Grocery’s Greatest Stories, Part 1

Sometimes, you recognize big news stories as they happen — and other times, there are more subtle occurrences that don’t stand out so much at the time, but end up changing the course of history in one way or another. While there’s no easy way (or enough space here) to recount every major headline from the past 100 years, Progressive Grocer has compiled a brief timeline of news stories that ended up having a notable impact on the supermarket industry in the years to come.

While looking back on news from the past is one way to relive history, perhaps some of the greatest stories are those that didn’t always make headlines — the story of an aspiring merchant who had a dream to operate a first-class store that would serve his neighbors, and who overcame obstacles to do so; the hard work of an otherwise unnoticed warehouse worker who put his children through college; or even a cashier who made a difference in one of her customer’s lives by offering a smile and supportive ear during a difficult time. If you have a “great grocery story” from the past century that you’d like to share, we encourage you to reach out to us on social media to tell us about it.

1916: Piggly Wiggly Introduces  Self-Service Grocery

Clarence Saunders founded America’s first self-service grocery store, Piggly Wiggly, in Memphis, Tenn., paving the way for what would eventually become the supermarket. The store was a dramatic departure from grocery stores of the day, in which customers would give their list to a clerk who would then assemble their orders. 

In an article in Time magazine published in 2016, John Stanton, a professor of food marketing at Saint Joseph’s University, noted that the opening of the first Piggly Wiggly marked “the origin of branding.” He said that the store was groundbreaking in that it allowed consumers to make decisions as to what they wanted to buy — and over time, it spurred companies to think more about advertising and branding to appeal to these shoppers.

Piggly Wiggly Corp., which Saunders established when he opened his first store, went on to issue franchises to hundreds of grocery retailers to operate their own Piggly Wiggly stores. Saunders also began issuing company stock soon after the corporation began. While the stock was successfully traded on the New York Stock Exchange for some time, through a series of trades in the early 1920s, Saunders ultimately lost control of Piggly Wiggly. His story was profiled in The New York Times in 1923 under the headline “Piggly Wiggly Saunders Fought to Bitter End.”

1930: King Kullen, America’s First Supermarket, Debuts

On Aug. 4, 1930, Michael Cullen opened the doors to America’s first supermarket, King Kullen, in a large vacant garage in Jamaica, in the New York City borough of Queens. The Smithsonian Institute recognizes this store as America’s first supermarket, since it was “the first to fulfill all five criteria that define the modern supermarket: separate departments, self-service, discount pricing, chain marketing and volume dealing.”

Cullen, who had joined A&P as a clerk in 1902, spent years dreaming of his idea for a supermarket and tried to persuade grocery executives of the concept’s potential, but his words apparently fell on deaf ears.

Once he had the chance to make his dream a reality, he promoted his store with newspaper ads and circulars that billed King Kullen as “the World’s Greatest Price Wrecker.” According to the company, curious customers drove from 100 miles away to see what the new store was all about and to save money on groceries.

Indeed, the low-price proposition was one of the biggest draws of Cullen’s store, particularly since it debuted during the Depression. By 1936, there were 17 King Kullen locations in New York City and on Long Island, and they were bringing in about $6 million a year in sales.

Unfortunately, Cullen died at the young age of 52, but his wife and children carried on the business, which continues today. In fact, just last month, King Kullen appointed Michael Cullen’s grandson, James Cullen Jr., chairman of the company. 

1940s: A&P is Target of Anti-Chain Movement

By 1930, the great Atlantic & Pacific Tea Co., better known as A&P, had become the country’s largest retailer. Even though the company was slow to embrace the supermarket concept as envisioned by Michael Cullen, it ended up adopting the self-service idea and grew its store base substantially.

Yet with this great growth came a backlash from the country’s anti-chain movement. Consequently, in the early 1940s, A&P became embroiled in an antitrust lawsuit, in which its owners, brothers John Hartford and George Hartford Jr., were sued by the United States for unfair competition against independents, exaction of allowances by headquarters, and abuse of advertising allowances, among other charges. The owners lost the case and were fined. In 1949, the U.S. attorney general filed a new lawsuit calling for the breakup of the company. In response, A&P conducted a major PR campaign to save its image (the owners were even featured on the cover of Time magazine in 1950), and its efforts finally pressured the government to end the case in 1953.

The company began to decline during the 1950s as it failed to keep up with competitors that were building larger supermarkets with more modern features, but its strong fight helped promote the principle that there’s room for both big chains and independent grocers in the U.S. retailing landscape.

1951: Albertsons Opens Superstore Featuring Drugs

At 60,000 square feet, Albertsons’ new “superstore” of 1951 was the first of a few experimental combination food-and-drug stores to be built during the decade. This was during a period that founder Joe Albertson was beginning to expand operations beyond the company’s home state of Idaho. In 1957, the company purchased Sugarhouse Drug, in Salt Lake City, making a further investment in the idea that food and drugs together offer more convenience for shoppers.

By the following decade, more supermarket operators were catching on to the concept of combination stores. In 1961, Jewel Tea acquired Osco Drug, and in 1962, Giant Food of Landover, Md., built its first combination food store and pharmacy. Later in the 1960s, Acme Markets of Philadelphia acquired a 46-store Pennsylvania drug store chain, and Albertsons entered into a partnership with Skaggs Drug Centers Inc. to open more combination food-and-drug stores.

1961: First National Purchases Safeway’s N.Y. Division in Largest Acquisition to Date

Making history as the industry’s largest single acquisition to date, northeastern chain First National Stores acquired the New York division of Safeway Stores Inc., which included 164 stores. At the time, Safeway was the second-largest grocery store chain in the nation, so the deal catapulted First National to eighth place in the national ranking of grocery chains. Of course, this was the first of many big acquisitions to come later in the century.

First National, which later used the acronym “Finast,” was purchased by Pick-N-Pay Supermarkets of Ohio in 1978, and was later acquired by Ahold in 1998.

1964: Federal Food Stamp Act is Passed

On Aug. 31, 1964, President Lyndon B. Johnson signed the Food Stamp Program into law after a two-year pilot program proved successful (the country’s first Food Stamp program was introduced in 1939, but ended in 1943, when the economy and employment opportunities improved.) It became the most significant food plan in the United States, providing needy individuals with food stamps that could be exchanged like money at authorized stores.

Today, the grocery industry continues to play a critical role in providing products for consumers in need, and also serves shoppers through the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), which became permanent in 1974.

1966: Housewives Boycott Supermarkets to Protest High Prices

As inflation was driving up costs and ultimately consumer prices in the mid-1960s, housewives across the country participated in a boycott of supermarkets. The movement was centered in Denver, where women belonging to “Housewives for Lower Food Prices” pledged to boycott five major supermarket chains: Safeway, Red Owl, Miller’s, Furr’s and Kings. Yet, to grocers’ dismay, the boycott spread across the country to New York, Florida, Arizona, California and New Mexico.

During the annual meeting of the American Bakers Association, Michael J. O’Connor, executive director of the Supermarket Institute, urged the women to “listen to logic,” in the form of the balance sheets of supermarket operators. O’Connor noted that the impact of inflation was also being felt by retailers and producers. He also pointed out that wages of food industry workers were increasing at a faster rate than prices, amid a labor shortage, food shortage and money shortage that retailers were having to contend with.

1974: Industry Evolves With First Barcode Scan

The supermarket industry entered a new era of efficiencies on June 26, 1974, when the first-ever barcoded item — a pack of Wrigley gum — was scanned at a Marsh Supermarket in Troy, Ohio. The store happened to be located near NCR’s scan study and development facility, so Marsh got to work closely with NCR, Hobart Corp. and Spectra Physics to bring the idea to fruition. Barcodes had actually been invented decades earlier, in the 1940s, but there was no technology available to read the codes at that time.

In a press release commemorating the 40th anniversary of the first scan, Claude Fenstermaker, who was a co-manager at the Troy store in 1974, recalled: “We had visitors from everywhere around who came to see the technology and learn the steps we took to get the project finished. We also had to deal with customers’ concern that the prices were not visible on the products. We ended up printing labels and adding them to the products to ease their minds.”

The new technology significantly improved the customer experience by speeding up checkout time, keeping shelves better stocked and ensuring more competitive pricing, thanks to the efficiencies gained all the way from the warehouse to the store shelf.

1977: Ahold Begins its U.S. Venture with Bi-Lo Acquisition

Dutch retailer Ahold made a big splash in the U.S. market when it acquired Bi-Lo Stores, a regional chain in the Southeast. The company went on to grow its footprint in subsequent years by acquiring Giant Food Stores, a 29-store chain in Carlisle, Pa., in 1981; Quincy, Mass.-based Stop & Shop in 1995; and Landover, Md.-based Giant Food of Landover, Md. in 1998. It later acquired Skokie, Ill.-based online grocery service Peapod in 2001.

In an article published in The Washington Post in 2000, the newspaper speculated that Ahold was planning for “world domination.” At a time when the world seemed to be growing smaller, thanks to an expansion in global trade, perhaps this observation wasn’t too far off the mark. But Ahold executives did make one thing clear from the beginning: They wanted each regional U.S. brand to retain its local flavor and name. They continue to champion that idea in the present day, even after merging with Belgian grocer Delhaize, which operated numerous U.S. banners, in 2016.

1982: Tylenol Poisoning Leads to Packaging Changes

Panic took over the nation in 1982, when a 12-year-old girl in a suburb of Chicago died from ingesting an extra-strength Tylenol capsule laced with highly poisonous potassium cyanide. Her death was followed by six others also linked to Tylenol capsules that had been tampered with.

After investigators made the discovery, McNeil Consumer Products, the manufacturer of Tylenol, proactively issued mass warning communications and immediately called for a recall of the more than 31 million bottles in circulation. The case prompted the FDA to require tamper-proof packaging for over-the-counter drugs, vitamins and supplements. 

Editor’s Note: Click here for part 2 of “Grocery’s Greatest Stories.”