The Kroger Grocery Empire: Barney’s Blueprint for Success

Regional History, Retailing history, Social History

The history of the Kroger Grocery Company has parallels with the Great Atlantic and Pacific Tea Company, another pioneering powerhouse of American food retailing. Both grocery businesses started in the 19th century as tea and coffee purveyors, however Kroger, unlike A&P Tea, has survived through the centuries and still trades today as lucratively as ever. In the 2016 fiscal year Kroger was the largest supermarket chain by revenue in the US (yielding US$115.34 billion). It shares a roost with Walmart at the top of the US retail tree…it is number 2 general retailer behind Walmart in the US, and is the third largest retailer in the world[1].

Origins, growth and expansion of the Kroger name
The man behind the Kroger Company was Bernard Kroger, better known as ‘Barney’. Kroger, the son of German immigrants, got into the retailing world at the basement level – working door-to-door selling coffee first for the Great Northern and Pacific Tea Co and then the Imperial Tea Co. By 1883 Kroger was in business for himself, his first store traded under the name The Great Western Tea Co…soon renamed Kroger Grocery and Baking Co✳. The Cincinnati-based business expanded exponentially into the 20th century, by the end of the 1920s decade Kroger had over 5,500 stores in the US[2].

The Kroger business ethic
Not afflicted with the curse of Hamlet, Barney Kroger was not one to overthink or complicate matters, as his simple motto attested: “Be particular. Never sell anything you would not want yourself.” Kroger’s business style was heavily and idiosyncratically micro-managerial, the businessman personally maintained an account book which meticulously recorded all the firm’s financial transactions. Kroger’s business credo was “First: Do it first. When seasonable goods come into the market, have the first. When prices go down, be the first to reduce them. Second: Never sell anything except for just what it is, and don’t sell it then if it isn’t good. Third: Advertise as liberally as business income permits. Fourth: sell on a small margin and make the turnover rapid”. The Ohoian entrepreneur’s pragmatism emphasised “duplicating and reduplicating…what works”[3].

One of Barney Kroger’s most enduring contributions to grocery retail revolves around his minimum cost/high volume approach to trading. He is remembered for introducing the template of the low-cost grocery chain, still much duplicated in modern retailing. Kroger was also innovative in his store design, adding distinct bakery, meat and seafood departments in his grocery stores[4].

In-house food manufacturers
Bread-making was a good example of the Kroger cost minimisation strategy…at variance with most grocers in the early 20th century who purchased the product from independent bakeries, Barney Kroger baked his own bread. This way he could further cut the price for customers and still make a profit. Kroger after the death of Barney has rapidly expanded its own product manufacturing facilities, now making thousands of comestibles within the company[5].

A typical mid-century Kroger store
Merger juggernaut
From the 1950s on Kroger embarked on an ongoing series of mergers with smaller firms to consolidate its market position in the US grocery/supermarket trade. The most significant of these, in 1999, was with Fred Meyer, Inc., then the fifth biggest American grocer. This new acquisition by Kroger saw it reach a new high of 2,200 stores in 31 states, netting the supermarket giant billions in annual revenue[6].

Kroger innovations
Kroger has led the way in retail grocery innovations…the innovations pioneered by the company include ‘firsts’ for a grocery chain, eg, the routine monitoring of product quality and the scientific testing of foods; testing of electronic scanners. As well Kroger was a pioneer in modern consumer research in grocery lines[7].

Kroger’s position today as a market leader in the US grocery and supermarket field (FN1) rests firmly on the solid foundations laid down by its founder Barney Kroger. Contemporary growth by the company has continued a trajectory of diversification well beyond the grocery staple into fuel centres, florists, drug and convenience stores.

▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁
✳ eventually the company name was shortened simply to Kroger

[1] as at December 2015 Kroger operated a total of 2,778 supermarkets and multi-department stores across 34 American states, ‘Kroger’, Wikipedia, http://Wikipedia.org
[2] ibid.
[3] ‘Bernard Heinrich Kroger (1860-1938)’, (Zachary Garrison, 08-Jun-2011), Immigrant Entrepreneurship: 1730 to the Present, www.immigrantentrepreneurship.org; BM Horstman, ‘Barney Kroger: Hard work, marketing savvy won shoppers’, Cincinnati Post, 17-Jun-1999, www.webarchive.org
[4] Horstman, ibid.; ‘Kroger’, Wikipedia, loc.cit.
[5] ‘History of Kroger’, (Kroger), www.thekrogerco.com
[6] Dana Canedyoct, ‘Kroger to Buy Fred Meyer, Creating Country’s Biggest Grocer’, New York Times, 20-Oct-1998, www.nytimes.com
[7] ‘History of Kroger’, loc.cit.

A&P Tea Co: Once Were Giants of the American Grocery Trade

Popular Culture, Regional History, Retailing history

The year 2015 brought an end to one of the most enduring major retailers in the history of United States business. The Great Atlantic and Pacific Tea Company (universally abbreviated to A&P Tea Co) succumbed after a succession of bankruptcy proceedings played out in the early 2010s (bringing an end to 156 years of continuous retailing in the US).

A&P Tea endgame
The beginnings of A&P Tea’s decline in the retail world harks back as far as the 1950s – the source of the downward trend was its inability to maintain parity with competitors who were opening larger supermarkets that, driven by customer demand, were more modern[1]. Partial sell-offs followed in the seventies and eighties. Things didn’t really improve for the grocery ‘Goliath’ despite sporadic and ephemeral upsurges[2]. In 2010 the company filed for bankruptcy, but were only able to hold on till 2015 when A&P again filed for Chapter 11 bankruptcy, this time being permanently wound up.

A&P store, Westwood, NJ, 1959
According to industry analysts A&P’s demise could be attributed to a misguide focus, and to the company’s failure “to evolve with the changing market”…A&P had a tendency to concentrate on “extracting dollars from its vendors instead of selling to its customers”. This exhibited a woeful neglect when it came to improving the customer experience (George Anderson, editor-in-chief of RetailWire)[3].

The company’s woes were exacerbated by a failure to modernise its look…it doggedly kept its grocery lines to the basics and was disinclined to adapt to changing tastes and interests of consumers with their growing preference for organic, healthy and gourmet foods. Meanwhile its competitors like Whole Foods, The Fresh Market and Kroger were stealing a march on the erstwhile market leader[4].

Humble leather goods origins
Atlantic and Pacific’s company history traces itself back to 1859, founded by George Gilman, as a sideline to his hide and leather importing business. Gilman’s diversification into mail-order tea was so successful that he dropped the leather and Gilman & Co by 1869 had become the Great Atlantic and Pacific Tea Co[5]. A&P Tea’s fortunes rose with the ascent of George Huntington Hartford who assumed control in 1878. George and his sons (affectionately known as “Mr George” and “Mr John”) oversaw the company’s inexorable growth and monopolistic practices[6].

A&P Tea at its zenith
At its peak in the 1930s (with the Hartford brothers still ensconced at the helm), A&P was by far the largest grocery chain in the US with 15,709 stores in 39 of the 48 states plus parts of Canada. The tea and coffee merchants had already diversified into bakeries and pastry and candy shops, and introduced innovations in food retailing such as pre-packaged meats and food-testing laboratories (pioneers of quality assurance)[7]. The Economy Store was another A&P concept: small stores located in secondary streets, away from the main street (comparison with King Kullen), inexpensive “no frills” lines; operated by only one or two staff members; low cost, high volume[8].

Slow to embrace the supermarket concept
The Hartfords were unimpressed by and reluctant to adopt the model of the supermarket, pioneered by King Kullen and others. Finally in 1936 A&P opened their first supermarket in Braddock, PA. Eventually the company’s supermarkets came to replace the increasing obsolete Economy Stores[9].

1928 A&P grocery ad
When it came to reading changing consumer preferences after WWII, A&P Tea, as was the case with F.W. Woolworth, was slow to move its stores from the urban centres to the suburbs, thus falling behind rivals like K-Mart, Safeway and Kroger in this respect. From the 1960s on A&P experimented with discount stores A-Mart (folded as its name was too like K-Mart!) and WEO (Warehouse Economy Outlet) with moderate results[9]…A&P sales continued to flatten out, it continue to jettison stores into the 21st century, with its market share haemorrhaging in the fierce onslaught of rising powerhouses such as Walmart[10].

PostScript: Legacy of the retailing ‘Goliath’
The heights to which Greater Atlantic and Pacific Tea Co rose in its heyday were of Everest proportions. Until 1965 A&P Tea Co was the largest US retailer of any kind…between 1915 and 1975 A&P was the largest food/grocery retailer in the US…until 1982 the company was also America’s largest food manufacturer. According to the Wall Street Journal A&P Tea Co was “as well known as McDonald’s or Google is today” and was lionised in the world of North American retail traders as “Walmart before Walmart”[11]. By the end of the 1920s A&P had become the first retailer to sell US$1 billion worth of goods[12].

⚎⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚍⚎
[1] WI Walsh, The Rise and Decline of the Great Atlantic and Pacific Tea Company (1986)
[2] ibid.
[3] Hayley Fitzpatrick, ‘A&P made one mistake that undermined its business’, Business Insider Australia, 22-Jul-2015, www.businesinsider.com.au
[4] ibid.
[5] Marc Levinson, The Great A&P and the Struggle for Small Business in America, (2011)
[6] A 1946 US Federal Court ruling found the Hartford brothers guilty of illegal restraint of trade by using A&P’s size and market power to keep prices artificially low, ibid.
[7] ‘The Great Atlantic & Pacific Tea Company, Inc’, Encyclopedia.com, www.encyclopedia.com
[8] ‘A&P: The Early Years’, Groceteria.com, www.grocetaria.com
[9] ibid.
[10] Levinson, op.cit.
[11] ‘The Great Atlantic Pacific Tea Company’, Wikipedia, http://en.m.wikipedia.org
[12] Levinson, op.cit.

Prototype of the Modern Supermarket: King Kullen

Regional History, Retailing history, Society & Culture

The big players in US supermarkets in 2017 are names like Kroger, Costco and Safeway❈ but long before Costco, Safeway and Walmart existed and whilst Kroger was still a cash-and-carry grocer, there was King Kullen.

Founder of King Kullen
The entrepreneur behind the King Kullen story was Michael J Cullen – Cullen was an ex-employee of the Kroger Company (and before that he had worked for the famous Great Atlantic & Pacific Tea Company, better known simply as A & P Tea). The manner by which Cullen came to start up his own supermarket chain is a classic story of turning rejection into a virtue. Cullen was managing a number of small Kroger stores in the late 1920s and identified a raft of improvements to the way Kroger did business that he believed, if implemented, would increase the company’s revenue tenfold. Cullen wrote to the Vice President of Kroger with his suggestions for a new, revolutionary type of dry goods/grocery store. In his letter Cullen envisaged “monstrous stores, size of same to be about forty feet wide and hundred and thirty to a hundred and sixty feet deep…located one to three blocks from the high rent district with plenty of parking space, and same to be operated as a semi-self-service store – twenty percent service and eighty percent self-service”, low prices and cash sales[1].

Kroger’s VP, whether through indifference, complacency or sheer lack of business nous, did not reply to his branch manager’s suggestions. Cullen, rebuffed but confident in the efficacy of his own store model, resigned from Kroger and set about realising the kind of new revolutionary grocery store he had envisaged. Settling his family in Long Island, Cullen found a vacant warehouse in Jamaica (Queens) with 6,000 square feet of space, which he chose as the optimal retail location. Cullen’s new store, which he dubbed “King Kullen”, opened its doors for business in August 1930[2].

King Kullen, Queens
Billing itself as the “World’s Greatest Price Wrecker”, King Kullen was an instant success in New York with its formula of high volume and low cost…KK’s slogan was “Pile it high, sell it low!” Customers were willing to travel up to 30 miles to the Queens store to cash in on the bargains[3]. The American Food Marketing Institute (FMI) Identified the contribution of King Kullen as “serv(ing) as a catalyst for a new age in food retailing” and the Long Island-based grocery company is widely thought to be the first example of the modern supermarket. King Kullen’s reputation as the prototype form of supermarket (or at the very least a strong candidate for being so) rests in part on the endorsement given it by the Smithsonian Institute…FMI in 1980 with funding from the Heinz Corporation) initiated research by the Smithsonian which concluded that King Kullen met its five-point criteria for a supermarket, viz. it provided separate departments for produce; it offered self-service; it offered discount pricing; it conducted chain marketing; and it dealt in high volume quantities[4].

Under Cullen’s leadership the supermarket chain grew exponentially…8 stores by 1932 (each new store bigger than the preceding one), 17 stores by 1936 with annual sales of $6 (this despite a climate of economic depression)[5]. To match the “belt-tightening” days of the Depression and deliver the lowest possible prices, Cullen took a “no frills” approach to his King Kullen stores – facilities were simple, service was minimal. Unexpectedly though, just as he was about to expand King Kullen nationally and into franchising, Cullen died suddenly in 1936, aged only 52 [6].

Cullen’s wife and children continued King Kullen after his death. In 1961 it was listed as a public company however the family retained a controlling interest. King Kullen, after going through a static period, not changing with the times, was revamped and modernised from 1969, growing the business to a total of 55 New York stores by 1983[7].

King Kullen eventually diversified into bakeries, delicatessens, florists, pharmacies and health products, in addition to its staple of produce lines. Today it maintains a modest but healthy market position in New York, operating a chain of supermarkets (around 35 in total) in the Long Island area, concentrated in Nassau and Suffolk counties.

﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌
❈ Walmart in groceries and food sales are the overall dominant competitor in the market but its retail outlets tend to be hypermarkets rather than supermarkets

[1] ‘About King Kullen Supermarkets’, (King Kullen: America’s First Supermarket), www.kingkullen.com
[2] ‘King Kullen’, Wikipedia, http://en.m.wikipedia.org
[3] ‘King Kullen Grocery Co., Inc. History’, (Funding Universe), www.fundinguniverse.com
[4] D Simionis [Ed], Inventors and Inventions, (2008);
Funding Universe, op.cit.
[5] King Kullen: America’s First Supermarket, loc.cit.
[6] ‘Michael J Cullen’, http://en.m.wikipedia.org
[7] Funding Universe, op.cit.

A Revolutionary Retailer: Piggly Wiggly, Keedoozle and Foodelectric – Antecedents of the Modern Supermarket

Regional History, Retailing history, Society & Culture

In an episode of the 2012 series of The Hairy Bikers the English BMW-riding celebrity chefs from “Oop North” do a road trip through the gastronomical delights of America’s Mississippi River Valley. Whilst the two girth-challenged biker-chefs are in Memphis, Tennessee, to check out the local speciality of soul stew and fried chicken, they make a visit to a Piggly Wiggly store, or at least to a replica of the famous original store encapsulated in a local museum, formerly the pink palatial mansion (pictured above) of Piggly Wiggly’s founder.

Piggly Wiggly (established 1916) and its 1930s successor Keedoozle were the brainchild of businessman Clarence Saunders – these stores were thought to represent the first forays into self-service grocery retailing. Prior to Saunders’ innovation, grocery store customers (in a typical corner store) would line up with their grocery lists, the clerk would take their lists in turn and scoot around the store collecting the orders whilst the customers waited. When completed, the clerk would bag all their items, and then go on to the next customer. Saunders’ revolutionary self-serve idea was: customers enter the store through a turnstile, collect a shopping basket which they’d cart round the shelves selecting the items they want and then proceed to the checkout.

Piggly Wiggly’s foundation store ca 1916
For 100% self-service to work, the store’s layout of merchandise had to be completely rearranged. As Ashley Ross put it, “the products had to do the tempting”, the store owner had to draw the shopper’s attention to the merchandise. Candy and impulse items were strategically placed at the checkout where they would be easily noticed[1]. All items in the Piggly Wiggly (PW) store were price-marked for the shopper’s convenience, the clerks no longer required to do the fetching were freed up to keep the shelves stocked with dry goods and to assist customers. Another innovation, the shop attendants were issued with uniforms, as was the use of refrigerated cases[2]. Because PW operated on a high volume/low profit margin, lower costs were passed on to the customers. By drawing customers away from speciality retail stores the prices could be further lowered. PW Saunders’ self-serving store was the “supermarket franchise model” of the future, and as John Stanton (professor of the history of food marketing at Saint Joseph’s University, Pennysylvania) noted, the PW merchandise model was basically “the origin of branding”[3].

Copycats of the self-serve template
Saunders’ self-service stores were an immediate success…by 1922 there were 1,200 stores across 29 US states, 10 years later this number had ballooned out to 2,660 stores[4]. PW’s financial bonanza (over $180m turnover by 1932) spawned numerous imitators in the US retail industry – Handy Andy, Helpy Selfy, Mick-or-Mack, Jitney Jungle – all operating under Saunders’ patent system earning him royalties[5]. Another of the rival chains won no commendations for subtlety or originality in calling its derivative store idea, Hoggly Woogly!

‘Sole Owner of My Name’
Saunders’ substantial wealth derived from PW received a blow when the company’s share price on the New York Stock Exchange bottomed out after a bear raid by market speculators. Consequently Saunders lost $3 million and was forced into bankruptcy in the 1920s❈, ending his involvement with the company. The ‘Piggly Wiggly’ brand still operates with over 600 stores in 17 states, but it has no connection with Saunders’ family or descendants. In 1928 Saunders started up a new grocery chain which he called the Clarence Saunders Sole Owner of My Name Stores…the business initially flourished, accumulating 675 stores⚀. However with the onset of the Great Depression it also went into bankruptcy in 1930[6].

Keedoozle vending machines 1948 (Source: Francis Miller/Life)
Keedoozle 1.0 and 2.0
The indefatigable Saunders was soon at it again, devising a new take on his idea of a revolutionary grocery enterprise. In 1937 this materialised with Keedoozle – the prototype of an automated store. The name apparently a contraction of “key-does-all”✾…it worked like this, upon entering the store customers received a key which they used to access the merchandise. The complicated sounding process involved taking the items and a ticker tape from glass-enclosed cases (resembling vending machines) to the cashier who inserted the tape into a “translator machine” which had a two-fold action: it triggered electrical impulses which transported the goods down a conveyor belt, and at the same time adding up the customer’s bill. The added benefit for the customer, apart from convenience and speed, Saunders claimed would be 10-15% cheaper prices than Keedoozle’s competitors[7].

In practice though, things didn’t go to plan. The electrical circuits couldn’t cope with the traffic during peak hours, there were breakdowns (unreliable machinery, high maintenance costs)…and delays (compounded by a tardy conveyor belt system). Customers regularly got someone else’s orders. In all Saunders had three attempts at getting the automated service right. In 1948 he came up with (another) new, ‘improved’ version of Keedoozle…again the re-launch was accompanied by Saunders’ penchant for extravagant claims[8]. Alas, this venture also met the same fate of the earlier projects, eventual bankruptcy.

Foodelectric
All of the grocery store projects that Saunders launched went pear-shaped in the end. One last hurray for the grocery pioneer was meant to be his Foodelectric concept. As heralded by Saunders, Foodelectric would take retail automation to another level – the customer would “act as her own cashier”, doing the collecting and wrapping of the purchases herself. According to Saunders, it would “cut overhead expenses and enable a small staff to handle a tremendous volume”. Saunders’ new innovation with Foodelectric was the “shopping brain”, a portable primitive computer which allows the shopper to select and despatch the items, whilst registering the prices on the computer window[9].

C Saunders, visionary grocer
Unfortunately Saunders died in 1953 before he could open the first Foodelectric store. The track records of Piggly Wiggly, Sole Owner Stores and especially Keedoozle were not stellar success stories in the world of retail grocery, the notion of triple-bankruptcy does not connote good business acumen. But Saunders was a visionary thinker-outside-the-box, his concepts and novelties in the field were decades ahead of their time…the Memphis grocer is remembered today for pioneering a nascent sales model of self-service which paved the way for the development of the modern supermarket.

PostScript: Piggly Wiggly or Alpha Beta?
PW’s and Saunders’ claim to being the originator of American self-serve stores could be contested by Alpha Beta a Southern Californian grocery chain which opened its doors in 1914 (two years before PW). Alpha Beta also experimented with self-service – goods in its stores were arranged alphabetically (hence the company’s name). Alpha Beta merged with American Stores in 1961 and by 1973 it could boast to having over 200 supermarkets in California (unlike PW though, AB remained a regional, Californian phenomena). After a further merger with Lucky Stores in 1988 the “Alpha Beta” brand name ceased to exist[10].

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
❈ also lost by Saunders due to his financial woes was the Georgian marble “pink palace” mansion, today the Memphis Pink Palace Museum and Planetarium which the Hairy Bikers visited on their American South culinary quest
⚀ Saunders established his own professional (American) football team to promote the new grocery venture, predictably the team was called the “Clarence Saunders Sole Owner of My Name Tigers”
✾ Saunders seems to contradict this explanation of the name’s origin in the ‘Life’ magazine article cited below

[1] A Ross, ‘The Surprising Way a Supermarket Changed the World’, Time, 09-Sep-2016, www.time.com
[2] B Saar, ” ‘Keedoozle’ evolving into swiping”, (The Hawk Eye), 03-Aug-2003, http://sparky.thehawkeye.com
[3] Ross, loc.cit.
[4] ‘Piggly Wiggly’, Wikipedia, http://wikipedia.org
[5] PH Nystrom, Economics of Retailing (1930), cited in ibid.
[6] ‘Clarence Saunders (Grocer)’, Wikipedia, http://wikipedia.org
[7] B Cosgrove, ‘We Hardly Knew Ye: Remembering America’s First Automated Grocery Keedoozle’, Time, 25-Aug-2014, www.time.com
[8] “In five years”, he boldly (and unwisely) asserted in 1948, “there will be a thousand Keedoozles throughout the U.S. selling $5 billion worth of goods” (in reality there was only ever three (Memphis) built between 1937 and 1949!), ‘Saunders is sure Keedoozle will build his third fortune’, Life, 3-Jan-1949; Cosgrove, ibid.
[9] Life, loc.cit.
[10] ‘A Quick History of the Supermarket’, Groceteria.com Exploring supermarket history, www.groceteria.com

Port Chicago 1944 – A Black and White Situation: The Naval Mutiny and its Ramifications

Military history, Racial politics, Retailing history, Society & Culture

San Francisco Bay
On 17th July 1944 a catastrophically massive explosion at the Port Chicago Naval Magazine in California resulted in the loss of 320 lives, the majority African-American sailors. Less than four weeks after the worst wartime disaster on American home soil, the Navy, without regard for the sensitivity of the situation, instructed the surviving Black sailors to resume loading munitions onto the USS Sangay standing at the dock. 258 of them refused, contending that the conditions at the dock being still unsafe, and commenced a work stoppage. Threatened with court-martial (and a possible death penalty) 208 of the sailors eventually backed down. The navy authorities subsequently took punitive measures against these seamen (forfeiture of pay, pension entitlements curtailed) and they were eventually returned to service elsewhere[1].

The remaining 50 were charged by the Navy with mutiny. The defence counsel and the African-American men themselves denied this charge all through the proceedings, arguing that at no time were they attempting to seize control from the frontline commanders or overthrow the authority of the Navy (as argued by the prosecution team), but were refusing to work in what was clearly an unsafe environment, a protest against their being used as “guinea pigs”[2]. As Robert Allen explained, the mutiny charge was levelled against the defendants because the rightful description of what they were doing, striking against deleterious working conditions, only applied to the civilian sphere[3].

The trial of the “Port Chicago 50”
A court-martial was arraigned to be held on the Navy’s administrative facility at Treasure Island in San Francisco Bay. The conduct of the trial was a travesty of equality before the law for the African-American servicemen involved … the accused black sailors were ridiculed as ‘primitive’ in their intellectual abilities, and “unreliable, emotional, lack(ing) capacity to understand or remember orders or instructions” (as the official ‘Finding of Facts’ stated[4]. The court hearings disintegrated into a shambles at times, eg, the judge fell asleep during the testimonies. After a six-week trial and a deliberation of only 60 minutes, a verdict was reached with unseemly haste – all 50 of the accused were found guilty of mutiny. The 50 convicted seamen were sentenced to between eight and 15 years imprisonment with hard labour as well as being on the receiving end of dishonourable discharges from the Navy[5].

Treasure Island court-martial site
One keen observer who attended the day-to-day court proceedings was NAACP❈’s Thurgood Marshall (later to become the first African-American judge of the US Supreme Court). Marshall was publicly critical of the trial, announcing: “This is not 50 men on trial for mutiny. This is the Navy on trial for its whole vicious policy towards Negros. Negroes in the Navy don’t mind loading ammunition. They just want to know why they are the only ones doing the loading!”[6]. In 1945 the NAACP produced a pamphlet entitled ‘Mutiny? The Real Story of How the Navy Branded 50 Fear-shocked Sailors as Mutineers’. Marshall and the NAACP focussed the issue very squarely on the racial dimension … the treatment of the convicted men was symptomatic of a broader pattern of discrimination by the Navy against African-Americans – by mid-1943 there were 100,000 Black men serving in the Navy, but not a single Black officer among them[7]. Marshall organised an appeal on behalf of the 50 prisoners, however in June 1945 the original verdict was reaffirmed by the naval authorities.

Aftermath and consequences of the mutiny trial
The Port Chicago mutiny had an immediate punitive outcome for the 50 Black sailors who were prosecuted, but in the long run it was a Pyrrhic victory for scientific (sic) racists and White supremacists (covert and overt) both inside and outside the military. The whole episode served to raise national consciousness about practices of racial discrimination within the US military forces. And it was to prove a catalyst and inspiration for the postwar Civil Rights movement[8]. For the Navy the ramifications of Port Chicago made itself felt in short time. By the end of the World War the Navy had, in piecemeal fashion, initiated its own reforms of discriminatory practices, anticipating President Truman’s official decreeing of desegregation of the American armed forces – which did not come into law until 1948. With the world war over the Navy found it untenable to justify the continuing incarceration of the Port Chicago 50 … in January 1946 all of the men were released and assigned to other details overseas. Significantly though, none received pardons for their ‘crimes’, the convictions remained on the books[9].

A dangerous job for White servicemen!
The Port Chicago episode – a closed book reopened?
As Erika Doss has noted, “for decades the full story of the Port Chicago disaster of July 1944 was declared “classified” information and rendered virtually absent from historical narratives of the “good war”[10]. The egregious treatment of African-American seamen remained an inconvenient chapter in America’s war history, one best forgotten (Port Chicago’s subsequent name change seems intended to support this objective of burying the thorny facts of the episode).

By the 1990s the whole shameful business had started to become more openly addressed … in 1994 a memorial to the Port Chicago 50 was created on the former base’s site. But in the same year these good intentions were turned on their head by a fresh Navy inquiry which found (unbelievably) that race was not a factor in the 1944 court case – a finding that would not be out-of-place in the annals of the “Flat Earth Society”!

A number of the convicted African-Americans then still alive agitated for a just resolution, a reversal of the wrongs perpetrated against them. One of “the 50”, Freddie Meeks was talked into requesting a pardon which was finally granted in 1999 by President Clinton[11]. However five others including Joe Small refused to request the same, steadfastly insisting that as they had committed no criminal act, they was no question of seeking a pardon.

PostScript: High hopes for justice with Obama
The continued denial of justice for the Port Chicago 50 led it to become a cause célèbre in the US. This remains the case in 2017 despite the fact that all of the convicted African-American sailors are now dead. Their relatives were among those calling on the Black president, Barack Obama, to exonerate “the 50” and overturn their verdicts. Disappointingly, Obama’s outgoing powers of presidential pardon, recently enacted, did not include any of the Port Chicago 50 in its number – though this was more to do with the Obama administration’s inability to find a legal mechanism to make this a reality, rather than any lack of will on the part of the president[12].

﹌﹌﹋﹌﹋﹌﹋﹌﹋﹋﹌﹋﹌﹋﹌﹋﹌﹋﹋﹌﹌﹋﹌﹋﹌﹋﹌﹋﹌﹋﹌﹋﹋﹌﹋﹌﹌
❈ National Association for the Advancement of Colored People

[1] ‘Port Chicago mutiny’, Wikipedia, http://en.m.wikipedia.org
[2] Joe Small, one of the survivors of the disaster and labelled as a ‘ringleader’ by the Navy, summed up the position taken by the 50 defendants,
“(we) weren’t trying to shirk work. But to go back to work under the same conditions, with no improvements, no change, the same group of officers…we thought there was a better alternative”, E Doss, “Commemorating the Port Chicago Naval Magazine Disaster of 1944: Remembering the Racial Injustices of the ‘Good War’ in Contemporary America’, American Studies Journal, Number 59 (2015), www.asjournal.org
[3] B Bergman, “War, ‘mutiny’ and civil rights: Remembering Port Chicago”, Berkeley News, 10-Jul-2014, www.berkeley.edu
[4] A Gustafson, ‘The Port Chicago Disaster: Race and the Navy in World War II’, (Turnstile Tours), 29-Aug-2014, www.turnstiletours.com
[5] Bergman, loc.cit.
[6] Marshall, quoted in NA Hamilton, ‘Rebels and Renegades: A Chronology of Social and Political Dissent in the United States’, (2002)
[7] Doss, loc.cit.
[8] ibid.
[9] US Secretary of the Navy James V Forrestal and Admiral Ernest King, working together, were instrumental in getting the wheels of integration in the Navy going forward, S Sundin, ‘Port Chicago – Desegregation of the US Navy’, (Sarah’s Blog), 28-Jul-2014, www.sarahsundin.com
[10] Doss, op.cit.
[11] C Nolte, ‘Clinton Pardons Wartime ‘Mutineer’ / Port Chicago black sailor of 50 in infamous case’, (SFGate), 24-Dec-1999, wwwsfgate.com
[12] ‘Full list: Obama pardons these 78 people, shortens 153 prisoners’ sentences’, (Pix 11), 19-Dec-2016, www.pix11.com

The Mass Appeal of Woolworths: A Brand Name Worth Copying

Popular Culture, Retailing history

The seeming ubiquity of Woolies?
Woolworths is an internationally known name synonymous with traditional merchandising expertise. When I was a kid I thought that the Woolworths variety store-cum-supermarket chain in cities and towns strewn all around Australia and New Zealand was an offshoot of the famous pioneering Woolworths “dime and nickel” company in the US. Until I actually went to South Africa I wasn’t even aware that there was Woolworths in that country as well. When I did discover its existence travelling around the RSA garden route I initially assumed that it too was a spoke in the far-reaching American F W Woolworth imperial retail wheel.

A traditional urban myth punctured
Only much, much later did I learn of the total absence of any business or corporate connection between the three ‘Woolworths’ entities. Both the retail chain in Australasia and the one in South Africa got the name ‘Woolworths’ through the same legalistic loophole. When a collection of businessmen began the Australian retail enterprise they acquired the name because the original American company had not registered the name in NSW (or anywhere in Australia). Thus the first store in Sydney CBD’s Imperial Arcade in 1924 was called Woolworths Stupendous Bargain Basement. The transition to the eventual nomenclature used (simply ‘Woolworths’) was not quite that simple. Before settling on ‘Woolworths’, the first notion that came to Percy Christmas (Woolworth’s inaugural CEO) and his directors was to call it ‘Wallworths Bazaar’, a pun on the American retailer’s name[1].

Somerset Mall Woolies
Western Cape RSA
Similarly, the South African ‘Woolworths’ acquired the name because there was no legal trademark impediment to it using the name in South Africa. Founder Max Sonnenberg and his son Richard started the first Woolworths store in Cape Town in 1931, and like the Australian namesake it has never had any financial connection to the prior existing F W Woolworth Co business. Woolworths South Africa-style was a different sort of retail animal, modelling itself on the upmarket British Marks and Spencer rather than the F W Woolworth bargain basement store concept[2].

Woolworths ground zero: Creating the retail template
The American phenomenon started in 1878 when Frank Winfield Woolworth, son of a poor potato farmer, started his first store in Utica, New York, the basis of his business strategy was to sell a wide selection of items at low price (initially all the merchandise was set at 5 cents each). The store was poorly located and failed abjectly but Woolworth persisted, opening a second dry goods and variety store the following year in Lancaster, Pennsylvania, and the formula eventually caught on. The entrepreneur expanded his store concept to a “five-and-dime” one (items set at 5¢ and 10¢ each).

The early F W Woolworth & Co
Woolworth’s brother Charles (known as ‘Sum”) got in on the business, starting up his own retail stores soon after his older brother’s. Frank expanded F W Woolworth Co into a chain by mergers and partnerships with his cousin Seymour Knox I and with other relatives and friends❈. By gathering together a little club of owners Woolworth could purchase large quantities of goods directly from the manufacturers. As the US stores multiplied and prospered, Frank, remembering his own disadvantaged childhood, took pride in the fact that the “ordinary man” could afford to buy from Woolworth stores[3].

From 1890 FWW would embark on annual (sometimes biannual) large-scale buying trips to Europe, always paying the suppliers in cash on principle. Exposure to European manufacturers promoted awareness of market potentiality in other countries and may have prompted Woolworth’s eventual decision to branch out internationally. Anglophile Frank had his eye firmly on Britain as his 1890 trip diary indicates: “a good penny and sixpence store, run by a live Yankee, would be a sensation here”[4]. The chain had already extended north to Canada and subsidiaries were launched in the UK, Germany, Austria, Mexico and Cuba. The UK Woolworth sub-set itself opened stores in the Republic of Ireland, Palestine, Cyprus, the British West Indies and Southern Rhodesia (now Zimbabwe).

British F W Woolworth
Woolworths came to Britain in 1909 with the first store, selling clothing, stationary and toys, opening in Liverpool in northern England (family cousin Fred Moore Woolworth was the British arm’s first managing director). The pricing strategy matched the US “five-and-dime” one with items selling at 3d and 6d. The British chain flourished from the 1920s on, becoming a household name through the UK, so much so that most consumers in Britain and Ireland believed that their ‘Woolies’ shops were a local invention, “where sixpence once went a long way”[5].

Like the parent company in America, British Woolworths proved a retail innovator. The Liverpool store introduced lunch counters (followed by Blackpool and other large UK stores)回, which were the precursor to the standard food courts which became integral to shopping malls later in the 20th century[6]. The Woolies restaurants also adhered to the 3d and 6d price formula, although by 1941 there had been some increases, eg, a split lobster salad had risen to the princely sum of one shilling (12d or 1/-)[7].

Woolworth UK’s rise and fall
The 1930s marked a high point for Woolworth in the UK … outside of the Christmas season the chain was opening a new store every five days! During the price inflation of the late 1930s the Woolworth giant kept the sixpence limit on its prices by asserting its buying power to coerce suppliers into accepting lower margins for their goods¤. By 1958 F W Woolworth Co had amassed 1,000 branches in Britain[8].

The first signs of the downturn in Woolworth UK’s fortunes can be traced from the 1960s, the parent company forced the British arm into introducing Woolco, a series of one stop shops usually located out-of-town. These did not succeed, as they had in America because the UK lacked the US’s higher car ownership which suited out-of-town shopping. This was also an unwise move away from Woolworth UK’s strength, its high street stores. The UK business’ problems continued in the 1970s – Britain’s decimalisation in 1971 caught Woolworth unprepared because unlike other retailers it had resisted the move to self-service. The upshot was costly to Woolworth (£5 million and a five-year process trying to replace their over-abundance of store cash registers. Also in the 1970s a number of Woolworth stores in Britain and Northern Ireland burned down, attributed at least in part in incompetent and short-sighted management … resulting in brand damage to the trusted F W Woolworth name from which it never entirely recovered[9].

Closing down: Bromsgrove store (Worcs.)
British elements (principally Kingfisher plc) finally gained a controlling interest in the UK enterprise in 1982, but Woolies, this British institution on the retail landscape ultimately fell foul of intense competition from cut-price retailers … many customers defected to British supermarket giants Tesco and Sainsbury’s. Falling sales❀ and a cash-flow crisis affected its entertainment arm. The downturn was exacerbated by the adverse effects of the Global Financial Crisis of the late 2000s. In 2007 Britain’s Woolworth Co experienced its first trading loss in 95 years … and much worst was to come. Over Christmas 2008 807 stores in the UK closed. With Deloitte’s administrating, the whole Woolworth chain had a complete shutdown over a 41 day period (months short of what would have been 100 years of operation in the UK). The carve-up saw restructure specialists Hilco Capital acquire the retail business and the Shop Direct Group (owned by the Barclay brothers) taking over the online retail sector … this too however was closed down in 2015[10].

Rise and fall of the prototype organisation
The America parent Woolworth company was spectacularly successful in creating a chain of “cash-and-carry” dime stores. By 1977 there were 3,414 stores in the US, Puerto Rico and the Virgin Islands and 1,884 outside of the US[11]. The pioneering merchandising methods of F W Woolworth with the founder’s emphasis on sales and customer service, and direct purchasing, established a solid base to enable his successors as CEO to continue to sustain and grow the Woolworth retail empire. However after WWII there was shift in the nature of shopping propelled by the burgeoning car culture … retailing in America and elsewhere moved on from the high street stores which had been the mainstay of Woolworth to the new malls located in the suburbs. Woolworth tried slowly to adjust but found itself less able to adapt to this change than its major competitors.

By the 1960s the original five-and-dime stores had morphed into other commercial entities: whilst the Woolworth flagship was retained there was a move into speciality stores and the large discount retail chain Woolco, which had a measure of success. Through the eighties and into the nineties the ailing FWW giant lingered on.

In 1997 F W Woolworth Co in the US folded, following years of diminishing competitiveness with its rivals (the chain in 1996 posted a crippling loss of $US37 million). The Venator Group took its place and F W Woolworth ceased to be a trading name. Venator’s retail focus fixed on the foot ware market with Foot Locker and Kinney Shoes. This was a sudden end to a gradual process by which Woolworth Five-and-Dimes were overtaken by the likes of more dynamic enterprises, Wal-Mart, Kmart (formerly Kresge), Target and other commercial players who adapted to change far better than the veteran Woolworth[12].

F W Woolworth Co ultimately suffered the same fate as the British Woolworth – an accumulated obsolescence. As Jennifer Steinhauer summarised its plight, it had “faded in the collective memory of a nation warmly nostalgic for old stores but not willing to shop in them”. The pioneering retailer had become increasingly irrelevant to American consumers … the advantage of convenience it once possessed (where shoppers could get “lipstick, diapers and a milk shake at a discount, all under the one roof”) was now all-too-easily available at the abundance of handy drugstores, supermarkets and discount stores popping up everywhere[13].

PostScript: South Africa and Australia – Higher and Higher
Whilst the Woolworths brand name no longer decorates the urban commercial landscape in the US and Britain, the Woolworths name in the Southern Hemisphere is a different story. Over the last 20 years both Woolworths Holdings Limited (RSA) and Woolworths Limited (Australia) have experienced impressive growth through expansion and diversification.

Woolworths Holdings Ltd (WHL) achieved a net income of R3.12 billion in 2015 as a provider of clothing, footwear, accessories, groceries, beauty products, home wares and financial services. WHL has pursued an aggressive campaign of expansion, taking over companies in South Africa (Mimco, Trenery) and Australia (David Jones stores, Country Road, Witchery).

Woolworths Casula (NSW)
Woolworths Limited (WL) made a net surplus of A$1.2 billion in 2016 with its variety stores (Big W), supermarkets (Countdown, Food For Less, Safeway, Flemings, etc), grocers (Thomas Dux). Part of the company’s impressive growth has come from diversification – into petrol stations (Caltex-Woolworths) and into liquor stores (taking over BWS and Dan Murphy’s), hotels and gambling (Australian Leisure and Hospitality Group)[14]. The Aussie Woolworths brand currently maintains a presence in Australia, New Zealand and India▤.

Business success aside, it has not been all smooth sailing for the RSA and Australian companies … both WHL and WL have been embroiled in controversies in their home countries from time to time. In 2010 WHL removed Christian magazines from its shelves (a financial decision by Woolworths), provoking a huge outcry from the powerful Christian community in South Africa with WHL having to back down[15]. WL’s move into alcohol has been extremely profitable (together with Coles it is estimated to account for ¾ of Australian liquor sales). Allied to this is Woolworths’ impact on poker machine gambling … through its ALH arm it has in excess of 12,650 pokies in pubs. Anti-gambling campaigners have accused WL of targeting children to push up pub sales by offering loyalty reward cards to frequent gamblers (and placing “Kid’s Club” playgrounds close to the poker machine areas in its hotels)[16].

﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌
❈ FWW’s mergers absorbed Knox & Co, Kirby & Co, Charlton & Co, C S Woolworth & Co and Moore & Co
回 the concept was an elaboration on F W Woolworth’s ‘Soda Fountain’ introduced in his Lancaster (US) store in 1907
¤ a similar bullying practice to that used by Woolworths Australia (and its rival Coles) this decade against local manufacturers
❀ one exception being the old Woolies favourite, the pick ‘n’ mix confectionary lines
▤ in 1989 Industrial Equity Ltd (IEL), part of the AdSteam Group (Adelaide Steamship Company), successfully took over Woolworths Australia … however the Woolworths company was subsequently publicly floated several years later

[1] ‘Woolworths Limited’, Wikipedia, www.em.n.wiki.org
[2] after WWII the South African firm actually had a business relationship with Marks and Spencer for a number of years, ‘Woolworths (South Africa)’, Wikipedia, www.em.n.wikipedia.org
[3] One incident in particular resounded with him, being unable to afford an item in a Watertown store as a child, ‘Biography of F.W. Woolworth’, (Woolworths Museum),www.woolworthsmuseum.co.uk
[4] J Robinson, ‘Woolworths: the rise and fall of the departmental store giant’, The Guardian (London), 20-Nov-2008, www.theguardian.com
[5] ‘Christmas Past and Christmas Presents’, (Woolworths Museum), www.woolworthsmuseum.co.uk
[6] ‘The British Lunch Counter 1938-41’, (Woolworths Museum), www.woolworthsmuseum.co.uk
[7] ibid.
[8],’A potted history of F.W. Woolworth’, (Woolworths Museum), www.woolworthsmuseum.co.uk
[9] ibid.;’Preparing for decimalisation “D-Day” on 15 February 1971′, in ibid.
[10] ibid.; Robinson, op.cit.
[11] J N Ingham, Biographical Dictionary of American Business Leaders, Vol. 4
[12] F W Woolworth also tended to cling to outmoded lines, eg, in its toy department old-fashioned puzzles and no action figures, J Steinhauer, ‘Woolworth’s Give Up the Five-and-Dime, New York Times, 18-Jul-1997, www.nyt.com
[13] Woolworth Co’s competitors ultimately offered more choice of products, quicker checkouts and often lower prices,ibid
[14] Woolworths’ move into hardware stores via Masters Home Improvement was far less successful with the retail giant getting badly singed, E Stewart, ‘Masters: Five reasons Woolworths is pulling the plug on struggling hardware chain’, 18-Jan-2017, ABC News, www.mobile.abc.net.au
[15] ‘Woolworths (South Africa)’, op.cit.
[16] L Mulligan, ‘Woolworths under fire from anti-poker machine groups for introducing gambling rewards card in pubs’, ABC News, 17-Sep-2015, www.abc.net.au