Comeback at National

When Millionaire Printer John F. Cuneo bought control of Chicago's ailing National Tea Co. in 1945, he grumbled that he was taking on "the worst chain-store property in the country." From Harley V. (for Vincent) McNamara, who had talked him into the deal, came a soothing answer: "That's what's so good about it--it can't get any worse." As National's new president. Optimist McNamara soon proved that it could get a lot better.

During his first full year at National Tea (which operates under the name National Food Stores), McNamara boosted sales from $107 million to $158 million, profits from $913,000 to $2,900,000. In 1953 he squeezed out First National to make National Tea the nation's fifth largest supermarket chain. Last year, when sales reached $520 million, profits $6,500,000, the company became the tenth largest of all retailers.

Last week, having already expanded National's operations from seven to eleven states (Illinois, Indiana, Iowa, Louisiana, Michigan, Minnesota, Mississippi, Missouri, North and South Dakota, Wisconsin), McNamara was busy invading a twelfth; construction of three new supermarkets in Toledo will be completed next year. With sales running 10% ahead of last year. McNamara predicted a 1955 gross of $575 million. His next objective: sales of $1 billion.

Grade-School Tycoon. A hearty, glad-handing man of 61, McNamara is one of eight children of a St. Louis bricklayer. He began his business career at nine, outside Sportsman's Park, selling newspapers and score cards. He quit school at twelve, drove a team of horses for a local grocer for $4 a week and, at 21, failed at running his own grocery. In 1917 he took a job in a St. Louis store of the Kroger chain, eventually became chief trouble-shooter for the whole chain (3,174 stores). He quit to join National Tea because Kroger rejected his ideas for extensive reorganization on the grounds that the company was already doing well. Says McNamara: "Hell, the time to make changes is when you are doing all right--not when you're in trouble. That way you can call them improvements."

At National, McNamara found trouble everywhere. After the death in 1936 of George S. Rasmussen, its Danish immigrant founder (in 1899), the company went into the red. Finally, John McKinlay, a former president of Marshall Field & Co., got control. Under him, the chain stayed in the red till 1940, when the war put it into the black. McNamara found the chain burdened by paper work and centralized control that failed to respond to local needs. McNamara set up nine semiautonomous branches, whose managers do their own buying, advertising and pricing. He bought out nine competing companies (358 stores), closed up white-elephant outlets, built new ones in new neighborhoods. Result: National today has fewer stores (738 v. 880 in 1945) but it has boosted volume per store by 500%.

TV Fun. At the same time, McNamara raised the chain's advertising budget tenfold, to $5,500,000 last year, including 5,560,000 lines in 25 major metropolitan newspapers, where National had 2,000,000 lines more than any other single company. He has cut markups from an average of 25% to 15%, brightened his stores with new color schemes, electric-eye doors, air conditioning and new packaging techniques, especially for meat. He has achieved almost complete self-service (for an average of 5,000 items) in many of his stores, and hopes soon to make it 100% everywhere.

To keep in touch, McNamara spends a third of his time traveling, but he is no slave to the job, which pays well over $100,000. At Chicago he works an 8 a.m. to 4 p.m. day, spends his evenings as often as possible with a can of beer in front of a television set. Says he: "You can't try to do it all yourself. You've got to get a laugh out of life."

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