Impacts of "the European War" in the USA
As soon as the Woolworths arrrived in Paris it was clear that they had made a mistake. Armed men were being drilled in the streets. All the talk was of war. Would Kaiser Wilhelm invade Belgium or would the Belgians accede to his demands? How safe would the French Republic be if Belgium fell?
In the days that followed Frank Woolworth wrote to his executives in New York each day. His letters reveal the speed of the German advance. The invaders quickly seized control of a large swathe of Europe, leaving Frank with no way back home. Frantic steps were required to secure a safe passage out of France. Woolworth describes a white-knuckle ride across Switzerland to the UK, as he and Jennie dashed for a transatlantic liner to carry them home.
Although the Germans stopped short of hand-to-hand combat in Paris, hotels and public buildings were converted into makeshift hospitals, with wounded soldiers everywhere. As the Woolworths made their way to Switzerland, using papers hastily arranged by Executive Office in New York, and more than a few francs to smooth the wheels, they found the destruction awesome.
Buildings had been destroyed, large swathes of countryside were ravaged, while the roads were filled with migrants fleeing the fighting, dragging their worldly goods in handcarts. German soldiers seemed to be everywhere. Frank had picked up a smattering of French and German, and told officials that he was an American and that he had big factories in Germany and France and that the 5 and 10 was well known as a wealth-generator and a good payer.
The Americans did not join the War until 1917. At the outbreak President Woodrow Wilson called the conflict " the 'European War" and told the world that his country would remain neutral, though US firms did supply munitions to Britain and Canada.
As Frank set foot on dry land in New York after the arduous journey, he was moved by how normal everything appeared. The contrast to the dreadful scenes that he had witnessed in Europe was stark. Most Americans only became aware of the horrors across the Atlantic three years later.
The letter extract above appears by kind permission of Mr Fred Peterson of Owl Antiques Ltd., USA.
Back in the USA, Frank had a much larger challenge. Almost a quarter of his range was European made. Thie imports generated nearly half of the chain's profits. Within days the war halted the supply. The U-boat threat kept the Atlantic corridor closed for the next four years.
This deprived Woolworth stores of their highest margin and most fashionable goods and endangered their principal point of difference compared to their rivals. Woolworth knew that he faced a battle for survival and focused all his effort on working around the issue.
Woolworth sent a barage of letters to the British Admirality. At the time the UK continued to import a variety of manufactured items from the USA to support the war effort. He reasoned that on the return journey the vessels were empty and could backhaul British goods to the Five-and-Ten. The First Lord of the Admiralty, a certain Winston Churchill who was later to become one of the most famous men of the twentieth century, retorted that most of the vessels were carrying emigrants to the land of the free.
Woolworth offered to source munitions to reduce costs if the First Sea Lord could make an exception. Churchill pointed out that the more heavily laden the ship, the less manoeuvreable and the more vulnerable it would be to U-boat attack. Despite the bravado, all of the goods that Woolworth had already paid for were loaded onto ships and sent to New York. All landed safely, but were 'the last of the line'.
America finally joined the Allies in April 1917. They had been spurred into action by the Zimmerman telegram, which appeared to confirm rumours that Germany was planning an alliance with Mexico. America's participation proved decisive and helped to bring the long conflict to a close.
Frank Woolworth's second tactic helped to cement his reputation as one of the world's great entrepreneurs. He made it his mission to help American factories to adopt the principles of mass production that he had seen on his visits to Europe. He even helped suppliers to source raw materials.
It had long been a Woolworth policy to visit suppliers' factories regularly. This allowed the Buyers to look out for any bin-ends of products that they could buy cheaply, and also to discover of their competitors were ordering. But it also helped the firm to gather a deep understanding of how goods were made. They frequently shared the learning with new suppliers to help them improve efficiency and cut manufacturing costs.
The wisdom of the policy shone through during the War.Woolworth and his Buyers toured their indigenous suppliers, encouraging them to take on the manufacture of lines that had previously been made in Europe. Armed with samples from their stock cupboards and their experience from the visits, they sat with the suppliers' engineers to design and make the machines necessary to replicate the products. Within twelve months they had found new sources for virtually all the European ranges. The best sellers were:
As stocks ran out in other American stores, and scarcity drove prices up elsewhere, Frank Woolworth stockpiled his new range of cottons and haberdashery, without putting it on sale. Behind the scenes he planned a huge marketing campaign. He chose a date for the product launch and had every one his nine hundred American stores set up window displays and new counters in a single night. Customers awoke to wall-to-wall press advertisements in and spectacular displays at Woolworth's. Every price had been maintained or reduced compared with 1914. Customers flocked to the stores, abandonning rival five-and-tens and pushing F. W. Woolworth Co. profits to a record high. Without the cost of shipping across the Atlantic, the chain made a cent more on every item that they sold.
Frank Woolworth's mass-marketing expertise came to the attention of the US President, Woodrow Wilson. When America joined the conflict he invited the Five-and-Ten magnate to join his War Cabinet, and to use his skills to raise funds for the war effort. Woolworth had been working on an autobiography with the publicist Bennett Chappell. They immediately dropped the project to answer the nation's call. Working together the two men developed a savings stamp-based war bond scheme, coining the slogan "a stamp a day for the man who's away". Woolworth persuaded his nemesis and arch-rival Sebastian S. Kresge to join him in setting up booths in-store to sell the stamps. The idea was such a hit that it was later resurrected in World War II.
After the Armistice on 11 November 1918 Woolworth instructed that each of his stores was to fly flags and hang bunting. The decorations must stay in place until every surviving local soldier had returned home. He also paid for victory parades in many towns served by a Five-and-Ten.
America's entry to the war had proved decisive. Woodrow Wilson's decision to remain neutral until 1917 meant that most servicemen did indeed return home, having avoided the stalemate of trench warfare. The far-away War led to shortages in the USA but disruption to everyday life was quite limited.
Frank Woolworth had proved himself a 'real live Yankee'. He had fought his battle on a different field. His victory had helped to establish the foundations for economic prosperity, as the USA embraced the principles of mass-production.
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