By: Richard K. Cacioppo, Sr., J.D.
…tracing the history of retailing through the end of The Great Depression, about 1940…(Volume One)
Chapter 1, Retailing from Peddlers to World Dominators
This is for the true history buff, tracing how retailing itself began, when man came out of the cave and came to build a society through commercial enterprises. It traces the evolution of retailing from wandering peddlers, to trade outposts, to the general store, specialty shops, what was to become the traditional department store, variety stores, chains, shopping centers and eventually today’s One Stop Shopping Super Centers. How many know that the first DDS may not have started with the success of E.J. Korvettes in 1948, but perhaps just after the Civil War? It’s all here.
Chapter 2, The Birth of Chain Stores & Mass Merchandising (1859-1900) tells about the pioneers of the chain store revolution the forbearers of all mass merchants, particularly the giant discount department stores, and huge hypermarkets. Barely north of the original New Amsterdam, born out of the Boston Tea Party a century earlier following a concept that today’s discounters live by, skip the middleman and sell at a discount, the Great American Tea Company, which later became A&P, which like Rome rose and fell, but still exists, was started and soon began the first mass merchant, the first chain store. George Huntington Hartford and George Gilman found their way from New England to New York City and extended the former’s brightly-painted red and gold wagon where he sold tea on the street into a small storefront in the heart of what was the original New Amsterdam. In 1870 it was renamed “The Great Atlantic and Pacific Tea Company.”
In this half-century, icons like Montgomery Wards, Sears Roebuck, Walgreen’s, Kroger and Kresge were conceived, along with numerous other great chains, some of which exist today, all of which taught their successors invaluable lessons. And, all became the starting pieces of the mosaic that today is Wal-Mart and the other great American DDSs and European hypermarkets.
Chapter 3, Success, Succession, Depression & Repression chronicles the explosive growth of the small chains during the first three decades of the 20th century. In the span of just a few decades Frank W. Woolworth built a chain of 5 and 10’s into one of the greatest retail organizations in history. As the gaiety of Roaring 20’s abruptly came to an end, A&P, Sears and Woolworths led the growing pack of other mass merchants and became society builders, rather than just providers. The little tea company on Vesey Street in seventy years, particularly in the last few of the 1920’s with the introduction of its Economy Stores had mushroomed to a chain of over 15,000 stores, albeit many remained as small or even smaller than the original shop, mostly one-man operations.
This chapter describes how the great chains got blasted by the Stock Market Crash of 1929, The Great Depression that grew out of it and the Second World War that actually was the impetus for The Great Recovery and the modern era’s retail world.
Chapter 4, Selective Integration and Product Scrambling traces the history of these marketing concepts and the One-Step-Removed approach that resulted in A & P selling more than tea and, and with an exception to the chronological order of the book, jumping a century or more ahead, and Wal-Mart selling swimming pool products and in some locations gasoline. It is the story of retail chess and how the men are separated from the boys; how the great retail innovators have survived when so many former icons are long gone. Before there was the Sears Tower in Chicago, the Woolworth Building on lower Broadway in Manhattan was the financed and built out of the spoils of great planning and open minded Selective Integration. To fully understand the success and failures of the great, near-great and should-have-been-great mass merchants and DDSs, one must have a basic understanding of Category Management and how products are selected. This chapter is a primer that even the casual observer of the industry, and that includes every one of us who has ever shopped at a DDS, or watched a so-called expose on Wal-Mart should understand.
Included in this chapter will be a thorough discussion on the so-called Wheel of Retailing academic theories first published by Harvard professor Malcolm McNair and later challenged by Michigan State Universities noted retail theorist Stanly Holloway, along with those of probably the most eminent scholar alive today on Competitive Strategies, Michael Porter. The relevance of these is to allow the reader to test the reliability of these theories and see how they worked out in evaluating the successes and failures in the DDS industry.
Chapter 5, Selective Capitalism, Success, Succession, Depression & Repression (including a critical analysis of the Anti-Chain and Anti-Supermarket legislation which almost turned the lights out on all efforts to mass merchandise consumer products.)
In a chapter that is likely to be somewhat controversial and evoke many differences of opinion, the author explains and criticizes the massive Anti-Chain, and in his opinion Anti-Competition and Anti-Capitalism movements and attacks on the chains and later Big Box retailers. The growth of America’s retail institutions has been quite accurately analogized with the Darwin Theory of Natural Selection … Survival of the Fittest. But just as the theory of Darwinism to this day is attacked despite literally irrefutable scientific evidence, those retailers, obviously less fit than the likes of the geniuses who founded and developed A&P, Sears Roebuck, Woodworth’s and today Wal-Mart and the other Big Box companies, incited by many who profit by such inciting have attempted to demonize, punish and even eradicate the unbeatable competition, the public be damned. As a Constitutional lawyer, despite admitting to often being anti-big business and being more liberal than conservative in his social politics, he vehemently defends the likes of Wal-Mart and the other mass merchants that have risen to levels only years ago that were virtually unfathomable as being really pro-consumer. Does Wal-Mart have a social conscience? More importantly, should it? Does having a social conscience mean that the great mass merchants should be charitable institutions for their workers and should pussyfoot into communities where smaller merchants never truly put their customers first? Or should it be admired as giving the American consumer what they want, an unmatched selected of goods and services, at prices they can afford, wherever and whenever they want to shop? Food for thought is presented here.
It further discusses how shortsighted political demigods slowed down, but could not stop the growth of the great retailers when Congress and the state legislatures passed Fair Trade (Retail Price Stabilization) and Anti-Chain Store laws. The Sherman Anti-Trust or Anti-Standard Oil Law was said to protect competitor. The 1936 Robinson-Patman Law, labeled by some the Anti-A&P law, was supposed to protect competitors, and its co-author, congressman Wright Patman, who later was to head the House Judiciary Committee that investigate the Watergate scandal almost four decades later, thankfully failed in his attempt to get enough support to pass the so-called Chain Store Death Law. It also explains how these laws that were passed and those bills that were attempted to become law had the reverse effect and led to the development of the huge one-stop shopping food and general merchandise emporiums of today.
Chapter 6, Growth Through Reduction is the story of how the economic calamity of the 1930’s coincided with many retailing breakthrough, such as the shopping cart, central check outs, self-service and cash and carry marketing resulted was the retail equivalent of pruning of trees and other plants. A&P almost overnight cut down their store locations by more than 2/3rds, but continued to increase sales. Sears went from a strictly catalog company for its first forty years of existence to replace many general stores in rural America and then to start populating suburban America as anchors of a new phenomena that began to replace main street and town square commercial districts, the enclosed shopping mall. A&P and Sears were the leaders for decades, but while each are surviving, they are only a shadow of their past. Disheartening for shareholders, but a lot better than what became of Woolworth and the massive variety store segment of the retail industry. What eventually was the Achilles Heal of these seemingly unstoppable goliaths? It is told here, as the story continues until the outbreak of world peace after the most tumultuous decade and a half in modern human history, including the tales of the development of the prototype of the great DDS and other Big Box companies, that of the supermarkets that came into being and out of The Great Depression and assault on the chain stores.