Learn From the History of Giant Retailers

Small to midsize retailers can learn from large retailers. Discern where the large retailer seems clumsy, then grab market share by being more nimble. Assess how what is working superbly for the Big Box might be successfully scaled down.
     How about learning from the largest retailer in the world? No, I don’t mean Walmart, I mean the Great Atlantic and Pacific Tea Company. In the early 1920’s, A&P became the world’s largest retailer based on revenues. In 1950, A&P sold more goods annually than did any other business except General Motors. I’m talking about learning from the history of giant retailers. History gives perspective.
     NPR recently interviewed Marc Levinson, author of The Great A&P and the Struggle for Small Business in America. An analysis of the interview content yields tips for today’s smaller retailers when contesting for a share of the consumer’s dollar:

• Avoid battles you won’t win. For more than twenty years, small retailers fought against A&P in the courts and among legislators, saying the big chain was stifling competition. Those efforts were hugely unsuccessful, particularly when the economy did well enough for there to be sufficient business all round. These days, when small to midsize retailers complain about the intrusion of Big Box stores into their communities, consumer psychology research findings indicate the best to be hoped for is a holding action. Consumers want value, and loyalty flees promptly. Devote your limited resources to providing distinctive value.
• Select the right battles. A substantial contributor to A&P’s success was their ownership of manufacturers and suppliers. In the late 1940s and early 1950’s, legislative and public pressure caused A&P to change. The tag line mobilizing the pressure was not “buy from local shops,” but rather, “make predatory pricing illegal.”
• Avoid misplaced romanticizing. A&P succeeded because the traditional way of buying groceries was burdensome. Since each shop carried only a limited line, the consumer had to go to separate stores for canned goods, fresh vegetables, meat and fish, baked goods, and household supplies. Then at each store, the customer had to depend on the merchant to retrieve the merchandise. These days, that system might work with luxury goods. It might even work when the shopper concludes they require expert advice, such as in a butcher shop. But even here, today’s consumers by and large would prefer to avoid shopping for commodities every day or two, as was necessary before A&P.

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