliability and cheapness of container shipped materials and goods.

But there was also plenty of destruction. Longshoremen unions were hit hardest. Longshoremen loaded and unloaded ships in a manner that their medieval predecessors would have understood, muscling goods between dock and hold only slightly aided by advances like the pallet, forklift, and powered crane. Being a longshoreman was a dangerous trade, injury rates were substantially higher than for other manual labor, but the tens of thousands of longshoremen were a unique community. They were also heavily involved with organized crime, pilferage, and while I'm generally on board with a "fuck all the bosses" stance, deliberate inefficiency in work just barely short of sabotage. Containers required far fewer men than break-bulk loading, and it kicked the foundations out from under longshoremen.

A second set of victims were traditional port cities, primarily New York and London. With 19th century infrastructure and labor practices, these cities were unable to adapt to containers. When shipping had been a substantial cost, factories were close to markets and docks. New intermodal models meant that factories could chase efficiencies worldwide, leading to the lost decades for both cities in the 1970s as they shifted from industry to finance, and rippling Rust Belts as factories and jobs moved from America and Europe to Asia. Ports able to make bold bets on new technologies flourished, like Newark, Rotterdam, Singapore, and Dubai, while others failed based on the harsh economic logic of new integrated supply chains.

Malcom McLean himself hit some of the destruction. He made further bold bets into very fast ships that sunk his company when the 1973 oil embargo drove fuel costs up. A second bet on large round-the-world service hit the opposite problem when oil prices crashed. He was still a rich man, but he never again achieved that flashing acme of success.

This is a detailed, extensive history. Where there are gaps, such as on good pricing data for shipping over time, Levinson makes the case that such data is probably unrecoverable, due to shifting exchange rates, complex per-cargo rates, and under the table kickbacks to major shippers. show less

FYI, 58% of this book is the book, the rest is notes, bibliography, and index. I checked it out from my library, yay libraries!

Although the author goes into the kind of detail my brain will never retain, and although I did skim and even skip several chapters because of that, I did get the sort of overall understanding I was looking for, so that's a win. I'd thought the process from breakbulk shipping to streamlining in large containers was less fraught than it turned out to have been. Well, show more humans will human; we want prosperity, but we get in each other's and our own way more often than not. show less