America 1919-Chapter 715 - : 246, Bloated mega corporation
Chapter 715: 246, Bloated mega corporation
“The biggest discount in the history of American retail, zero cost purchase!”
On the opening day of the Apollo Chain, enormous posters stood in front of all 2,000 Apollo Chain stores across the United States, and not only that, ABC, owned by Starry Media, “Atlantic City Post” as well as major newspapers nationwide had their ad slots bought by Apollo Chain.
Just in one morning, cities across the country with an Apollo store knew about Apollo Chain’s sales plan.
New York, where the A&P headquarters were located, on one side of Fifth Avenue, sat John Hartford, president of A&P, in his blue Rolls-Royce, his gaze somewhat profound.
The focus of John Hartford’s gaze was not the A&P store, but the Apollo Chain store next to A&P!
...
At this moment, the situations at the entrances of the A&P store and the Apollo Chain store were completely opposite.
In front of the Apollo Chain store, there was already a long line, and most of the people in line were holding a copy of the “Atlantic City Post.” These people occasionally craned their necks to look towards the entrance of the Apollo Chain store, waiting for it to open!
In contrast, at the A&P store next to the Apollo Chain store, a sudden breeze stirred up the leaves at the entrance; there was no one there.
Updat𝓮d fr𝙤m ƒгeeweɓn૦vel.com.
John Hartford rubbed his temples; at this moment, he truly felt a headache coming on.
“Let’s go, back to the office!”
The headquarters of A&P were located in an office building in the Upper Manhattan area of New York. When John Hartford arrived at the conference room, A&P’s executives were already seated, waiting for him.
“All right, enough small talk. Now, tell me, have you all come up with any ideas on how to counter Apollo Chain’s offensive?”
A&P began growing under John Hartford’s father, George Hartford. Before George Hartford took over A&P, it was just an imported tea shop. After George Hartford took charge of A&P, it officially embarked on the path of franchising and entering the 20th century, when A&P’s store count had risen to 198, and the number of employees had surpassed 1,800.
But A&P’s real growth occurred under John Hartford’s management.
After taking over A&P, John Hartford proposed a new sales model, the “Economy Store Model” of “cash transactions and customer pick-up,” which he started to trial in 1912. To reduce operational costs, the company adopted standardized operations, simplifying the operational process to the greatest extent.
1. Implement cash transactions and customer pick-up only, no credit terms, no delivery service.
2. Do not use telephone services.
3. Standardize stores to 600 square feet self-service stores, staffed only with one manager and one assistant.
4. Minimize product variety to 300 types, with regular sales checks.
Based on this model, products could be marked down by 10%, and due to the smaller variety and higher sales volume, product turnover also significantly increased. Moreover, due to the simplified and standardized store operations, the company reduced its reliance on skilled workers, thereby indirectly reducing labor costs and facilitating the opening of new stores.
Subsequently, A&P invested all its capital into this new economical store format and by this year, their store count reached 7,350.
A&P’s turnover even surpassed 14% of the total sales of America’s food industry, making it an unrivaled giant in the food sector at the time.
Even if the sales of the companies ranked second to eighth were combined, they could not compete.
It was these achievements that solidified John Hartford’s lofty position in A&P, making it almost impossible for anyone to challenge his authority.
One might say John Hartford was the king of American retail.
However, he never anticipated that just as he focused on competitors like Sears Roebuck and F. W., Apollo Chain suddenly emerged, and from their location choices, business strategies, and products, it was clear they saw A&P as their hypothetical enemy.
In the beginning, John Hartford didn’t take this matter too seriously, after all, they had been the leading power in the U.S. retail industry for too long.
A newly emerged retail store shouldn’t possibly be their match!
But to their surprise, on the opening day of Apollo Chain, the competitor pulled out a trump card, proving to be a tough challenge for them!
“Sir, there are no secrets in the retail war. If the opponent uses discounts to promote sales, the only way for us to compete is to follow their rhythm and offer discounts as well. Only then will consumers enter our stores!”
One of A&P’s executives expressed his opinion!
“It’s not that simple. Apollo Chain is backed by Donnie Block. I’ve had people investigate. To support Apollo Chain’s business, Donnie Block directed his United States Logistics to cooperate fully.”
United States Logistics owns the most storage centers in the US and has the largest truck fleet. It’s a logistics company with routes all over the country. Just with this alone, Apollo Chain can compete with us on cost!”
Other executives from A&P also expressed more pessimistic views.
For a national chain company, warehousing and logistics are a significant expense. No other retail company before Donnie had created their own storage centers!
It’s not that these retail companies didn’t want to establish their own storage centers; the main issue is that doing so would significantly increase costs, and when the cost doesn’t justify the benefit, these companies naturally wouldn’t take such actions.
