100 YEARS OF FOOD RETAILING
Once the United States officially entered World War II in 1941, the grocery industry was turned upside down in some dramatic ways. Retailers and suppliers lost tens of thousands of men to military duty, and as a result, women took on new roles. Meanwhile, food supply chains were tested as never before, prices on goods skyrocketed and new behaviors were established.
American consumers were forced to be resourceful and conserve food and other basic needs, while retailers administered wartime initiatives such as rationing, price ceilings and allocations. Even gasoline was rationed, and as a result, auto registrations dropped by 2 million from 1940 to 1945. This change gave way to less frequent shopping trips and more one-stop shopping.
Many retailers sought to help customers deal with rationing, providing “no-point” meal suggestions — no-point products included beans, cereals and pasta — and giving demonstrations to housewives about how the rationing system worked.
- H-E-B opened its first air-conditioned stores and introduced exclusive brand names, including Village Park and Park Manor.
- In 1945, Sam Walton opened his first variety store, in Newport, Ark., as a franchisee.
- In the middle of the decade, A&P became embroiled in an antitrust lawsuit. Its owners, John Hartford and George Hartford, were sued by the United States for unfair competition against independents, exaction of allowances by headquarters, and abuse of advertising allowances. The owners lost the case and were fined. In 1949, the attorney general filed a new lawsuit calling for the breakup of the company. In response, A&P launched a PR campaign to salvage its image, and by 1953, the government had ended its case.
- Frozen foods continued to grow, aided by the fact that so many canned goods had been shipped overseas during the war. In 1945, Robert Abel, VP and manager of Commander Stores, in Syracuse, N.Y., wrote in Progressive Grocer that he had sold $90,000 a year in frozen foods, equal to about 5% of total store sales. Bulk foods represented 50% of his sales, revealing a period when individually packaged frozen foods weren’t so commonplace. The best place to position frozen foods, according to Abel, was near the produce department.
- In 1946, American Stores (parent of Acme Markets) moved to acquire Grand Union supermarkets, but the proposal was turned down by Grand Union stockholders. Grand Union’s VP, Lansing P. Shield, vigorously opposed the deal, which was favored by the company’s president, J. Spencer Weed. After the merger was opposed, Weed immediately stepped down. Shield, a believer in the supermarket concept, moved quickly to convert Grand Union’s 320 stores to self-service.
Legal matters and M&A activity shaped the industry.