Great Atlantic and Pacific Tea Company Summary

  • Last updated on November 10, 2022

The Great Atlantic and Pacific Tea Company (A&P) was America’s first retail chain and made a lasting impact on the distribution of food in the United States.

George P. Gilman and George H. Hartford had a new concept for selling tea: direct buying, eliminating all middlemen, and taking only a small profit per pound. Using this concept, the two men started a small tea company in New York City in 1859. Two years later, it was named the Great American Tea Company. They developed the Club Plan, a nationwide mail-order concept that created an incentive for merchants or individuals to band into “clubs” so that they could purchase quality tea below prevailing prices. Another innovation was a money-back guarantee to customers not satisfied with any purchase. Within a few years, the company captured a notable share of the tea market. In 1869, to indicate future plans for expansion, the company was renamed the Great Atlantic and Pacific Tea Company.Great Atlantic and Pacific Tea Company

By 1871, A&P had opened a store in Chicago, the first store west of New York City. To generate more business, A&P sold tea at wholesale to independent peddlers and subsequently established its own wagon routes, adding an extensive line of condiments and household items. New stores opened as far west as on the Mississippi River, and by 1878, the company had more than one hundred retail stores. During the 1880’s, the company added new products, including A&P baking powder and Eight O’Clock coffee. Innovations continued to increase business. In 1912, the company began opening Economy Stores, thus demonstrating that food could be sold at a substantially lower prices by buying in bulk and setting up standardized, no-frills stores. Within fifteen years, the company grew to more than 15,000 stores with an annual sales volume exceeding $1 billion.

In October, 1929, A&P was on top of the food retailing world, apparently unaffected by the Depression. Some competitors went bankrupt; others formed a new method of retailing, and the American Supermarketssupermarket was born. Thinking the supermarket was a fad, A&P ignored an initial downturn in its business. However, it became apparent that supermarkets were the future, and A&P began to convert its operations. By the end of 1950, 15,000 small stores had been converted to more than 4,000 supermarkets. However, competition began to affect A&P’s sales, and the company scaled back. In 1979, the Tengelmann Group, a West German food retailer, acquired A&P and restructured the company, selling unprofitable stores and manufacturing plants.

Despite closing all stores west of the Mississippi and selling its Canadian stores, A&P remained a major player in food retailing. It purchased other chains, such as Waldbaum’s and Pathmark. As of 2008, A&P had 447 stores, concentrated in the Northeast, and had annual sales of about $9.4 billion.

Further Reading
  • Adamy, Janet. “A&P Narrows Its Loss.” The Wall Street Journal, May 11, 2005, p. B3.
  • Walsh, William. The Rise and Decline of the Great Atlantic and Pacific Tea Company. Secaucus, N.J.: Lyle Stuart, 1986.

Beef industry

Fishing industry

Food-processing industries

Pork industry

Poultry industry

Retail trade industry

United Food and Commercial Workers

Warehouse and discount stores

Categories: History