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MARKETING CASE STORIES

COPYRIGHT 1996 - 2008
4/6/08

A&P

A long time ago and a short time ago. In a place both near and far away the A&P was one of the largest grocery chains in the USA. They were in every small town in the USA. My grandmother would go to the A&P and after we would sit in the car for about 20 minutes and watch the people walk by. In my small town we also had an A&P and they would leave the donuts outside in boxes late at night for the next day. The A&P had their own brand of coffee. My parents would go into the A&P and have the A&P Coffee ground for them at the time of purchase. I never liked coffee but I would love the smell of the coffee being ground into red bags for the customer.

All of a sudden, A&P stores began to close and large chain store supermarkets in malls outside of town took their place. I often wondered what happened. A&P was everywhere and in every town. They had all the customers and people were happy to go and shop. Then A&P was gone from our town. I guest that the pundits will say it was mismanagement, they were not current, or the changing business practices.

Marketing Application IMBALANCED

At this time when the change to strip malls was about to happen in the USA the A&P was punished by the US Government for having private labels. A&P's private labels were deemed to be in restraint of trade and a form of monopoly. A&P could no longer sell their own A&P products and coffee to their customers. This accomplished several things for those economic interests that wanted to create and profit from new strip malls. A&P lost the very profitable private label part of their business. Now they were unable to sustain their local profitability against their mall competitors. Without this profitability A&P was rejected from the strip malls as not economically viable. A&P was then be forced to stay in small towns and go out of business.

Someday the story will be told of how a major American company was removed from competition by the actions of our government. Marketing and business is made and broken by the power of government. All the so-called marketing techniques they teach can never overcome this form of government created market power. The question I would have asked is did those that ran A&P know this and still could do nothing to bring it to the attention of their customers?

Just like A&P today General Motors and Ford are in real harm of going out of business because of government regulations. We all keep saying it is the high cost of wages and health care? Could it be that the government has been put into the position that we can no longer support the American auto business in the United States?

Two reasons come to mind, one to continue to destroy the power of unions. The destruction of unions has been a long term government policy to break the middle class and bring our workforce in line with international competition. The second reason could be to let the Chinese car market enter the USA to compensate them for our incurred debts. We had to open our auto markets to the Japanese car industry to pay back debt. We may also believe that the Chinese can compete against the Japanese better than we can.

As long as the US military can enforce that our production capabilities must remain in the USA we can take the production back from any foreign owner intact in a time of war. 10/8/07