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Somber reflections from the beach

POSTED: April 25, 2012 4:00 a.m.

Generally, my beach-reading consists of light stuff - romances, mysteries and humor.

During this two -week stay at "our beach" (Cape San Blas), I have done my share of that.

But since my own beach activity has become so limited, I also delved into a heavier non-fiction: Marc Levinson's "The Great A&P and the Struggle for Small Businesses in America."

Judging from the numerous footnotes and extensive bibliography, information for this book was meticulously researched. I had expected that it would be highly critical of the giant that the Atlantic and Pacific Company became; instead, I found it a detailed and objective narrative of the rise, long history, and eventual fall of what was the world's largest retail business. It is also an insightful analysis of the effect of the distinctly different personalities of two brothers who were responsible for its success.

Although the parent of "The Great A&P" was George Gilman and The Great American Tea Company, in business as early as the American Civil War, the real founders of the A&P with which my contemporaries were familiar were George L. and John A. Hartford, whose father was in business with Gilman.

Known as "Mr. George" and "Mr. John" to all their employees and to the business world, these two counterbalanced each other and gradually developed a system of "vertical integration," which allowed them to become the great chainstore operation that outsold their competitors.

They never released their personal control, even as they expanded, and that helped lead to the downfall.

Vertical integration is the term Levinson used to describe the ways that the Hartfords developed their own network of purchasing, producing, distributing, storing, moving, displaying, advertising and selling their merchandise (food). They could react to situations so much better than other businesses because they were so self-sufficient. They virtually eliminated middlemen and even became wholesalers to other grocers.

Of course, local stores, bakeries, meat markets, wholesalers, etc., were enraged. They could not match the low pricing and still make a profit, so more and more smaller or locally owned businesses disappeared.

As this happened and A&P continued to grow, other groups formed associations and applied pressure for governmental intervention and stricter regulations.

A&P was not "fixing prices," however - they were just growing and making their profits from high volume with low prices. And driving away competition.

Sound familiar? We hear those same arguments for and against the "big box stores" today.

Middle and low-income consumers derive the greatest benefits from low pricing, but they are also the greatest losers on the employment front.

Also, because large retailers like Walmart and Target can easily buy more cheaply on the world market, it is not only smaller retail businesses that suffer, there is also a great disparity in production/manufacturing fields that supply the merchandise, thus more unemployment.

Therefore, the same textile worker whose factory job was eliminated finds himself shopping at a discount store which may have caused his factory to close. And his family cannot afford to buy at boutiques or specialty shops operated as local businesses.

Obviously, as we have moved more and more into a series of anonymous transactions, we have lost the personal interactions of local commerce and we have probably lost individuals in our communities who might have been local civic leaders.

Even in small towns, most of us rarely know or even think about the people whose labors supply our daily needs.

Reading this book helped me to understand some of our economic plights and the political pressures that seek to relieve them. It is easier to see the several sides of the problems. I only wish it could help me, and especially others in influential positions, to develop answers to these continuing conflicts of interests.

Did it begin with the Industrial Revolution? Or even before?

Helen Taylor's column appears periodically in the Dawson Community News.

 

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