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Speaker 1: Pushkin too quick. No, it's perfect push kid stuff. You

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Speaker 1: got it.

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Speaker 2: Robert Smith, I'm going to tell you the key moment

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Speaker 2: in today's show. The federal government charges the people running

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Speaker 2: the biggest grocery store chain in America with criminal conspiracy.

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Speaker 2: Their alleged crime selling food too cheap. I'm Jacob Goldstein

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Speaker 2: and I'm Robert Smith. And this is Business History, a

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Speaker 2: show about the history of business. Today's show is about

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Speaker 2: the A and P, biggest grocery store in America in

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Speaker 2: the first part of the twentieth century. My grandmother shopped

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Speaker 2: at the NP on Flatbush Avenue.

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Speaker 3: I saw them in the seventies and eighties, and you know,

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Speaker 3: the AMP really helped invent the modern grocery store, figured

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Speaker 3: out how to sell food at low prices.

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Speaker 2: You see their moves today in Walmart, in Costco, on Amazon.

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Speaker 2: But in the eyes of some people, the AMP became

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Speaker 2: a monster when Congressman wrote a law, a bill that

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Speaker 2: actually called them the evil all caps. Can't believe they

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Speaker 2: got through the lawyers. And underneath all this there was

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Speaker 2: this big interesting question or set of questions, you know,

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Speaker 2: like what is fair competition, what is unfair competition? And

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Speaker 2: crucially when should the government step in to protect small

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Speaker 2: business from big business. And this is a fight, as

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Speaker 2: we'll talk about, that is entirely alive to this day.

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Speaker 2: In eighteen eighty, George Hartford went to work as a

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Speaker 2: cashier at the Great Atlantic and Pacific Tea Company in Newark,

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Speaker 2: New Jersey, selling dar jealing and English breakfast. I imagine

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Speaker 2: any ta you want, but I don't know. George Hartford

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Speaker 2: was fourteen years old at the time. He had quit school.

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Speaker 2: But I do not want you to get the idea

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Speaker 2: that does some rags to riches story, because Hartford's dad

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Speaker 2: ran the company, so it's actually a riches to vastly

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Speaker 2: more riches story. George Hartford's younger brother, John would go

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Speaker 2: into the business a few years later, and they grew

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Speaker 2: up and run the company, the A and P as

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Speaker 2: it became known, And they were this like perfect odd couple.

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Speaker 2: George was quiet and reserved and wore a black suit

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Speaker 2: every day, lived in the same house in New Jersey

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Speaker 2: for fifty years, very cautious at work, basically ran the

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Speaker 2: company's finances. John was much more social, wore tailored suits

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Speaker 2: bow ties.

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Speaker 3: I love a howt bow tie is like a symbol

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Speaker 3: of a certain type. Back then everyone wore them. But yes, yeah,

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Speaker 3: he's the bow tie g.

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Speaker 2: When was the last time you could wear a bow

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Speaker 2: tie and it wasn't like, oh, you're the bow tie

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Speaker 2: guy nineteen ten. Yeah, I don't know. I don't know.

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Speaker 2: John had a suite at the Plaza Hotel and a

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Speaker 2: mansion in Westchester with a nine hole golf course. He

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Speaker 2: was married three times, twice to the same woman. And

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Speaker 2: he was much more kind of creative with the business,

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Speaker 2: trying to find new ways for it to grow. I

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Speaker 2: love that he's this flamboyant tea guy. Ye, yeah, very

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Speaker 2: very kind of the tea wild man. And I should

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Speaker 2: say these details about the brothers and a lot of

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Speaker 2: the details in the show today come from this book,

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Speaker 2: The Great A and P and the Struggle for Small

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Speaker 2: Business in America. It's by Mark Levinson and it's a

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Speaker 2: great book.

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Speaker 3: And he wrote one of our favorite books called The

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Speaker 3: Box about the shipping.

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Speaker 2: Container, also an amazing story that we should definitely do

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Speaker 2: on the show. So John and George Hartford they get

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Speaker 2: into the family business in the late eighteen hundreds, and

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Speaker 2: at that time the company has about one hundred and

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Speaker 2: fifty stores on the East Coast and in the Midwest,

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Speaker 2: and they're doing well, but they're fundamentally in this commodity business.

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Speaker 2: Right they're selling coffee, tea, and sugar essentially. And that's a.

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Speaker 3: Problem in any business because if you have a commodity,

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Speaker 3: it means that every store is stocking the same thing.

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Speaker 3: If you're selling flour and the guy next to you

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Speaker 3: is selling flour, the only way you can compet eat

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Speaker 3: is on price. You lower your price, they lower their price.

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Speaker 3: Next thing, you know, you're both selling.

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Speaker 2: It for cost. Yes, a consumer's dream, yes in many ways,

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Speaker 2: but bad for business. And so there is this classic

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Speaker 2: problem they're trying to solve, which is how do you

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Speaker 2: differentiate yourself so that you can charge more and make

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Speaker 2: a profit. And they're one of the first people to

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Speaker 2: come up with an answer to this problem. Yes, yes,

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Speaker 2: a particular kind of answer, and that is build a brand.

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Speaker 2: And they find this brand in particular around the hot

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Speaker 2: new kitchen product of the late eighteen hundreds, new technology

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Speaker 2: baking powder.

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Speaker 3: Now, I should say, if you want your baked products

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Speaker 3: to rise, your cakes, right and your cookies, you used

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Speaker 3: to use baking soda and used to add an acid

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Speaker 3: to it. It was a chemical reaction that created bubbles.

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Speaker 2: Very good. Remember this from elementary school.

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Speaker 3: Wow, I know baking powder incorporated the acid inside so

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Speaker 3: that you could just add water and heat and it

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Speaker 3: would slowly allow your.

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Speaker 2: Baked You up already. I love baking, bacon chemistry. What's

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Speaker 2: your go to.

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Speaker 3: My go to thing to bake? Oh, sitting and watching

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Speaker 3: the Greg British Bakeoff.

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Speaker 2: That's so so. Baking powder is this hot new thing

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Speaker 2: in the eighteen hundreds. But food in general was entirely

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Speaker 2: unregulated at this point in history. Right, The FDA hadn't

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Speaker 2: come along yet. Maybe someday we'll do a story about,

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Speaker 2: you know, meatpacking in the jungle and the rise of

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Speaker 2: the FDA. But there's no laws regulating what goes into food.

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Speaker 2: And in many foods, including baking powder, it was wildly

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Speaker 2: common to adulterate them.

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Speaker 3: Right.

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Speaker 2: Milk often had four maldehide in it, like poisonous, poisonous

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Speaker 2: YEA coffee would often have lead and like ground bones. Yeah, crazy, right,

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Speaker 2: And and it was very common for baking powder to

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Speaker 2: just be like bulked out with starch. Right. It's like

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Speaker 2: it's like back in the nineties when you'd go to

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Speaker 2: Washington Square Park to buy weed and it would be

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Speaker 2: a regular and then there's some dumb kid from California.

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Speaker 2: There was no brand. There was no brand at that point.

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Speaker 2: And you know, if you zoom out historically right late

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Speaker 2: eighteen hundreds, you have urbanization. You have people moving away

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Speaker 2: from the farm, from the food they've grown themselves, and

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Speaker 2: all of this adulteration, even poison in the food. And

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Speaker 2: so this is an opportunity for a place where a

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Speaker 2: brand can be really useful. Right if your brand is

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Speaker 2: not just marketing, is not fake, but is in fact

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Speaker 2: reliably what it says, it is in a universe where

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Speaker 2: everybody else's is not, That is real value. And so

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Speaker 2: this is why in the like last third of the

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Speaker 2: eighteen hundreds you get the rise of a lot of

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Speaker 2: modern food brands. You get Heinz ketchup, you get Pillsbury Flour,

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Speaker 2: you get Coca Cola, Post Cereal. You know, it's helping

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Speaker 2: people who have moved to the cities know that what

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Speaker 2: they're getting is real.

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Speaker 3: And the start of advertising. So when you think about it,

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Speaker 3: you're like, oh, I want that the heinz ketchup.

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Speaker 2: Right right, people are starting to read newspapers there's cheap

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Speaker 2: newspapers where you can advertise it. And so George Hartford

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Speaker 2: sees this happening and he decides to get in on it.

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Speaker 2: And in eighteen eighty five the Great Atlantic and Pacific

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Speaker 2: Tea Company start selling baking powder that is not just

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Speaker 2: white powder scooped out of a big wooden barrel. It

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Speaker 2: could be anything in there. Yeah, it comes out of

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Speaker 2: a tin and the tin like has this red label

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Speaker 2: and in big letters it says am P and on

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Speaker 2: the top of the tin. I looked this up.

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Speaker 3: It looks like an American penny and it says perfectly pure.

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Speaker 2: And I think it actually was. They had this little

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Speaker 2: card that I guess would like sit next to it

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Speaker 2: on the shelf or something, and it was an endorsement

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Speaker 2: of Professor r Ogden Durimus. Is that a real person

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Speaker 2: shout out in nineteenth century name of Bellevue Hospital Medical

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Speaker 2: College quote, I find on chemical analysis that your baking

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Speaker 2: powder is composed of pure materials.

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Speaker 3: Sure, whatever that means. But great advertising. This was like

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Speaker 3: it told people that you can trust this brand, and

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Speaker 3: in fact, if it made your cakes great, you would

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Speaker 3: go back and buy it again us even if.

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Speaker 2: It cost a little more crucially, right, you're paying for

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Speaker 2: that reliability. Now. You know, I've been talking about the

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Speaker 2: rise of brands in general, but I want to point

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Speaker 2: out here that it's not just a brand.

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Speaker 1: Right.

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Speaker 2: If you're a grocery store and you're buying Pillsbury flour

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Speaker 2: or Heinz ketchup, you are paying that premium in the

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Speaker 2: wholesale price to Pillsbury or two Hinds. Right. What George

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Speaker 2: is doing here is something different. Right. They run retail stores.

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Speaker 2: The amp and the brand is their own. This is

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Speaker 2: A and P brand baking powder. So what that means

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Speaker 2: is they can charge more for it, and they get

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Speaker 2: to capture the premium, the extra price because they're running

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Speaker 2: the factories, they're running the packaging, they're running the transportation.

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Speaker 3: All those areas where you lose a little bit of

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Speaker 3: margin they're keeping for themselves brilliant.

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Speaker 2: Or even if they're not right, even if they're just

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Speaker 2: contracting with manufacturers and making sure that it's legit, then

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Speaker 2: they're paying that generic price to those manufacturers and capturing

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Speaker 2: the markup of the brand value. And I make that

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Speaker 2: distinction because today, basically every big retailer has learned this lesson, Right, Costco,

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Speaker 2: Kirkland Whole Foods three sixty five key foods are local.

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Speaker 2: New York grocery store has urban meadow. What is an

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Speaker 2: urban meadow? It's like Central Park sounds disgusting to me.

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Speaker 2: It's like, why do I just call it like rats garden?

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Speaker 3: I do buy it. I do buy it because it's

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Speaker 3: slightly cheaper. And if you're buying cannabeans, like.

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Speaker 2: It's a cannobis, it's gonna be fine. You don't need

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Speaker 2: a goya. I do not. I like I do. It

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Speaker 2: is a great product. Yeah, see like we're doing that. Yeah,

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Speaker 2: we're doing that. So so George Hardford has I think invented

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Speaker 2: the store brand. And I should say anp had sold

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Speaker 2: branded coffee before this, but the baking powder is a

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Speaker 2: real differentiation, and it's doing a second thing right. It's

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Speaker 2: allowing them to move beyond just a coffee and tea

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Speaker 2: shop into kind of the broader grocery business. So they

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Speaker 2: start growing, they're adding stores, and in nineteen oh seven

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Speaker 2: they decide they're going to build this big new headquarters

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Speaker 2: and it's going to have a power plant, a bakery,

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Speaker 2: a big coffee roasting plant. To your point, they are

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Speaker 2: doing this vertical integration right to capture more of the

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Speaker 2: value right, the value chain. So it's nineteen oh seven.

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Speaker 2: They're spending all this money. What happens in the history

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Speaker 2: of business in nineteen oh seven, Robert Smith.

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Speaker 3: Everything comes to a halt with the Panic of nineteen

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Speaker 3: oh seven.

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Speaker 2: There was a run on the banks.

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Speaker 3: Literally people thought that the banks were going under, and

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Speaker 3: so in nineteen oh seven, crowds of people flocked their

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Speaker 3: bank to try to get their money back.

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Speaker 2: This was a huge crisis in American economic yes, and

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Speaker 2: a time when there was no deposit insurance. So truly,

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Speaker 2: if your money was in the bank and it went

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Speaker 2: out of business, you might not get your money back.

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Speaker 3: Yes, you need to get there first the moment you

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Speaker 3: hear the rumor and hence the panic.

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Speaker 2: So John Hartford, one of the Hartford brothers, he's in

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Speaker 2: his mid thirties by this point in nineteen oh seven,

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Speaker 2: and he is the one who goes to the bank

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Speaker 2: to get the company's money out because he's living at

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Speaker 2: the plaza.

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Speaker 3: He goes downtown, yeah, and.

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Speaker 2: He waits at the bank overnight so that he can

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Speaker 2: go in when it opens. But he's in the middle

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Speaker 2: of the line lots of people have gotten there even

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Speaker 2: before him, and so he's worried that the bank's going

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Speaker 2: to run out of money before he gets to the

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Speaker 2: front of the line. So he goes up to the

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Speaker 2: guy in front of the line and says to him,

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Speaker 2: how much money you got in the bank, And the

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Speaker 2: guy says four hundred and forty seven dollars and John says,

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Speaker 2: I'll tell you what. I'll give you four point fifty

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Speaker 2: and you give me your spot in line, and the

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Speaker 2: guy takes the deal. I don't know what everybody else

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Speaker 2: in line thought, but started a bidding war. But John

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Speaker 2: was smart. Yeah, it was smart, and he had he had,

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Speaker 2: you know'spah moxy, all the Yiddish things, and so it worked.

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Speaker 2: He gets the company's money out of the bank, saves

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Speaker 2: the company, and you know, this is how they survived

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Speaker 2: the Panic of nineteen oh seven, which a lot of

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Speaker 2: companies did not. So John and George they're running the company.

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Speaker 2: They're leaning into this store brand selling ANP Lima beans

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Speaker 2: and ANP stove polish.

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Speaker 3: Not that there was probably a problem with stove polish,

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Speaker 3: but at this point, the ANP brand means something, and

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Speaker 3: it means it.

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Speaker 2: Across all sorts of products. Yeah, and maybe it just

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Speaker 2: has that halo, right, maybe it's just getting that brand halo.

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Speaker 2: But the stores themselves have not changed that much. Right,

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Speaker 2: And let's talk for a sec about what grocery stores

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Speaker 2: are like at this money, because it's nothing like what.

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Speaker 3: You think of today when you think of groceries store.

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Speaker 3: The early grocery stores were a high touch business. As

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Speaker 3: we would say, you would walk in, you would say

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Speaker 3: hello to the person behind the counter, and you would

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Speaker 3: go down your list and they would one by one

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Speaker 3: they oh, I need three cups of flour, and they

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Speaker 3: would toddle over, measure them out, give them to you,

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Speaker 3: pull things off the shelves.

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Speaker 2: Right, This is just the way it worked. There was

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Speaker 2: a guy and he got all the stuff for you,

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Speaker 2: or a lady or a kid, and they would give

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Speaker 2: you credit till payday, and the kid would ride his

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Speaker 2: bike and deliver the stuff to your house. And there

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Speaker 2: is a certain charm to it, sure, but that charm

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Speaker 2: is wildly inefficient, wildly costly, right, And this is part

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Speaker 2: of the reason groceries were so expensive. Right. You have

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Speaker 2: to pay for the guy getting the stuff. You have

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Speaker 2: to pay for all the people who don't pay off

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Speaker 2: their credit at the end of the week, right, that

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Speaker 2: has to be baked in the price you have to

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Speaker 2: pay for the delivery guy to ride it to your house. Also,

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Speaker 2: of course, farming was super inefficient and there were all

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Speaker 2: these middle men in the system, so.

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Speaker 3: Sure, tiny farms expensive.

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Speaker 2: So the typical family at the time spent something like

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Speaker 2: forty percent of their budget of all of their money

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Speaker 2: on food, compared with like ten percent today. Just extraordinary.

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Speaker 3: Do allow that for a moment, because people complain about

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Speaker 3: the price of eggs, and sure it went up, it's

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Speaker 3: come down, or now it's beef. I guess it is

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Speaker 3: easy to complain about that. But think about forty percent

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Speaker 3: of your paycheck going toward the grocery store bill, like

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Speaker 3: it was along with clothing. It took up this the

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Speaker 3: majority of your budget.

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Speaker 2: Yeah, forty percent was just for the the typical family,

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Speaker 2: and for a lot of people it was more than that.

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Speaker 2: And for a lot of people there just wasn't enough

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Speaker 2: to eat. One striking fact that reveals this in a

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Speaker 2: kind of brutal way is that around this time, rich

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Speaker 2: people were something like an inch taller on average than

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Speaker 2: everybody else. Because rich people were not malnourished as children

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Speaker 2: and many others were. People were stunted because food was

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Speaker 2: so expensive. So this is this is the state of

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Speaker 2: play around the turn of the twentieth century and John

288
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Speaker 2: Hartford are thinking about how to make groceries cheaper, how

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Speaker 2: to make food cheaper, and almost in secret, they open

290
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Speaker 2: this little test store in Jersey City, New Jersey, right

291
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Speaker 2: across the river from Manhattan. And it's really little. It's

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Speaker 2: like twenty feet by thirty feet, which is the size

293
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Speaker 2: of you know, a bodega, a gas station, convenience store,

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Speaker 2: something like that. And there's fewer items than in a

295
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Speaker 2: typical anp store. They don't do any advertising, they don't

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Speaker 2: sell on credit, they don't do delivery. They don't even

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Speaker 2: have a phone, so people can't call and ask for delivery.

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Speaker 2: There's limited hours, and so all that charm you were

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Speaker 2: talking about is gone. But you know what that means.

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Speaker 2: Their costs are much lower. It's much cheaper to run

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Speaker 2: this store, which means they can lower the prices of

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Speaker 2: their goods and still be profitable.

303
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Speaker 3: Yeah, but who would go to Jersey City and out

304
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Speaker 3: of your way to shop at a store that is

305
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Speaker 3: bare bones.

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Speaker 2: Just for lower prices? Everybody. Everybody loved it. Everybody loves

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Speaker 2: cheap groceries then as now.

308
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Speaker 3: And the interesting thing that they hit upon is and

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Speaker 3: we see this today, like Leedle writer Aldi, people love

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Speaker 3: to walk in and see cardboard boxes and no advertising.

311
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Speaker 3: It feels bare bones. It feels like you're working for

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Speaker 3: your discount. Yeah, like the cheapness is a selling point.

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Speaker 3: You think it's bad that it looks cheap, but it's

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Speaker 3: actually good.

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Speaker 2: They intentionally distress the place. I don't know if they

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Speaker 2: went that far at the AMP, but this cheap limited

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Speaker 2: service model did work right, and it does look more

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Speaker 2: like what turns into the modern grocery store. Not in

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Speaker 2: every way, but it's cheaper stuff, less service. So they

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Speaker 2: go all in, building hundreds of stores on this cheap

321
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Speaker 2: store model around the Northeast, and by nineteen twenty there

322
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Speaker 2: are more than four thousand AMP stores and the company

323
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Speaker 2: is the biggest retailer in the world. Happy ending to

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Speaker 2: the story, right, You know what happens if you're the

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Speaker 2: biggest retailer in the world at any point in history.

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Speaker 2: As far as I can tell.

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Speaker 3: There's a lot of small businesses that hate you and

328
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Speaker 3: want to bring you down.

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Speaker 4: That is still to come on the show.

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Speaker 2: All right, we're back. Maybe there was an address now,

331
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Speaker 2: or maybe there wasn't. It's the early nineteen twenties and

332
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Speaker 2: the A and P is opening seven news stores every day.

333
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Speaker 2: They're stack in days, studdying. They're vertically integrating. They're building

334
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Speaker 2: bakeries around the country, leasing salmon canneries in Alaska, selling

335
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Speaker 2: so many store brands that they buy can factory to

336
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Speaker 2: put all the stuff in the cans that say A

337
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Speaker 2: and P on them.

338
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Speaker 3: We're definitely going to talk about cans. And they're also

339
00:18:18,200 --> 00:18:21,520
Speaker 3: doing this faster than anyone's ever done it before, because

340
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Speaker 3: the key to the grocery store business is turnover, getting

341
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Speaker 3: the stuff in, selling it out, bringing it back in.

342
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Speaker 2: Yes, well, that helps them reduce costs, right, It takes

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Speaker 2: like four months for most stores to get from you

344
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Speaker 2: know whatever farm to customer. They're doing it in like

345
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Speaker 2: five weeks. So they're driving costs down and down. But

346
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Speaker 2: with all this growth, they are actually kind of overdoing it.

347
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Speaker 2: What they find is that investing all this money in

348
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Speaker 2: you know, bakeries and canaries and new stores isn't increasing

349
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Speaker 2: their margins very much, right, They're getting less efficient. They're

350
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Speaker 2: slowing down a little stuff. The stuff is sitting in

351
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Speaker 2: warehouses longer. And so the hard Ford Brothers decide to

352
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Speaker 2: make an important change, really a change in the way

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Speaker 2: they think about the business. What they want to do

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Speaker 2: is not maximize the number of stores they have, but

355
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Speaker 2: the number of stuff they can sell from the stores

356
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Speaker 2: that already exist. So, if you want to sell more stuff,

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Speaker 2: do you want to increase demand? If you will, what

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Speaker 2: do you do.

359
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Speaker 3: I've got this, I've got this, the professor knows this.

360
00:19:21,280 --> 00:19:25,800
Speaker 3: You lower prices, guaranteed. Low prices, demand curve slopes down.

361
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Speaker 2: They're a grocery store, and grocery store profit margins are

362
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Speaker 2: famously low because even if you put A and P

363
00:19:31,520 --> 00:19:34,199
Speaker 2: on your baking powder, you're still selling baking powder like

364
00:19:34,240 --> 00:19:37,320
Speaker 2: everybody else. They have to figure out how to cut costs, right,

365
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Speaker 2: they're not going to raise prices, and already the stores

366
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Speaker 2: are pretty bare bones.

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Speaker 3: They can save a little bit on their bakeries and

368
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Speaker 3: shipping and all of that, or turn over the merchandise faster.

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Speaker 2: They need to look elsewhere to cut those costs. Yeah,

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Speaker 2: so they go to their suppliers, right, they go to say,

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Speaker 2: the National Biscuit Company, nobiscuit a Nobisco love that and say, yeah,

372
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Speaker 2: we love your oreos, but we'll only buy them if

373
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Speaker 2: you give us a bulk discount. Oh and also, you know,

374
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Speaker 2: we advertise the oreos in our circulars in the newspaper

375
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Speaker 2: every week or whatever, and we'd like you to kick

376
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Speaker 2: in for that because we're advertising oreos. And if you

377
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Speaker 2: don't like it, then we'll just go to the Hydrox

378
00:20:16,560 --> 00:20:20,040
Speaker 2: people because they would love to sell us their sandwich

379
00:20:20,119 --> 00:20:25,840
Speaker 2: cream cookies, the kosher oreo. What's not to love? And

380
00:20:25,920 --> 00:20:29,160
Speaker 2: this works, right, This tough line works. They have scale,

381
00:20:29,240 --> 00:20:33,399
Speaker 2: they have leverage, and they are driving their costs down.

382
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Speaker 2: They decide that they are also going to make sure

383
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Speaker 2: that their profit margins stay low, which is weird, right,

384
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Speaker 2: lots of businesses they're like key goals year to years,

385
00:20:45,960 --> 00:20:48,720
Speaker 2: like can we drive our margins higher? Not the ANP

386
00:20:48,960 --> 00:20:52,280
Speaker 2: They're just like cheap, cheap, cheap, even for ourselves. Right.

387
00:20:52,920 --> 00:20:55,679
Speaker 2: Their profit had been around three percent of sales, so

388
00:20:55,800 --> 00:20:58,200
Speaker 2: for every a dollar of stuff they sell, they get

389
00:20:58,359 --> 00:21:00,440
Speaker 2: three percent profit. You know at the end of the day.

390
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Speaker 2: Now John and George decide we're going to bring that down.

391
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Speaker 2: We're going to make sure our profit is never more

392
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Speaker 2: than two point five percent of sales.

393
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Speaker 3: Which is so so small. But their idea is if

394
00:21:13,240 --> 00:21:16,199
Speaker 3: you can sell three times as much by lowering your

395
00:21:16,240 --> 00:21:18,520
Speaker 3: profit margin, you come out ahead in the end. And

396
00:21:18,600 --> 00:21:21,439
Speaker 3: we see this today, especially all this dealing with the

397
00:21:21,720 --> 00:21:23,960
Speaker 3: manufacturers and the low profit margin. We see this day

398
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Speaker 3: in something like Walmart, which if you look at their

399
00:21:26,400 --> 00:21:32,080
Speaker 3: net profit makes two percent three percent ish, yeah, you know,

400
00:21:32,280 --> 00:21:35,240
Speaker 3: every quarter. But they have so much volume. They're making

401
00:21:35,280 --> 00:21:36,359
Speaker 3: billions and billions of dollars.

402
00:21:36,520 --> 00:21:40,400
Speaker 2: Yeah, lower margin on higher revenue means more money if

403
00:21:40,400 --> 00:21:42,800
Speaker 2: the revenue is higher enough. Yeah. And Walmart, I mean

404
00:21:42,840 --> 00:21:44,760
Speaker 2: you mentioned Walmart having a very low margin. They are

405
00:21:44,800 --> 00:21:50,240
Speaker 2: also famous, famous, famous for pushing suppliers so hard to

406
00:21:50,320 --> 00:21:53,159
Speaker 2: lower prices. Right, So the formula is a winner, so

407
00:21:53,200 --> 00:21:55,119
Speaker 2: winner for Costco and for Walmart, and it was a

408
00:21:55,200 --> 00:21:59,399
Speaker 2: huge winner for the ANP. They cut their prices between

409
00:21:59,480 --> 00:22:02,560
Speaker 2: nineteen twenty five and twenty nine by about ten percent,

410
00:22:03,720 --> 00:22:06,840
Speaker 2: and that ten percent discount and prices led sales to

411
00:22:06,960 --> 00:22:09,880
Speaker 2: more than double amazing, So the AMP is huge.

412
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Speaker 1: Right.

413
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Speaker 2: They're the first retailer to hit a billion dollars in

414
00:22:12,400 --> 00:22:15,720
Speaker 2: annual revenue, but they're not dominant. The grocery store business

415
00:22:15,760 --> 00:22:19,600
Speaker 2: again then, as now is fragmented. Even in parts of

416
00:22:19,640 --> 00:22:21,919
Speaker 2: the Northeast where they're big, their market share is like

417
00:22:22,119 --> 00:22:25,440
Speaker 2: twenty percent, right, So they're not a monopolist. They don't

418
00:22:25,440 --> 00:22:28,520
Speaker 2: have monopoly, though they do clearly have bargaining power with

419
00:22:28,560 --> 00:22:32,560
Speaker 2: the wholesalers. Right. But this growth, the fact that they're

420
00:22:32,560 --> 00:22:34,360
Speaker 2: a billion dollar company, the fact that they're a chain

421
00:22:34,400 --> 00:22:37,520
Speaker 2: store competing with these charming mom and pop stores, this

422
00:22:37,720 --> 00:22:42,639
Speaker 2: is creating an army of enemies. A big chunk of

423
00:22:42,760 --> 00:22:47,000
Speaker 2: America is starting to turn on the anp here. And

424
00:22:47,080 --> 00:22:50,360
Speaker 2: some of the enemies are like just obviously self interested, right,

425
00:22:50,400 --> 00:22:53,360
Speaker 2: like all the brokers and middlemen, all the people behind

426
00:22:53,520 --> 00:22:57,160
Speaker 2: the you know, the wholesalers and the mom and pop stores.

427
00:22:57,680 --> 00:22:59,679
Speaker 2: They are obvious enemies of the NP because the MP

428
00:22:59,800 --> 00:23:02,440
Speaker 2: is going right at them. But of course, the more

429
00:23:03,040 --> 00:23:07,280
Speaker 2: charming and in kind of a narrative way important enemy

430
00:23:07,320 --> 00:23:10,280
Speaker 2: of the AMP is the mom and pop stores, right,

431
00:23:10,640 --> 00:23:12,960
Speaker 2: And they are in fact compel. You know, they are

432
00:23:12,960 --> 00:23:16,200
Speaker 2: the places most people bought their groceries, and they are

433
00:23:17,240 --> 00:23:20,960
Speaker 2: one kind of business that you can start by yourself,

434
00:23:21,359 --> 00:23:23,280
Speaker 2: if you're poor, if you're an immigrant, if you're just

435
00:23:23,359 --> 00:23:25,439
Speaker 2: an ordinary person. You want to make a go of it.

436
00:23:25,640 --> 00:23:29,280
Speaker 3: So think about this, Right, you're an immigrant, You've started

437
00:23:29,280 --> 00:23:32,160
Speaker 3: a little grocery store. Maybe you live behind the store, right,

438
00:23:32,320 --> 00:23:35,560
Speaker 3: your kids maybe work stocking in the store, do their homework,

439
00:23:35,600 --> 00:23:39,160
Speaker 3: you know, behind the counter. And every day you got

440
00:23:39,200 --> 00:23:43,960
Speaker 3: to walk by the big amp that are charging prices

441
00:23:44,000 --> 00:23:46,879
Speaker 3: that you cannot you literally cannot do it because you

442
00:23:46,920 --> 00:23:49,399
Speaker 3: have no negotiating power. And I mean that is something

443
00:23:49,440 --> 00:23:52,080
Speaker 3: like you can picture and you can feel for that person.

444
00:23:52,200 --> 00:23:54,360
Speaker 3: You can't just say, well, shut it all down. It's

445
00:23:54,359 --> 00:23:55,800
Speaker 3: all going to be anp in the future.

446
00:23:55,880 --> 00:23:58,919
Speaker 2: There is something fundamentally compelling about small business, right. I

447
00:23:58,920 --> 00:24:01,840
Speaker 2: actually have a theory of it, which is everybody loves

448
00:24:01,840 --> 00:24:06,360
Speaker 2: small business because Democrats love the small the underdogs. Yeah,

449
00:24:06,400 --> 00:24:07,760
Speaker 2: and Republicans love the business.

450
00:24:07,840 --> 00:24:08,040
Speaker 4: Yeah.

451
00:24:08,240 --> 00:24:11,680
Speaker 2: Business something for everybody. Right. So in America in the

452
00:24:11,760 --> 00:24:15,800
Speaker 2: nineth teen twenties, the small business versus big business story

453
00:24:15,920 --> 00:24:20,800
Speaker 2: divide is playing out really clearly with your friendly grocery

454
00:24:20,800 --> 00:24:22,960
Speaker 2: across the street and then the A and P, which

455
00:24:23,000 --> 00:24:25,800
Speaker 2: is run by some faceless millionaire who lives in the

456
00:24:25,840 --> 00:24:30,000
Speaker 2: Plaza hotel in New York City. So there is this

457
00:24:30,040 --> 00:24:35,480
Speaker 2: anti chain store vibe swirling around, and this one I'm

458
00:24:35,480 --> 00:24:38,320
Speaker 2: gonna call him an opportunist because he's such an opportunist,

459
00:24:38,680 --> 00:24:43,280
Speaker 2: comes along and grabs this anti chain store sentiment and

460
00:24:43,359 --> 00:24:47,679
Speaker 2: just rides it. He's a very he's a very up

461
00:24:47,760 --> 00:24:49,760
Speaker 2: your alley kind of guy. Robert, when I found this guy,

462
00:24:49,880 --> 00:24:51,640
Speaker 2: is like, oh my god, Robert's gonna love this guy.

463
00:24:52,040 --> 00:24:57,400
Speaker 2: His name is William Kennon Henderson. Lives outside of Shreport, Louisiana.

464
00:24:57,520 --> 00:24:59,040
Speaker 2: Grows up in a rich family. I think they have

465
00:24:59,080 --> 00:25:02,600
Speaker 2: some kind of iron business. And he buys a local

466
00:25:02,720 --> 00:25:05,919
Speaker 2: radio station and decides he likes being on the radio.

467
00:25:06,080 --> 00:25:07,720
Speaker 3: I love it with the owner of the radio station

468
00:25:07,880 --> 00:25:09,280
Speaker 3: is like, I'm gonna take the show.

469
00:25:09,359 --> 00:25:12,920
Speaker 2: Thanks. It is fun to be on the radio. His initials,

470
00:25:12,920 --> 00:25:18,480
Speaker 2: William Kennan Henderson are WKH, so he names the station KWKH.

471
00:25:19,320 --> 00:25:22,240
Speaker 2: Narcissist loves to be on the radio station after himself

472
00:25:22,960 --> 00:25:26,359
Speaker 2: cranks it up to ten thousand watts, which is huge.

473
00:25:26,480 --> 00:25:28,200
Speaker 3: I mean, if you're an AM station at ten thousand

474
00:25:28,240 --> 00:25:30,360
Speaker 3: watch you could hear it probably at night over half

475
00:25:30,400 --> 00:25:31,520
Speaker 3: the United States of America.

476
00:25:31,640 --> 00:25:34,840
Speaker 2: Can you even do that today? Does that even still happen? Unclear?

477
00:25:35,920 --> 00:25:38,199
Speaker 2: Let me check my AM radio. You do have an

478
00:25:38,240 --> 00:25:41,399
Speaker 2: AM radio radio. It's true. When was the last time

479
00:25:41,400 --> 00:25:43,879
Speaker 2: you listened to him radio? This morning? What did you

480
00:25:43,880 --> 00:25:47,600
Speaker 2: listen to? I have listened to Bloomberg Surveillance in my shower. Yes.

481
00:25:47,760 --> 00:25:49,760
Speaker 2: So he cranks the station up to ten thousand watts

482
00:25:49,840 --> 00:25:52,520
Speaker 2: and becomes like kind of low key famous as old

483
00:25:52,520 --> 00:25:58,240
Speaker 2: Man Henderson aka dog On Henderson, aka Hello World Henderson.

484
00:25:57,760 --> 00:26:01,160
Speaker 3: Because he would always begin to show by saying, Hello world. Here,

485
00:26:01,240 --> 00:26:05,119
Speaker 3: let's hear something, Hello world, it's eight o'clock.

486
00:26:05,520 --> 00:26:07,600
Speaker 5: This is old Man Hemns from token to you.

487
00:26:08,119 --> 00:26:11,080
Speaker 2: That gives you the feel for old Man Henderson. Yeah,

488
00:26:11,160 --> 00:26:15,080
Speaker 2: but old Man Henderson is like this proto shock jock.

489
00:26:15,640 --> 00:26:18,399
Speaker 2: He has this amazing thing going where listeners all write

490
00:26:18,400 --> 00:26:21,280
Speaker 2: in to complain about the show and then he insults them.

491
00:26:21,359 --> 00:26:24,359
Speaker 2: It's this great bit that everybody seems to be in on.

492
00:26:24,480 --> 00:26:26,159
Speaker 2: He would get ahead of steam, like he sound a

493
00:26:26,200 --> 00:26:28,719
Speaker 2: little slow there, but he'd the anger would build and

494
00:26:28,760 --> 00:26:30,919
Speaker 2: he would like go out of them. Yeah. Yeah, So

495
00:26:31,000 --> 00:26:33,120
Speaker 2: here we have a letter and a response. Here read

496
00:26:33,119 --> 00:26:35,480
Speaker 2: the letter from the listener that he read on the air.

497
00:26:36,040 --> 00:26:41,159
Speaker 3: I'm a frequent listener in on radio station KWKH of Shreveport, Louisiana,

498
00:26:41,200 --> 00:26:44,960
Speaker 3: and believe that the disgusting language and profane remarks by W. K.

499
00:26:45,080 --> 00:26:48,320
Speaker 3: Henderson over the air from said station are sufficient reason

500
00:26:48,440 --> 00:26:51,360
Speaker 3: for the Federal Radio Commission to invoke its own rules

501
00:26:51,400 --> 00:26:54,480
Speaker 3: and regulations and revoke the license of such station.

502
00:26:55,400 --> 00:26:58,320
Speaker 2: The moralists do not like old man Henderson, so read

503
00:26:58,320 --> 00:26:59,320
Speaker 2: the response.

504
00:26:59,200 --> 00:27:02,000
Speaker 3: One hell, don't you turn the little knobs of your

505
00:27:02,119 --> 00:27:06,199
Speaker 3: radio set. Every radio set has little knobs on it.

506
00:27:06,600 --> 00:27:09,399
Speaker 3: You made an ass out of yourself by sending me

507
00:27:09,520 --> 00:27:10,879
Speaker 3: this telegram.

508
00:27:12,000 --> 00:27:15,119
Speaker 2: That's scary, Old Ben Anderson. I like that. I got it.

509
00:27:15,240 --> 00:27:20,639
Speaker 2: I'm intimidated. So, like every radio person who has to

510
00:27:20,640 --> 00:27:23,600
Speaker 2: talk all day, William Cannon, Henderson has a lot of

511
00:27:23,840 --> 00:27:28,400
Speaker 2: airtime to fill. And one day in nineteen twenty nine,

512
00:27:28,560 --> 00:27:30,679
Speaker 2: he has a friend of his come on the show.

513
00:27:30,960 --> 00:27:33,520
Speaker 2: His friend runs a local bank there in Treeport, and

514
00:27:33,560 --> 00:27:36,960
Speaker 2: the banker is against these new chain stores like anp.

515
00:27:37,400 --> 00:27:40,040
Speaker 2: But anyway, guess why the banker didn't.

516
00:27:39,840 --> 00:27:43,919
Speaker 3: Like chainstores, Because if you're a local banker, you are

517
00:27:43,960 --> 00:27:47,360
Speaker 3: not lending money to A ANDP in New Jersey. You're

518
00:27:47,400 --> 00:27:50,200
Speaker 3: lending money to tiny mom and pop businesses to start

519
00:27:50,240 --> 00:27:53,919
Speaker 3: their own grocery stores. You make a living on the

520
00:27:53,960 --> 00:27:56,680
Speaker 3: inefficiencies of little small businesses.

521
00:27:56,800 --> 00:27:59,160
Speaker 2: Yes, and if the anp puts them out of business,

522
00:27:59,560 --> 00:28:03,920
Speaker 2: they can't pay back the money you loaned them. So

523
00:28:04,240 --> 00:28:07,639
Speaker 2: the banker comes on the show and does this anti

524
00:28:07,720 --> 00:28:11,920
Speaker 2: chain store rant. And then after that, all these males

525
00:28:12,040 --> 00:28:15,760
Speaker 2: starts to flood into the studio from listeners who are like, yeah,

526
00:28:15,840 --> 00:28:18,159
Speaker 2: I hate chain stores too. They take all our money

527
00:28:18,400 --> 00:28:21,000
Speaker 2: and they send it off to those evil bankers on

528
00:28:21,040 --> 00:28:23,440
Speaker 2: Wall Street instead of, you know, keeping it in the community.

529
00:28:23,960 --> 00:28:26,520
Speaker 2: And so all man Interestson decides he has found his

530
00:28:26,760 --> 00:28:29,080
Speaker 2: great cause, right, he has found this thing that he

531
00:28:29,119 --> 00:28:32,679
Speaker 2: can he can ride the popular anger on, and so

532
00:28:33,160 --> 00:28:36,399
Speaker 2: he starts attacking chain stores all the time on his show.

533
00:28:36,840 --> 00:28:39,240
Speaker 2: Here's this one little clip that we found. The idea

534
00:28:39,280 --> 00:28:42,440
Speaker 2: is to chain everything. Confound it and plague take it.

535
00:28:42,920 --> 00:28:45,320
Speaker 1: You want to write to your senators, you want to

536
00:28:45,320 --> 00:28:46,480
Speaker 1: write to your congressman.

537
00:28:47,280 --> 00:28:48,800
Speaker 4: Is all wrong though?

538
00:28:48,960 --> 00:28:52,040
Speaker 2: Gone it? Write a letter, Robert, We've got more in

539
00:28:52,040 --> 00:28:53,480
Speaker 2: the chance to give give me more, Henderson.

540
00:28:53,800 --> 00:28:56,640
Speaker 3: We can whip these chain stores. We can whip the

541
00:28:56,680 --> 00:28:58,600
Speaker 3: whole cock eyed world when.

542
00:28:58,440 --> 00:29:00,520
Speaker 2: We are right. I'll be your leader.

543
00:29:00,640 --> 00:29:02,960
Speaker 3: I'll whip hell out of them if you will support me,

544
00:29:03,040 --> 00:29:05,320
Speaker 3: which is probably why they're writing in about his language.

545
00:29:05,320 --> 00:29:06,280
Speaker 3: Whip the hell out of him.

546
00:29:06,320 --> 00:29:07,840
Speaker 2: I mean, this was edge a little much.

547
00:29:07,920 --> 00:29:12,560
Speaker 3: And then he starts calling for boycotts, boycotts of the amp.

548
00:29:13,040 --> 00:29:15,640
Speaker 3: We can drive them out in thirty days if you

549
00:29:15,800 --> 00:29:17,800
Speaker 3: people will stay out of their stores.

550
00:29:18,960 --> 00:29:23,440
Speaker 2: Diagnam it and confound it. So we got Henderson whipping

551
00:29:23,560 --> 00:29:27,200
Speaker 2: up the masses. But you know it's not just him, right,

552
00:29:27,240 --> 00:29:30,800
Speaker 2: A real thing is happening here. We're getting into the

553
00:29:30,920 --> 00:29:34,920
Speaker 2: nineteen thirties now, which of course it's the Great Depression play,

554
00:29:34,920 --> 00:29:40,080
Speaker 2: our Great Depression theme music, and that is making popular

555
00:29:40,160 --> 00:29:44,400
Speaker 2: sentiment turn against you know, these amazing efficiencies of modern business.

556
00:29:44,440 --> 00:29:46,560
Speaker 2: When a third of people are out of work, you're

557
00:29:46,600 --> 00:29:48,760
Speaker 2: not so psyched about efficient businesses.

558
00:29:48,920 --> 00:29:50,479
Speaker 3: So even though the folks at A and P are

559
00:29:50,520 --> 00:29:52,360
Speaker 3: getting up every morning and trying to figure out how

560
00:29:52,360 --> 00:29:57,440
Speaker 3: to get cheaper groceries to people beset by the depression, yes, yes,

561
00:29:57,560 --> 00:30:00,479
Speaker 3: people are like I would rather punish the big people

562
00:30:01,240 --> 00:30:02,400
Speaker 3: than by cheaper groceries.

563
00:30:02,920 --> 00:30:06,800
Speaker 2: They're starting anti chainstore newspapers. One it's called Chained, another

564
00:30:06,920 --> 00:30:11,160
Speaker 2: is called the chain store Menace, and state legislatures are listening.

565
00:30:11,440 --> 00:30:15,040
Speaker 2: They are actually passing laws that impose special taxes on

566
00:30:15,160 --> 00:30:17,720
Speaker 2: chain stores, where like the more stores you have, the

567
00:30:17,760 --> 00:30:21,000
Speaker 2: higher the tax. Louisiana, the home state of old Man Henderson,

568
00:30:21,400 --> 00:30:24,080
Speaker 2: passes a chain store tax that costs an p over

569
00:30:24,160 --> 00:30:27,760
Speaker 2: eight million dollars. And that's just for Louisiana in nineteen

570
00:30:27,840 --> 00:30:31,640
Speaker 2: thirties money. So Henderson is riding this wave and he

571
00:30:31,720 --> 00:30:35,400
Speaker 2: creates an organization to fight the chain stores. It's called

572
00:30:35,600 --> 00:30:40,560
Speaker 2: the Merchant's Minutemen. And you'll lose twelve dollars, brings in

573
00:30:40,600 --> 00:30:44,400
Speaker 2: three hundred and seventy three thousand dollars. And Robert I

574
00:30:44,640 --> 00:30:45,960
Speaker 2: don't want to shock you here.

575
00:30:45,920 --> 00:30:51,600
Speaker 3: Yeah, but I'm sorry, the populist radio shock jock in Shreveport,

576
00:30:51,680 --> 00:30:55,440
Speaker 3: Louisiana bringing in money from poor listeners during the depression.

577
00:30:55,520 --> 00:30:57,120
Speaker 2: What are you going to tell me about this great guy?

578
00:30:57,800 --> 00:31:01,320
Speaker 2: He's not entirely on the level. He's not everything he

579
00:31:01,360 --> 00:31:04,720
Speaker 2: claims to be. Truns out he used about one hundred

580
00:31:04,760 --> 00:31:07,440
Speaker 2: and fifty thousand dollars of the money from the ordinary

581
00:31:07,480 --> 00:31:10,840
Speaker 2: people to pay off debts of his family iron works business.

582
00:31:11,040 --> 00:31:13,920
Speaker 2: Who can you trust this world if not a shock juck?

583
00:31:14,400 --> 00:31:16,920
Speaker 2: So this comes out, Henderson goes down, has to sell

584
00:31:16,960 --> 00:31:20,160
Speaker 2: his station in nineteen thirty three, but the anti chain

585
00:31:20,200 --> 00:31:25,080
Speaker 2: store movement is launched, and some other much more powerful

586
00:31:25,840 --> 00:31:29,120
Speaker 2: anti chain store crusaders are just getting going now.

587
00:31:29,120 --> 00:31:31,880
Speaker 3: I should say that this is a classic thing in

588
00:31:32,000 --> 00:31:37,560
Speaker 3: economics that we call diffuse benefits and concentrated costs. Meaning

589
00:31:37,600 --> 00:31:42,600
Speaker 3: in situations like this, everyone benefits from cheaper groceries, right,

590
00:31:42,960 --> 00:31:45,560
Speaker 3: but a few people are paying big costs for this.

591
00:31:45,920 --> 00:31:48,640
Speaker 3: Those small businesses. Yes, But the middleman that we talked about,

592
00:31:48,640 --> 00:31:52,120
Speaker 3: the manufacturers in some cases like they're the ones that

593
00:31:52,200 --> 00:31:55,760
Speaker 3: are incentivized to call up senators and congressmen and say

594
00:31:55,800 --> 00:31:58,280
Speaker 3: we should do something about this. You know, the family

595
00:31:58,280 --> 00:32:00,000
Speaker 3: in Brooklyn isn't going to call up and say, oh,

596
00:32:00,040 --> 00:32:01,760
Speaker 3: I saved thirty seven cents last week.

597
00:32:02,040 --> 00:32:05,840
Speaker 2: Yes, And that is in fact what happens. And crucially,

598
00:32:07,080 --> 00:32:09,680
Speaker 2: these people who are being harmed by stores like the

599
00:32:09,800 --> 00:32:13,400
Speaker 2: NP get the ear of this congressman named Wright Patman

600
00:32:14,360 --> 00:32:17,280
Speaker 2: grew up in a two room loghouse in Texas, worked

601
00:32:17,280 --> 00:32:20,200
Speaker 2: as a tenant farmer, and I do think he genuinely felt,

602
00:32:20,240 --> 00:32:22,600
Speaker 2: you know, the plight of the small businessman up against

603
00:32:22,640 --> 00:32:26,640
Speaker 2: the chain store. And in nineteen thirty five he introduced

604
00:32:26,880 --> 00:32:29,880
Speaker 2: a bill to amend the Clayton Nanty Trust Act, one

605
00:32:29,880 --> 00:32:33,440
Speaker 2: of the key pieces of you know, competition law in America,

606
00:32:34,240 --> 00:32:38,680
Speaker 2: and the language of his bill is incredible. This is

607
00:32:38,720 --> 00:32:40,560
Speaker 2: a bill in Congress that's going to become a law.

608
00:32:40,600 --> 00:32:43,360
Speaker 2: It's not a radio show. The headline of this section

609
00:32:43,440 --> 00:32:47,040
Speaker 2: of the bill says, in all caps, the evil let

610
00:32:47,080 --> 00:32:48,160
Speaker 2: me read this, Let's give it to us.

611
00:32:48,360 --> 00:32:51,960
Speaker 3: The goliath is the huge chain stores, sapping the civic

612
00:32:52,000 --> 00:32:56,400
Speaker 3: life of local communities with an absentee over lordship, draining

613
00:32:56,400 --> 00:32:59,720
Speaker 3: off their earnings to his coffers, and reducing their independent

614
00:32:59,760 --> 00:33:03,920
Speaker 3: businessmen to employees or to idleness. His opponents are not

615
00:33:04,080 --> 00:33:07,600
Speaker 3: only the independent competitors whom he seeks to eliminate, but

616
00:33:07,680 --> 00:33:11,760
Speaker 3: the consuming public, whom he hopes then to have at

617
00:33:11,760 --> 00:33:15,960
Speaker 3: his mercy. That last part is a really crucial thing

618
00:33:16,240 --> 00:33:19,920
Speaker 3: in this, in this anti chain store rhetoric, which is

619
00:33:21,160 --> 00:33:24,080
Speaker 3: they're saying, sure, you have cheap prices now, but what

620
00:33:24,200 --> 00:33:27,080
Speaker 3: happens when everybody goes out of business and amp runs

621
00:33:27,160 --> 00:33:30,480
Speaker 3: everything in your life, Then they'll jack up the prices

622
00:33:30,560 --> 00:33:32,480
Speaker 3: and you will be at their mercy. As it says

623
00:33:32,480 --> 00:33:33,040
Speaker 3: in the bill.

624
00:33:33,040 --> 00:33:35,920
Speaker 2: Yes, yes, right, this is the fear. The fear is

625
00:33:35,960 --> 00:33:39,040
Speaker 2: that the low prices are just temporary, right, They're just

626
00:33:39,120 --> 00:33:41,760
Speaker 2: going to do that until there's nobody else left and

627
00:33:41,800 --> 00:33:43,400
Speaker 2: then through the roof.

628
00:33:43,520 --> 00:33:48,000
Speaker 3: But this is every battle against every big store or

629
00:33:48,040 --> 00:33:51,200
Speaker 3: corporation in America for the next hundred years.

630
00:33:51,640 --> 00:33:55,600
Speaker 2: We hear this exact same argument, right. Patman's Bill passes

631
00:33:57,480 --> 00:34:02,040
Speaker 2: makes it illegal for manufacturers to give discounts to big

632
00:34:02,080 --> 00:34:06,560
Speaker 2: purchasers like the A and P. If doing so lessons competition,

633
00:34:06,600 --> 00:34:09,440
Speaker 2: which ends up being hard to prove, but makes it harder,

634
00:34:09,960 --> 00:34:12,359
Speaker 2: and it also makes it much harder for the to

635
00:34:12,440 --> 00:34:15,800
Speaker 2: get that advertising money from the manufacturers. So it is

636
00:34:15,920 --> 00:34:19,520
Speaker 2: clearly going directly at these practices they have used to

637
00:34:19,680 --> 00:34:23,000
Speaker 2: drive down their own costs, and it works. It has

638
00:34:23,040 --> 00:34:27,160
Speaker 2: its intended effect. The A and P raises its prices

639
00:34:27,280 --> 00:34:33,600
Speaker 2: because it basically has to congratulations success. But the MP

640
00:34:33,800 --> 00:34:36,359
Speaker 2: is still cheaper than those stores, right. They are huge,

641
00:34:36,400 --> 00:34:39,920
Speaker 2: they're more efficient, So even though the gap has narrowed,

642
00:34:39,960 --> 00:34:42,920
Speaker 2: they're still cheaper. They're still successful. People still want to

643
00:34:42,920 --> 00:34:46,799
Speaker 2: shop there because they like cheap groceries, and so in

644
00:34:46,920 --> 00:34:52,240
Speaker 2: nineteen forty two, the government goes further. Federal prosecutors bring

645
00:34:52,440 --> 00:34:56,000
Speaker 2: criminal charges against the company and its top executives John

646
00:34:56,040 --> 00:35:00,040
Speaker 2: and George Hartford, among others, for engaging in a combination

647
00:35:00,200 --> 00:35:04,719
Speaker 2: and conspiracy unreasonably to restrain interstate commerce in food products

648
00:35:05,120 --> 00:35:09,200
Speaker 2: and also conspiracy to monopolize a substantial part of such

649
00:35:09,360 --> 00:35:15,640
Speaker 2: products criminal criminal. These are criminal charges. Notice they're not

650
00:35:17,080 --> 00:35:20,760
Speaker 2: saying they actually have a grocery store monopoly. Right. Nationally,

651
00:35:20,800 --> 00:35:25,000
Speaker 2: the ANP has less than ten percent of the grocery

652
00:35:25,000 --> 00:35:28,160
Speaker 2: store business. There are towns where it's above fifty percent,

653
00:35:28,800 --> 00:35:33,240
Speaker 2: but there is no claim that the ANP is exploiting

654
00:35:33,239 --> 00:35:36,840
Speaker 2: shoppers who have to shop at their store. The government

655
00:35:36,920 --> 00:35:40,320
Speaker 2: says the NP has too much power over manufacturers, right,

656
00:35:40,440 --> 00:35:43,760
Speaker 2: and you know, there are all these cases where ANP

657
00:35:43,920 --> 00:35:46,640
Speaker 2: will get into a dispute with like Jello and being like,

658
00:35:47,200 --> 00:35:50,080
Speaker 2: give us a better dealer, we'll sell NP brand Gelatine.

659
00:35:50,960 --> 00:35:53,320
Speaker 2: On the retail side, according to the government, the ANP

660
00:35:53,480 --> 00:35:55,839
Speaker 2: runs some stores at a loss in order to drive

661
00:35:55,880 --> 00:35:59,600
Speaker 2: smaller competitors out of business. Right that right, Patman story.

662
00:36:00,360 --> 00:36:03,560
Speaker 2: But the government doesn't make the claim that there are

663
00:36:03,640 --> 00:36:06,960
Speaker 2: instances where the ANP drives a competitor out of business

664
00:36:07,120 --> 00:36:10,919
Speaker 2: and then jacks up prices, right Like, they don't say

665
00:36:10,960 --> 00:36:13,440
Speaker 2: that is happening. They don't find evidence of its happening.

666
00:36:14,200 --> 00:36:16,200
Speaker 2: Here's what they do say. Here's what the prosecutor in

667
00:36:16,239 --> 00:36:18,760
Speaker 2: the criminal trial says about those low prices.

668
00:36:19,040 --> 00:36:22,120
Speaker 3: ANP sells food cheaply in its stores because it is

669
00:36:22,160 --> 00:36:26,120
Speaker 3: a giant blood sucker, taking its toll from all levels

670
00:36:26,120 --> 00:36:27,000
Speaker 3: of the food industry.

671
00:36:27,680 --> 00:36:30,560
Speaker 2: You might even say it's a vampire squid sticking its

672
00:36:30,600 --> 00:36:32,360
Speaker 2: blood funnel into.

673
00:36:32,160 --> 00:36:34,200
Speaker 3: Anything that smells like money. I think it was.

674
00:36:34,840 --> 00:36:38,279
Speaker 2: So the problem, according to the government is the low prices, right.

675
00:36:38,400 --> 00:36:42,480
Speaker 2: That is why these charges are being brought against NP.

676
00:36:43,080 --> 00:36:45,360
Speaker 2: The trial actually runs for a couple months, and on

677
00:36:45,400 --> 00:36:48,719
Speaker 2: the last day of the trial, John Hartford himself, the

678
00:36:48,800 --> 00:36:52,720
Speaker 2: CEO of the company, takes the stand and we actually

679
00:36:52,719 --> 00:36:55,040
Speaker 2: get a nice picture of him from the Chicago Tribune.

680
00:36:55,440 --> 00:36:58,520
Speaker 3: He's seventy three, but looks younger, spare, and well tanned.

681
00:36:58,760 --> 00:37:01,040
Speaker 3: He was wearing a gray suit, gray shirt, and a

682
00:37:01,080 --> 00:37:01,600
Speaker 3: bow tie.

683
00:37:01,600 --> 00:37:03,560
Speaker 2: Again with the bow tie.

684
00:37:03,920 --> 00:37:07,160
Speaker 3: At one point he summarized ANP's general policy by saying,

685
00:37:07,360 --> 00:37:09,839
Speaker 3: we would rather sell two hundred pounds of butter at

686
00:37:09,960 --> 00:37:13,360
Speaker 3: one cent profit than one hundred pound a two cents profit.

687
00:37:14,040 --> 00:37:17,120
Speaker 2: Selling cheap groceries is wrong. John Hartford does not want

688
00:37:17,160 --> 00:37:19,959
Speaker 2: to be right. It turns out the judge thinks selling

689
00:37:20,040 --> 00:37:24,160
Speaker 2: cheap groceries is wrong. In his ruling, he writes that

690
00:37:24,360 --> 00:37:28,720
Speaker 2: US antitrust law has no concern with prices but looks

691
00:37:28,719 --> 00:37:32,920
Speaker 2: solely to competition, and so he finds John and George

692
00:37:32,920 --> 00:37:36,640
Speaker 2: Hartford and a bunch of other executives guilty as charged.

693
00:37:37,160 --> 00:37:41,000
Speaker 3: I don't want to come off as the conservative economics guy,

694
00:37:42,840 --> 00:37:45,719
Speaker 3: but the goal of the government should be for everyone

695
00:37:45,800 --> 00:37:50,400
Speaker 3: to become more efficient and sell things cheaper everywhere, not

696
00:37:50,560 --> 00:37:54,000
Speaker 3: to stop that competition by making things more expensive.

697
00:37:54,680 --> 00:38:21,480
Speaker 2: That is in fact still to come on our show. Okay,

698
00:38:21,520 --> 00:38:24,200
Speaker 2: we're back from the ads. The Hartfords have just been convicted.

699
00:38:24,640 --> 00:38:26,000
Speaker 2: It's not like they have to go to jail, though

700
00:38:26,040 --> 00:38:29,640
Speaker 2: they're fined something like ten thousand dollars. They're rich. That's

701
00:38:29,680 --> 00:38:32,960
Speaker 2: fine for them. But the government does keep coming at

702
00:38:32,960 --> 00:38:35,799
Speaker 2: the ANP. They bring a civil suit. Want to break

703
00:38:35,800 --> 00:38:38,560
Speaker 2: the company up into seven pieces or something to like

704
00:38:38,600 --> 00:38:41,560
Speaker 2: the A and B the anc the at very good

705
00:38:41,760 --> 00:38:44,120
Speaker 2: judges love to talk about breaking up companies. As to

706
00:38:44,320 --> 00:38:47,880
Speaker 2: federal antitrust prosecutor. Yes, rights that make a deal. They

707
00:38:47,880 --> 00:38:50,440
Speaker 2: don't have to break up that way they divest some

708
00:38:50,560 --> 00:38:54,840
Speaker 2: like wholesale you know, produce distributor or something. In the

709
00:38:54,920 --> 00:38:57,920
Speaker 2: fight against big business persists. Right, it kind of moves

710
00:38:57,960 --> 00:38:59,880
Speaker 2: on from the anp in a way that's worth talking

711
00:38:59,880 --> 00:39:03,320
Speaker 2: about because it is this central arc really an American

712
00:39:03,360 --> 00:39:07,800
Speaker 2: business over the last seventy years. So the government keeps

713
00:39:07,840 --> 00:39:11,960
Speaker 2: going to court to protect small businesses from big businesses

714
00:39:12,160 --> 00:39:15,719
Speaker 2: in the name of competition, and judges keep finding in

715
00:39:15,840 --> 00:39:22,319
Speaker 2: favor of small businesses. Big businesses keep losing, and eventually

716
00:39:22,560 --> 00:39:25,640
Speaker 2: in the sixties, this law professor comes along and looks

717
00:39:25,680 --> 00:39:30,200
Speaker 2: at a bunch of these cases and he says, this

718
00:39:30,280 --> 00:39:31,720
Speaker 2: is ridiculous, right.

719
00:39:32,080 --> 00:39:36,279
Speaker 3: And it's really brings you to the core. Right, capitalism

720
00:39:36,320 --> 00:39:40,640
Speaker 3: needs competition to work. But what is competition? What is

721
00:39:40,680 --> 00:39:43,959
Speaker 3: the definition of competition, and why is competition good?

722
00:39:44,239 --> 00:39:47,480
Speaker 2: Yeah, I mean clearly we know monopolies are bad. Monopolies

723
00:39:47,480 --> 00:39:51,239
Speaker 2: are a failure mode of market economies. Right.

724
00:39:51,360 --> 00:39:54,320
Speaker 3: One company that controls the entire market can charge anything

725
00:39:54,360 --> 00:39:55,760
Speaker 3: they want. That is a failure.

726
00:39:56,200 --> 00:39:59,160
Speaker 2: Rarely happens. Rarely happens, and it is a useful time

727
00:39:59,200 --> 00:40:01,720
Speaker 2: for the government to intervene in a market and say

728
00:40:02,080 --> 00:40:05,040
Speaker 2: we need more competition here. So this law professor comes

729
00:40:05,040 --> 00:40:08,080
Speaker 2: along in the sixties and he looks at these cases

730
00:40:08,360 --> 00:40:11,080
Speaker 2: where the government has been winning, has been intervening in

731
00:40:11,080 --> 00:40:15,000
Speaker 2: the name of competition to protect small business, and he says, okay,

732
00:40:15,480 --> 00:40:18,080
Speaker 2: let's think about how a market works. Right. You got

733
00:40:18,080 --> 00:40:22,080
Speaker 2: a bunch of companies, and some company comes in and

734
00:40:22,360 --> 00:40:25,759
Speaker 2: grows maybe by selling stuff cheaper, say, and people love it,

735
00:40:25,800 --> 00:40:27,799
Speaker 2: and they'll go and start buying from that company, and

736
00:40:27,840 --> 00:40:31,880
Speaker 2: as a result, it gets big. What is that? That

737
00:40:32,040 --> 00:40:35,400
Speaker 2: is competition working. That is the way market competition is

738
00:40:35,400 --> 00:40:37,560
Speaker 2: supposed to work. Somebody comes along and is more efficient,

739
00:40:37,920 --> 00:40:39,719
Speaker 2: does a better job of giving people what they want,

740
00:40:39,760 --> 00:40:43,360
Speaker 2: and gets bigger than everybody else. That's good. We should

741
00:40:43,560 --> 00:40:47,160
Speaker 2: like that. And when the government is intervening to punish

742
00:40:47,200 --> 00:40:51,920
Speaker 2: those companies, that is actually harming competition. It's the opposite

743
00:40:51,920 --> 00:40:53,840
Speaker 2: of what they say they're doing. And he writes this

744
00:40:53,960 --> 00:40:58,440
Speaker 2: book called The Antitrust Paradox. Becomes a famous book, and

745
00:40:58,480 --> 00:41:02,040
Speaker 2: the guy writes it becomes nerd famous. His name's Robert Bork.

746
00:41:02,200 --> 00:41:05,880
Speaker 2: He'll later become kind of famous, famous for being nominated

747
00:41:05,920 --> 00:41:08,680
Speaker 2: to the Supreme Court and then rejected for being too

748
00:41:09,520 --> 00:41:14,440
Speaker 2: whatever ideological. Let's say, but the book is super influential.

749
00:41:14,520 --> 00:41:18,360
Speaker 2: His basic argument is, if consumers are paying a less

750
00:41:19,200 --> 00:41:23,080
Speaker 2: that's good. That is competition working, and the government should

751
00:41:23,120 --> 00:41:26,160
Speaker 2: not intervene. If you have more choices and or lower prices,

752
00:41:26,320 --> 00:41:29,080
Speaker 2: competition is working and the government shouldn't intervene. And he

753
00:41:29,120 --> 00:41:33,480
Speaker 2: actually changes the way competition law is enforced. This anti

754
00:41:33,520 --> 00:41:36,840
Speaker 2: big business sentiment that was going at the ANP it

755
00:41:36,880 --> 00:41:42,760
Speaker 2: basically goes away within antitrust law for decades until until

756
00:41:42,840 --> 00:41:47,439
Speaker 2: right then there's a backlash to the backlash, Yes, that

757
00:41:47,840 --> 00:41:51,360
Speaker 2: starts to rise up in the twenty first century, largely

758
00:41:51,400 --> 00:41:55,800
Speaker 2: in response to the growth of giant tech companies like Amazon.

759
00:41:56,680 --> 00:41:59,719
Speaker 2: And there's this famous paper written about a decade ago

760
00:41:59,800 --> 00:42:03,919
Speaker 2: now by actually a law student named Lenacon, called Amazon's

761
00:42:03,960 --> 00:42:07,319
Speaker 2: Antitrust Paradox that talked, among other things, about the way

762
00:42:07,360 --> 00:42:10,000
Speaker 2: Amazon used store brands to gain what she argued was

763
00:42:10,040 --> 00:42:14,440
Speaker 2: an unfair competition over other businesses selling on Amazon.

764
00:42:14,160 --> 00:42:17,240
Speaker 3: And unlike A and P, they had the advantage also

765
00:42:17,360 --> 00:42:21,359
Speaker 3: of data, you know, and this worldwide supply chain out

766
00:42:21,440 --> 00:42:23,600
Speaker 3: there that A and P didn't have. So she was

767
00:42:23,680 --> 00:42:28,240
Speaker 3: like basically saying that Amazon was ANP on steroids, really

768
00:42:28,400 --> 00:42:32,360
Speaker 3: just twisting people's arms to get better deals, but also

769
00:42:32,520 --> 00:42:35,359
Speaker 3: if they see a popular product, using that data to

770
00:42:35,560 --> 00:42:37,799
Speaker 3: actually develop their own product and put it.

771
00:42:37,760 --> 00:42:40,400
Speaker 2: First in the list. And so this isn't just a

772
00:42:40,480 --> 00:42:42,520
Speaker 2: law student writing a paper. This is a law student

773
00:42:42,560 --> 00:42:46,280
Speaker 2: writing a paper that makes her famous and then gets

774
00:42:46,440 --> 00:42:49,920
Speaker 2: appointed to run the Federal Trade Commission under the Biden

775
00:42:49,960 --> 00:42:54,759
Speaker 2: administration to bring anti trust cases, yes, including one against Amazon.

776
00:42:55,160 --> 00:43:00,360
Speaker 2: It's an amazing story, yeah, and super interesting. The Trump

777
00:43:00,400 --> 00:43:04,279
Speaker 2: administration is still pursuing that case against Amazon. Right, this

778
00:43:04,440 --> 00:43:08,520
Speaker 2: weariness of big tech, this anti big business sentiment, at

779
00:43:08,600 --> 00:43:12,400
Speaker 2: least anti some big business sentiment, persists one of the

780
00:43:12,440 --> 00:43:16,880
Speaker 2: few places where many Democrats and many Republicans agree. So

781
00:43:16,960 --> 00:43:19,879
Speaker 2: this A and P fight, this chainstore fight, this big

782
00:43:19,920 --> 00:43:24,000
Speaker 2: business versus small business thing, it is extremely alive to

783
00:43:24,160 --> 00:43:24,640
Speaker 2: this day.

784
00:43:24,719 --> 00:43:28,880
Speaker 3: The interesting thing about this to me is is this

785
00:43:29,160 --> 00:43:31,480
Speaker 3: all centers on the fear of what's going to happen

786
00:43:32,040 --> 00:43:35,000
Speaker 3: when the business becomes too big. And I understand the

787
00:43:35,040 --> 00:43:38,120
Speaker 3: feeling that like they have all the power in the world,

788
00:43:38,200 --> 00:43:40,239
Speaker 3: all the money in the world, if you're Amazon or

789
00:43:40,280 --> 00:43:44,480
Speaker 3: ANP or Google or any of these companies, and you

790
00:43:44,640 --> 00:43:49,719
Speaker 3: fear that. Having done business history, I keep seeing that

791
00:43:49,719 --> 00:43:52,839
Speaker 3: that is the moment when you are most vulnerable as

792
00:43:52,880 --> 00:43:56,000
Speaker 3: a company, when you are at the top. That is

793
00:43:56,040 --> 00:43:58,440
Speaker 3: when the competitors all come after you. And if you

794
00:43:58,480 --> 00:44:01,840
Speaker 3: look at business history, often those moments, the exact moments

795
00:44:01,840 --> 00:44:04,200
Speaker 3: when the government's like, Microsoft, you're too big, We're going

796
00:44:04,239 --> 00:44:06,279
Speaker 3: to have to break you up. Is the moment that

797
00:44:06,320 --> 00:44:11,360
Speaker 3: someone else is developing Google or Netscape or these internet

798
00:44:11,360 --> 00:44:13,360
Speaker 3: companies to take on Microsoft.

799
00:44:13,800 --> 00:44:17,839
Speaker 2: I mean, it is the case that people like Lena Khan,

800
00:44:17,920 --> 00:44:21,120
Speaker 2: the people today who are you know, think antitrust should

801
00:44:21,560 --> 00:44:23,520
Speaker 2: take a harder look at big business. They think it

802
00:44:23,560 --> 00:44:26,000
Speaker 2: shouldn't be just prices, right, they say, like in the

803
00:44:26,000 --> 00:44:31,040
Speaker 2: case of Amazon, Amazon favors Amazon products over other products,

804
00:44:31,080 --> 00:44:34,200
Speaker 2: even when the other products are better, have better reviews. Right.

805
00:44:34,239 --> 00:44:38,320
Speaker 2: So part of their critique is prices are too narrow

806
00:44:38,320 --> 00:44:40,840
Speaker 2: of a lens to look at competition through. But I

807
00:44:40,880 --> 00:44:44,200
Speaker 2: definitely agree with you that, like you do, keep seeing

808
00:44:44,719 --> 00:44:50,319
Speaker 2: the giant business get beat by competitors when everybody's worried

809
00:44:50,320 --> 00:44:51,200
Speaker 2: about it being giants.

810
00:44:51,239 --> 00:44:54,279
Speaker 3: Oh, we should break up Instagram and Facebook. And you're like,

811
00:44:54,280 --> 00:44:55,640
Speaker 3: then TikTok comes out of nowhere.

812
00:44:55,680 --> 00:44:57,360
Speaker 2: Yeah, And I mean it'll be interesting to see what

813
00:44:57,400 --> 00:45:00,680
Speaker 2: happens now right with Google, which clearly does have a

814
00:45:00,719 --> 00:45:06,560
Speaker 2: monopoly on search. Now that you have Chat, GPT and Claude, right,

815
00:45:06,600 --> 00:45:09,080
Speaker 2: you have a large language models that may be the

816
00:45:09,120 --> 00:45:11,520
Speaker 2: first real threat to Google's search.

817
00:45:12,560 --> 00:45:14,319
Speaker 3: So take us back to A and P. They were

818
00:45:14,360 --> 00:45:16,640
Speaker 3: not broken up by the government. They were fined and

819
00:45:16,960 --> 00:45:20,080
Speaker 3: all of these things, but they were not shattered as

820
00:45:20,080 --> 00:45:22,719
Speaker 3: a company. And yet I don't see an AAP on

821
00:45:22,760 --> 00:45:23,240
Speaker 3: my corner.

822
00:45:23,440 --> 00:45:28,440
Speaker 2: They got out competed in the market. Yeah, So the

823
00:45:28,800 --> 00:45:33,520
Speaker 2: Hartford's died in the fifties. Actually, John Hartford was in

824
00:45:33,560 --> 00:45:35,960
Speaker 2: an elevator in the Chrysler building I believe, coming from

825
00:45:36,000 --> 00:45:38,240
Speaker 2: a board meeting in nineteen fifty one when he dropped

826
00:45:38,239 --> 00:45:41,000
Speaker 2: out of a heart attack, which is like a cool

827
00:45:41,000 --> 00:45:43,680
Speaker 2: way to go, definitely on brand for him. And the

828
00:45:43,760 --> 00:45:47,080
Speaker 2: decline began not long after that. You know, I don't

829
00:45:47,080 --> 00:45:49,200
Speaker 2: know how crucial those two guys were, but clearly the

830
00:45:49,239 --> 00:45:52,480
Speaker 2: country was changing. The ANP didn't keep up, and other

831
00:45:52,560 --> 00:45:56,480
Speaker 2: stores did. Right, New grocery stores were moving out to

832
00:45:56,520 --> 00:45:58,880
Speaker 2: the suburban strip malls where Americans were moving to the

833
00:45:58,880 --> 00:46:02,800
Speaker 2: ANP state, largely in more urban settings. Other grocery stores

834
00:46:03,280 --> 00:46:05,560
Speaker 2: realized that as Americans were getting richer. They would buy

835
00:46:05,600 --> 00:46:07,640
Speaker 2: more stuff at the grocery store. You know those weird

836
00:46:07,719 --> 00:46:11,160
Speaker 2: aisles where there's like hats and like why is that

837
00:46:11,160 --> 00:46:15,680
Speaker 2: a seasonal products? Christmas decorations sometimes higher margin. The NP

838
00:46:15,760 --> 00:46:19,160
Speaker 2: didn't really get into that, and so they got out competed.

839
00:46:19,640 --> 00:46:22,560
Speaker 2: And it is amazing. And I've come on this a

840
00:46:22,640 --> 00:46:25,040
Speaker 2: number of times in the show. How long the downhill

841
00:46:25,239 --> 00:46:28,400
Speaker 2: arc is for businesses? Right? The ANP kept trying to

842
00:46:28,400 --> 00:46:31,360
Speaker 2: buy their stores, kept trying to figure it out, but

843
00:46:31,840 --> 00:46:36,160
Speaker 2: decade after decade they shrunk until finally, in twenty fifteen,

844
00:46:37,360 --> 00:46:41,160
Speaker 2: the last A ANDP closed. So I want to close

845
00:46:41,200 --> 00:46:48,360
Speaker 2: the show today with just one note on the ANP's legacy,

846
00:46:48,360 --> 00:46:51,520
Speaker 2: on the Hartford's legacy, and that is the store brand, right,

847
00:46:52,239 --> 00:46:54,080
Speaker 2: and in particular, I want to talk for a moment

848
00:46:54,120 --> 00:46:57,319
Speaker 2: about my favorite store brand. You know what it is.

849
00:46:57,400 --> 00:47:00,640
Speaker 3: I've been to Costco with you. Yeah, love Kirkland products.

850
00:47:00,719 --> 00:47:03,400
Speaker 2: I do, which I know it's like the most normy,

851
00:47:03,560 --> 00:47:06,239
Speaker 2: middle aged dad thing to love, but I love it.

852
00:47:06,239 --> 00:47:09,280
Speaker 2: In my house right now, there's Kirkland peanut butter, Kirkland

853
00:47:09,320 --> 00:47:13,200
Speaker 2: olive oil, Kirkland maple syrup. Do you wear Kirklelane. No,

854
00:47:13,320 --> 00:47:16,920
Speaker 2: but I am sorry that I missed the Kirkland knockoff

855
00:47:16,920 --> 00:47:21,239
Speaker 2: of the Lululemon pants that Lululemon actually sued Costco over.

856
00:47:21,280 --> 00:47:22,719
Speaker 2: That made me want to buy the pants, but I

857
00:47:22,719 --> 00:47:25,520
Speaker 2: didn't get there in time, and I want to. I

858
00:47:25,560 --> 00:47:30,480
Speaker 2: want to say, what a just economic juggernaut. Kirkland is

859
00:47:30,560 --> 00:47:33,720
Speaker 2: Kirkland alone, not Costco, but just the store brand at Costco.

860
00:47:34,200 --> 00:47:39,120
Speaker 2: Kirkland has annual sales of something like eighty six billion

861
00:47:39,200 --> 00:47:44,080
Speaker 2: dollars a year, which is more than the annual sales

862
00:47:44,320 --> 00:47:50,600
Speaker 2: of Levi's, Hershey, Kellogg and Coca Cola combined. Boom.

863
00:47:51,040 --> 00:47:55,680
Speaker 3: That is the legacy of anp Hello World, It's old,

864
00:47:55,719 --> 00:48:00,799
Speaker 3: Mangldstein come back to us at Business History.

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Speaker 5: At pushkin dot FM. Today's show was produced by Gabriel

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Speaker 5: Hunter Chang. Our showrunner is Ryan Dilly. Our engineer is

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Speaker 5: Sarah Bruguier. I'm Jacob Oldstein, I'm Roberts Smith.

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Speaker 2: Dog Gone It