Farmer Jack

Infobox Defunct Company
company_name = Farmer Jack
company_
type = Supermarket
slogan = "It's Always Savings Time at Farmer Jack."
fate = Acquisition by A&P, then liquidation
successor = Kroger, independent grocers
foundation = 1924
defunct = July 7, 2007
location = Detroit, Michigan
industry = Retail
key_people =
products =
num_employees =
parent = The Great Atlantic and Pacific Tea Company
subsid =

Farmer Jack was a supermarket chain based in Detroit, Michigan. At its peak, it operated more than 100 stores, primarily in the Detroit metropolitan area. In its final years the chain operated as a subsidiary of New Jersey-based A&P (The Great Atlantic and Pacific Tea Company) corporation. A&P closed all remaining Farmer Jack stores on July 7, 2007.

Farmer Jack stores were typically in suburban neighborhoods and usually anchored strip malls. Each store offered standard groceries, in addition to operating full-service produce, floral, deli, bakery, pharmacy, meat and seafood departments. Many stores also featured a bank.

History

The company dated to 1924, when Jewish Russian immigrant Tom Borman opened a neighborhood grocery store, Tom's Quality Meats, at 12th and Forest in Detroit. In 1927, his brother Abraham "Al" Borman started his own store on Kercheval on the city's east side. The brothers eventually formed a partnership. The brothers split up in 1945, with Tom developing Lucky Stores and Al developing Food Fair markets. In 1955, the two operations merge into Food Fair, operating under the corporate entity Borman Food Stores Inc. Four years later, the renamed Borman's Inc., sold more than 400,000 shares of stock, with the Bormans retaining control. Proceeds from the stock sale fueled a buying binge: Borman's bought State Super Markets of Ferndale American Stores Inc., acquired nine Lipson-Gourwitz Co. markets in Detroit and planned an expansion to 46 stores.

In 1966, Borman announced the opening of three suburban shopping centers that would contain gas stations, car washes, garden supply stores, Yankee discount stores and food stores -- operating under the new moniker of "Farmer Jack."

By 1972, Detroit became a major zone of grocery store competition, with about six major grocery chains competing in the region, including Chatham's and Great Scott! In a speech, Paul Borman claimed A&P's move to discount-type stores had nearly destroyed the supermarket industry.

By 1987, the company was struggling to keep Detroit area stores operating amid a strike by clerks and cashiers, who were supported by meat cutters and Teamsters. Borman's eventually bought out 800 workers at a cost of $12.9 million. This started a period of losses that would eventually prompt the sale to A&P. During a decade of merger mania in the supermarket business, Great Atlantic & Pacific Tea Co. Inc. (A&P) paid $76 million for 79 Farmer Jack stores operated by Borman's. The buyout placed A&P in the number one slot among grocery stores in the Detroit area, with control of 36% of the market. By 1994, nearly all A&P stores in Metro Detroit had been converted to Farmer Jack stores.

Restructuring

After initial merger pains, Farmer Jack rose to prosperity, becoming A&P's most profitable division at one point. But by the early 2000s, the chain struggled to compete with newer, larger stores; less-senior, lower-cost labor; and more tech-savvy, efficient operations offered by rivals Meijer and Kroger. Rather than investing significant capital into upgrading existing stores, A&P was spending it on expanding the chain beyond Detroit and into neighboring markets Toledo, Flint, Saginaw and Lansing. At the same time, Meijer was engaged in an aggressive price-cutting campaign to fend off K-Mart's aggressive Super K expansion, as well as Wal-Mart's proposed entry of SuperCenters. Farmer Jack had to slash its prices to compete.

Farmer Jack's Detroit-area stores were experiencing significant drops in revenue due to the price cuts as well as consumer flight. Rather than adding revenue, the chain's expansion proved to be a failure and major financial drain; Farmer Jack was now losing significant amounts of money. Then an accounting scandal hit the chain.

In 2002, the chain reorganized, closed stores and cut staffing. Farmer Jack tried to improve its image by marketing clean stores and guaranteeing fresh food. But the efforts proved too little and by 2005, the chain was officially up for sale. An agreement was reached to sell most of the chain to Spartan Stores. [http://www.aptea.com/pr_051005a.asp] However, Spartan backed out of the deal and, combined with a wage concession from its unionized workers, a decision was made not to sell Farmer Jack. [http://prnewswire.com/cgi-bin/stories.pl?ACCT=SPISUP.story&STORY=/www/story/05-05-2006/0004355390&EDATE=FRI+May+05+2006,+09:28+AM]

By late 2006, A&P was reporting that Farmer Jack was breaking even and sometimes recording a small profit.

Liquidation

In April 2007, A&P announced its decision to focus on its core Northeast Division; Farmer Jack was one of the chains put up for sale. [http://www.detnews.com/apps/pbcs.dll/article?AID=/20070424/UPDATE/704240443/1003] In June, A&P announced that Farmer Jack would cease to exist as of July 7, 2007; the last remaining stores were shut down on that date. The demise of Farmer Jack left the city of Detroit without a major grocery store chain operating within its limits.

Kroger acquired twenty former locations while independent grocers collectively bought 21. In an October 2007 SEC filing A&P revealed that it received approximately $110 million for 41 former Farmer Jack sites, and that two warehouses and 25 stores remained on the market. [http://www.sec.gov/Archives/edgar/data/43300/000004330007000055/0000043300-07-000055.txt] [http://www.aptea.com/real_estate_search.asp?action=search&state=MI&property=5]

Marketing

Farmer Jack may best remembered in metro Detroit for its "It's Always Savings Time" jingle, which was used in the 1990s and again in the mid-2000s.

External links

* [http://www.aptea.com A&P]
* [http://www.detnews.com/2005/business/0505/11/A01-178385.htm Detroit News article on Farmer Jack.]