The Great A&P and the Struggle for the Soul of Antitrust

Abstract

The Great A&P and the Struggle for Small Business in America by Marc Levinson chronicles the rise of A&P and other chain stores in food retailing. The struggle between chain retailers and independent grocers offers important lessons for enforcement of the antitrust laws today.

While providing a level of personal service rarely found today, the “mom-and-pop” stores that defined food retailing in the late nineteenth century were wanting in important ways. Most offered limited product selection, often carried adulterated and spoiled items, and expected customers to haggle over prices. The steady rise of chain stores like A&P was a boon to consumers as these new multistate retailers used large volume wholesale purchases and branded products to lower food prices and raise quality. Independent retailers suffered, however, as they could not match the lower prices. These small business proprietors waged a multi-decade fight that culminated in Congress passing a new antitrust law to hinder the growth of chains. Consumers, in contrast, remained politically mute, for the most part.

This history vindicates the Supreme Court’s decision in recent decades to hold that the antitrust laws are intended to protect consumers, not producers. As Levinson describes, small grocers, despite the economic onslaught of more efficient chains, still had the ability to organize themselves and advance their interests in state legislatures and Congress. Consumers, in contrast, did not due, in part, to their number and heterogeneity. Antitrust enforcers and courts are correct to fill this void and act as “trustees” for unrepresented consumers.

Contrary to the conflicting interests between small business and consumers in the history of food retailing, however, the interests of the two groups are often in harmony. Small firms can be an important source of price competition and product innovation. In many instances, protecting consumers requires protecting small businesses from the predations of dominant companies. Without adequate policing from the antitrust laws, monopolists and other dominant firms may engage in exclusionary conduct that harms consumers in both the short and long term.

Keywords: antitrust, legal history, political economy

JEL Classification: K21, P16