The Great A&P and the Struggle for Small Business in America (5 page)

The Great Atlantic & Pacific Tea Company was what was later called a “banner,” not a company. Gilman’s motivation for starting it is uncertain. One reason may have been to fend off imitators. The Great United States Tea Warehouse at 30 Vesey Street, directly across the street from Great American, initiated advertisements much like Great American’s, promising low prices to customers who formed buying clubs and ordered by mail. Bertram, Bradford & Company at 26 Vesey Street advertised the fixed prices at which it would sell tea to small-town wholesalers, just as Great American did. Gilman’s marketing strategy, which had been distinctive in the early 1860s, was routine by the end of the decade, and he needed to find a way to stand out in a crowded marketplace. He also seems to have believed that his firm could generate more sales by appearing in various guises. Two further Gilman fronts, Consumers’ Importing Tea Company and Centennial Tea Company, were soon soliciting mail orders. None of the four Gilman tea dealerships ever disclosed its link with any of the others.

The widely advertised creation of the Great Atlantic & Pacific Tea Company threatened established interests in the tea trade, and they reacted strongly. On September 15, 1869, within a few weeks of the new entity’s birth, one Professor John Darby launched
American Grocer
as a newspaper for the grocery business. Almost immediately, the publication went on the attack against George F. Gilman’s supposed dominance of the tea business. “One man in particular, with a dash of intellect, has broken through the conventionalisms of contracted ideas which fast bind others in the line, and has far outdistanced all competitors,”
American Grocer
wrote. This individual, who was not named by the newspaper but was almost certainly George Gilman, “has purchased in one morning no less than thirty-six thousand chests of tea for his parcel agencies and retail counter trade.” This claim is highly improbable, implying that Gilman acquired 9 percent of all U.S. tea imports for 1869 in a single day, but exaggeration served the purpose of raising alarm. The newspaper declared itself on the side of “the masses of the trade,” and promised to teach readers how to do a better job of selling tea so families will not “send to monster establishments in order to suit their requirements.”

American Grocer
, of course, was not a disinterested party. Great American’s advertising consistently attacked the importers, tea merchants, and wholesale grocers who extracted profits from the tea trade while delaying the delivery of fresh tea to the consumer. Those middlemen were
American Grocer
’s advertisers, whose business was being undercut by mail-order sales.

The Great Atlantic & Pacific Tea Company developed into an entirely different sort of business from its precursor. Great American’s mail-order business and its eleven tea shops in New York dealt entirely in bulk teas and coffees, indistinguishable from those of its competitors. Great Atlantic & Pacific, in contrast, startled the tea trade in 1870, a few months after its creation, by launching a radically different product, a branded tea. Thea-Nectar was said to contain a unique mixture of teas that were dried on porcelain, with no coloring or impurities. Unlike other teas, which came loose, Thea-Nectar was sold prepackaged, in half-pound or pound boxes. It was supported by an unusual marketing campaign, with newspaper advertisements far larger than the standard few lines of agate type. “Thea-Nectar is a pure black tea with the Green Tea flavor,” the ads proclaimed. Unlike any other tea on the market, Thea-Nectar was exclusive, available only from the Great Atlantic & Pacific Tea Company.

A brand-name tea was an extraordinary product to bring to market in 1870. At the time, consumers had access to few branded products of any sort, save patent medicines. Almost everything offered in grocery stores, from flour to pickles, was purchased by the shopkeeper in bulk and sold from barrels or canisters, with the store clerk measuring out the quantity the customer desired. The widespread sale of brand-name foods in sealed packages was still two decades in the future. It was only in 1870 that Congress enacted a law allowing businesses to register and protect trademarks such as Thea-Nectar—and when it did so, advertisements announced that “the Great Atlantic & Pacific Tea Company have secured by congress the exclusive right to sell in this country, Thea-Nectar,” distinctly implying that its product enjoyed some special imprimatur. With his branded tea, George Gilman was once again on the leading edge of a revolution in marketing.

And once again, the reaction from those threatened by Gilman’s marketing prowess was swift. In the autumn of 1870,
American Grocer
published a four-part article purporting to reveal the truth about the “unprincipled monopolists” seeking “to control the vast retail business throughout the country.” Without naming names,
American Grocer
dissected a Great Atlantic & Pacific advertisement claiming that company representatives visited the tea-growing districts of China and Japan to oversee the selection and curing of the choicest teas. In fact, said the newspaper, it had found no record of this company ever importing a single cargo of tea. “By diligent inquiry, we have ascertained that this Company never personally visited any tea district except that in the immediate vicinity of Wall and Water streets of this city, and the auction sales where damaged teas are disposed of.” Fewer damaged teas are coming to auction than in the past,
American Grocer
claimed; instead, these “wet and damaged teas” are bought directly from importers for as little as seven cents a pound, “and afterward dried, colored and repacked, and sold to the consumer for ninety cents.” The result, the newspaper claimed, was “to draw away the trade which rightfully belongs to the retail merchant in the different towns where these teas are sold.”

Some of those allegations almost certainly were true. There is no evidence that Great American and Great Atlantic & Pacific imported anything during this period, much less that they had “correspondents in China and Japan,” as their advertisements stated. As Abram Wakeman recalled later, Gilman bought most of his teas through the New York house where Wakeman worked. The claim that Gilman sold adulterated teas is credible because adulteration was extremely common, but there is no reason to think Gilman’s teas were notably less pure than those offered by the wholesalers advertising in
American Grocer
. If the teas were inferior, customers seem not to have noticed. Yet if its complaints about the quality of Gilman’s products were exaggerated,
American Grocer
’s grasp of the implications of his business strategy was insightful. “If this can be done so successfully with teas … it can be done in other lines of goods of universal demand,” the newspaper warned. On that score, the newspaper would soon be proved right.

Around 1871, Gilman unveiled yet another innovation in marketing: the premium. Chromolithographs—mass-produced colored pictures—had been invented in the 1830s, and after the Civil War they became wildly popular in America, decorating many kitchens and parlors. Great American and Great Atlantic & Pacific began offering chromos as gifts with every purchase of tea or coffee. When other tea companies followed suit, the competition escalated from individual chromos to series on themes such as sporting events and U.S. presidents. The wealthy sometimes framed them, the poor simply tacked them to the walls. But collecting chromos soon lost its novelty. “People do not go there [to the tea store] so much any more, and I think that probably one reason why is, that the pictures are becoming too common,” wrote a Pennsylvania schoolgirl in an 1877 essay. Gilman upped the ante again, offering coupons that could be collected and redeemed for china or glassware. The coupons, soon to be known as trading stamps, would be a staple of food-store marketing for a century.

George H. Hartford was almost certainly not the inspired genius behind his company’s novel approach to marketing. It is likely that the new tea company, the brand-name tea, and the premium with every purchase all emanated from the mind of George F. Gilman. But in 1871, Hartford’s own managerial talents finally came into public view. On October 8, fire devastated the fast-growing city of Chicago. Hundreds of people died, seventeen thousand buildings were destroyed, and food supplies were laid waste. Great Atlantic & Pacific immediately sent staff and food supplies to Chicago. Hartford, in New York, located a map of Chicago, selected a site for a store, and directed the purchase of a property at 114–116 West Washington Street. Within days, the still-hot bricks were removed and the Great Atlantic & Pacific Tea Company opened its first store outside the New York area, accompanied by the usual flamboyant marketing. The Russian grand duke Alexis was touring the United States at the time, attended by great publicity. Ahead of Alexis’s arrival in Chicago on December 30, the Great Atlantic & Pacific advertised, “Go where you can see Alexis” and “The Grand Duke will be most happy to receive his friends at no. 114 West Washington street.” According to company lore, so many customers flooded in that the rear wall had to be knocked out to make more room. Those who managed to squeeze inside and purchase tea received a “splendid tinted lithograph” of the grand duke.

The Chicago store was so successful that Gilman and Hartford decided to expand aggressively. By 1875, the Great Atlantic & Pacific had tea and coffee stores in sixteen cities as far-flung as Boston and St. Louis. Each was inaugurated with flair. To celebrate the opening of a “magnificent” store in Boston, aglitter with crystal chandeliers, eight “richly harnessed” black horses pulled a wagon laden with 125 chests of tea through the city’s snow-clogged streets. The team and wagon traveled to store openings in seven other New England cities; in each, onlookers were invited to guess the ensemble’s weight in hopes of winning $500 in gold. By May 15, when the official weighing determined that the horses, cart, and tea chests weighed 11,122 pounds, some fifty thousand people had entered the competition. Great Atlantic & Pacific was not the first retail chain, but it was the first retailer with a presence across much of the country. No other retailer of the time went to such efforts to make its presence widely known. But while promotional gimmickry remained important, running a company spanning much of the country required exceptional organizational skills. Now George H. Hartford’s talents as a manager came to the fore.

*   *   *

The year 1878 was to be a turning point in the fortunes of the Hartford family. Within the span of a frenetic six weeks, George H. Hartford was catapulted into an improbable political career and then took full control of the tea company where he had worked for nearly two decades.

Orange, where the Hartford family had lived since 1866, was known for rough-and-tumble politics dominated by a fractious Democratic Party. In 1876, when cities throughout the land celebrated one hundred years of U.S. independence, affairs in Orange were so contentious that the mayor and the city commissioners were excluded from the local centennial parade. A few months later, in the disputed presidential election that saw the Republican Rutherford B. Hayes awarded the White House in return for promising an end to Reconstruction in the South, the Democrats allegedly swept Orange by paying paupers from the poorhouse to vote Democratic. The town’s elections were usually tumultuous affairs, marked by intimidation, drunkenness, and brawling.

The burning issue of the day was temperance. No issue more sharply divided Orange by class, religion, and national origin. Frances Willard, a prominent educator and a founder of the Woman’s Christian Temperance Union (WCTU), a powerful nationwide organization, spoke at the First Methodist Church in 1876, and the local WCTU chapter convened frequently at Methodist and Baptist churches. Men found their own roles to play. In early 1878, some of Orange’s finest citizens met at the First Baptist Church to form the Society for the Prevention of Crime, with sixty-seven people paying a steep $1 membership fee and electing Samuel Colgate, probably the town’s wealthiest property owner, as chairman. Both groups campaigned relentlessly against saloons and—implicitly—against the behavior of the Irish and German immigrants, largely Roman Catholic, who saw nothing wrong with having a drink. “We cannot … hope to do anything toward closing the one hundred fifty liquor saloons that open upon the streets of Orange,” but at least they should close on Sunday as required by state law, the WCTU wrote in its “Appeal to the Citizens of Orange.” The Society for the Prevention of Crime backed a law to allow wives to forbid barkeepers to sell liquor to their husbands and, with more success, demanded that hat manufacturers sign a public pledge to keep their two thousand workers from drinking on the job. The temperance forces were closely aligned with the Republican Party, which represented the city’s elite plus its small number of African-American citizens, whereas working-class white men and local shopkeepers tended to vote Democratic.

In 1878, local politics took a bizarre turn. Mayor Henry Egner, a Democrat, declined to run for a fourth one-year term after the state legislature refused to allow the mayor to receive a salary. When the city’s Democratic convention met on March 9, three days ahead of the March 12 election, it could find no candidate for the unpaid job. The local Republicans had no better success; their convention’s choice rejected the nomination, and four other men then turned it down. Both parties scrambled to find candidates. A group of Democratic leaders called on Hartford and asked him to run. The reason for the choice is unknown, but Hartford would have bridged the town’s factions: as an officer of a sizable company he would have appealed to Orange’s business elite, while as a Catholic he would have drawn support from the Irish and German immigrants who strongly opposed Prohibition. After initially declining, he accepted the nomination on Monday, March 11. The following day, he was elected mayor by a vote of 932–766.

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