Big Box Panic

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But this idealized view of the past isn’t entirely accurate. In Land of Desire, historian William Leach describes the small town of Marion, Ohio, in 1929. In “the town where both President Warren G. Harding and socialist leader Norman Thomas grew up and where the houses all had front lawns,” writes Leach, “there were two Kresge’s, two Kroger grocery stores, three chain clothing stores, two chain shoe stores, one Woolworth’s, one Montgomery Ward, and one Penney’s.”

By 1914 the burgeoning chain system boasted 20,000 stores. An industry audit that year listed United Cigar Stores Company as the largest chain, with more than 900 shops. The Great Atlantic & Pacific Tea Company (A&P) had 800, the F.W. Woolworth Company 774.

These numbers would expand dramatically in the coming decades. By 1929 chain stores made up more than 25 percent of all retail sales. By the 1930s, almost 10 percent of chain store grocery business was transacted through a single corporation, A&P, which boasted 16,000 outlets. As the business journalist Charles Fishman, author of The Wal-Mart Effect, pointed out in Fast Company magazine, “At its peak, A&P had five times the number of stores Wal-Mart has now (although much smaller ones), and at one point, it owned 80 percent of the supermarket business.” This alarmed not just the local competition but manufacturers, too, as large chains began producing their own branded products. In a flyer circulated to independent grocers, one breakfast cereal producer warned, “Any jobber is blind who shuts his eyes to the increasing menace of the chains, a menace to your business far more than to ours.”

Of the grocery chains considered “menaces” during the 1930s, few remain in business. Today A&P maintains fewer than 500 stores. They were swiftly replaced by even bigger Goliaths, such as Kroger and Wal-Mart. In 2006, according to the research firm Retail Forward, Wal-Mart was the largest grocer in the country, with around 16 percent of all food and beverage sales.

Industry groups mustered more than pressure campaigns in their battles against the chains of the past. They also called for laws to “defend” local stores. Recent legislation attempting to hinder the expansion of big-box retailers has roots in a long history of legislation—most of it nullified—against chains.

As early as the 1920s, politicians realized that populist rhetoric directed against chain stores was a political winner. In 1928 Senator Smith Brookhart (R-Iowa) called on the Federal Trade Commission to investigate the “chain menace.” After a six-year investigation, the agency published its findings. While the commission sided against the alarmists—there were no true monopolies in retail, it determined—the report’s complaints will sound familiar to today’s Wal-Mart critic: merchandise sold beneath cost, strong-arming manufacturers, employees paid low wages.

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