How New Deal Era Chain-Store Battles Reshaped America

by Randy Shaw on July 19, 2012

Growing up in Los Angeles, I never shopped at an A & P. We had Ralph’s, Vons, Westward Ho, and Safeway, along with smaller chains like Hughes and Thriftimart. Since A & P’s steady downward decline began in 1964, one might ask why anyone should be interested in the history of a failed business model. The answer comes from reading Marc Levinson’s The Great A & P and the Struggle for Small Business in America. Levinson shows how “A & P was the most visible example of government efforts to limit competition in the U.S. economy.” It was at the center of still raging debates over price wars, the loss of local jobs, and the increasing concentration of large chain stores. Many may not realize that in 1930’s America, small businesses and independent grocers fought back against discount pricing by chains, and until 1938 had great success. Levinson explains how anti-chain forces were ultimately defeated, as A & P pioneered corporate political strategies that are now the national norm.

I’ve read a lot of books about the New Deal and 1930’s America, but was unaware of the era’s huge struggles between independent grocers and emerging supermarket chains. These battles paralleled the Populist campaigns of the 1890’s, as small farmers and locally owned businesses struggled to survive against large, absentee-owned corporations. The big difference is that we had a more economically populist Congress in the 1930’s, and a President eager to help the common person.

When A & P’s emerging supermarkets used manufacturers’ and brokers’ discounts to underprice small, independent grocers’, the latter fought back. Texas Congressman Wright Patman was their hero, and the Robinson-Patman Act of 1936 his chief effort to limit the growth of chains. Reading about Patman reminds us of how far our country has moved in the wrong direction. Today, outsider activists rather than key Congressmembers or Senators promote economic populism; politicians earn the populist mantle by merely backing marginally higher taxes on those earning over $250,000 a year.

Patman’s populism involved laws that would have taxed A & P in amounts almost equal to their entire annual profit. Yet rather than being accused of being a Communist, Patman was backed by the type of independent businesspersons that today vote Republican.

This political shift involves more than the often discussed cultural and religious factors. From the 1890’s through the early 1950’s, small businesses sought federal government protection against corporate competitors. In recent decades, small businesses have fought federal government “intervention” on health care, disability rights, employment discrimination, tax policies and other issues.

Challenging the Benefits of Low Prices

Levinson’s discussion of A & P’s transformation from a nationwide collection of small grocery stores to much larger supermarkets makes two particularly compelling points.

First, many Americans in the 1930’s felt threatened by A & P’s lower prices, because it put locally owned businesses at risk. Consumers were not demanding “every day low prices” or the importation of low-cost goods from countries lacking labor standards. Locally owned small businesses were seen as the backbone of small town America, and many understood that it was better to pay a little more to keep the money in their community than to shop at A & P.

The consumer movement that emerged in the 1930’s understandably preferred lower prices, as the rise of supermarkets coincided with the Great Depression. Yet despite the circumstances, local and state governments throughout most of America saw discount-driven chain stores as a negative influence undermining the nation’s traditional way of life.

Corporate Political Advocacy Begins

Second, Levinson shows a direct connection between the political success of anti-chain store efforts and the industry’s lack of a strong counter-campaign. A & P was long headed by George and John Harford, who did not believe that the company should get involved in politics. They sat by as state after state passed anti-chain store taxes and other restrictions, only changing course when the proposed taxes in one of Patman’s measures would have put the company out of business.

But then the Hartfords hired Carl Byoir, aptly described by Levinson as “The Fixer.” I do not want to give away all of the strategies Byoir used to turn the tide on chain stores, but he provided a template for how corporations spend billions of dollars to assert their interests today. Byoir was trained by advertising legend Edward Bernays, and, until Levinson’s book, his role in reshaping the way business approaches politics seems to have been overlooked.

One key Byoir strategy was getting labor on A & P’s side. This was not easy, since the Hartfords’ were rabidly anti-union. But Byoir convinced the brothers to make a deal: accept unionization with the AFL (the moderate alternative to the CIO) and the AFL would oppose anti-chain store measures. By 1938 the AFL had changed its tune toward both its longtime adversary A & P and chain-store legislation; the company also agreed to have all of its printing done in union shops.

Byoir created one of the early “astroturf” groups, the National Consumers Tax Commission. Led by the wives of A & P employees, it tapped the power of local women’s clubs on behalf of consumer demands for low prices. After one year of operation, Byoir’s consumer group had over 650,000 members.

The rest, as they say, is history. With labor and consumer groups backing chains, and with similar alliances reached with farmers, lower-priced chain stores became a populist cause. It would be a steady trajectory to Wal-Mart, the shifting of American manufacturing jobs overseas, NAFTA and “free trade,” and other measures sold as bringing lower prices to consumers.

Levinson recognizes that this shift was not a simple choice between keeping local butchers, bakers, and canners employed and making consumers pay higher costs by avoiding the efficiencies of national chains. He estimates that low-income urban families paid 6-15% higher prices for food during the 1920’s and 1930’s, and that by the 1950’s supermarket chains with their lower costs increased the nutritional value of poor people’s diets.

Levinson has written a fascinating book on a critical chapter in American history that speaks directly to us today. And readers need not have ever visited an A & P to enjoy it.

Randy Shaw is the author of The Activist’s Handbook and Beyond the Fields: Cesar Chavez, the UFW and the Struggle for Justice in the 21st Century.

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