Chain grocery retailing was a phenomenon that took off around the beginning of the twentieth century, with the Great Atlantic and Pacific Tea Company (established 1859) and other small, regional players. Grocery stores of this era tended to be small (generally less than a thousand square feet) and also focused on only one aspect of food retailing. Grocers (and most of the chains fell into this camp) sold what is known as “dry grocery items, or canned goods and other non-perishable staples. Butchers and greengrocers (produce vendors) were completely separate entities, although they tended to cluster together for convenience’s sake.
Clarence Saunders Piggly Wiggly stores, established in Memphis in 1916, are widely credited with introducing America to self-service shopping, although other stores (notably Alpha Beta in Southern California) around the country were experimenting with the idea at about the same time. Self-service stores came to be known as “groceterias” due to the fact that they were reminiscent of the cafeteria-style eateries that were gaining popularity at the time.
It was not until the 1920s that chain stores started to become a really dominant force in American food (and other) retailing. Small regional chains such as Kroger, American Stores, National Tea, and others began covering more and more territory, and A&P began moving toward a more national profile, operating over 10,000 of its “economy stores” by the end of the decade. Most of these stores remained small, counter service stores, often staffed by only two or three employees, with no meat nor produce departments. Some still offered delivery and charge accounts, although most chain stores had abandoned these practices.
In 1926, Charles Merrill, of Merrill Lynch set in motion a series of transactions that led to the creation of Safeway Stores, when he arranged the merger of Skaggs Cash Stores, a chain with operations in Northern California and the northwestern United States, with Los Angeles-based Sam Seelig Stores. In 1928, the new chain bought most of the west coast’s Piggly Wiggly stores, and later acquired Sanitary Stores in the Washington DC area as well as MacMarr Stores, another chain that Charles Merrill had assembled. Growth by merger became common in the late 1920s and 1930s, and led to numerous antitrust actions and attempts to tax the chain stores out of existence.
As early at the 1920s, some chain grocers were experimenting with consolidated (albeit still rather small) stores that featured at least a small selection of fresh meats and produce along with the dry grocery items. In Southern California, Ralphs Grocery Company was expanding into much larger stores than had been seen before in most of the country. Los Angeles was also seeing the beginning of the drive-in market phenomenon, where several complimentary food retailers (a butcher, a baker, a grocer, and a produce vendor, for example) would locate within the same small shopping center surrounding a parking lot. These centers were often perceived by customers as a single entity, despite being under separate ownership.
In 1930, Michael Cullen, a former executive of both Kroger and A&P, opened his first King Kullen store, widely cited as America\'s first supermarket, although others have some legitimate claim to that title as well. King Kullen was located in a warehouse on the fringes of New York City, and offered ample free parking and additional concessions in a bazaar-like atmosphere. Merchandise was sold out of packing cartons and little attention was paid to décor. The emphasis was on volume, with this one store projected to do the volume of up to one hundred conventional chain stores. The volume and the no frills approach resulted in considerably lower prices.
The supermarket, as it came to be known, was initially a phenomenon of independents and small, regional chains. Eventually, the large chains caught on as well, and they refined the concept, adding a level of sophistication that had been lacking from the spartan stores of the early 1930s. In the late 1930s, A&P began consolidating its thousands of small service stores into larger supermarkets, often replacing as many as five or six stores with one large, new one. By 1940, A&P\'s store count had been reduced by half, but its sales were up. Similar transformations occurred among all the majors in fact, most national chains of the time saw their store counts peak around 1935 and then decline sharply through consolidation. Most chains operated both supermarkets and some old-style stores simultaneously for the next decade or so, either under the same name (like Safeway, A&P, and Kroger) , or under different banners (such as the Big Star stores operated by the David Pender Grocery Company in the southeast).