Supermarket: the story on HearLore

Supermarket

On the 4th of August 1930, a former Kroger employee named Michael J. Cullen opened a store in a former garage in Jamaica, Queens, New York City, that would fundamentally alter how humanity eats. This establishment, named King Kullen, was not merely a larger grocery store; it was the first true supermarket, defined by self-service, separate product departments, discount pricing, and volume selling. Cullen operated under the logic of 'pile it high and sell it cheap,' a strategy that turned the traditional grocery model on its head. The store layout was designed by Joseph Unger, who originated the concept of customers using baskets to collect groceries before checking out at a counter. Everything displayed for sale in the store had prices clearly marked, meaning consumers would no longer need to haggle over prices. Cullen described his store as 'the world's greatest price wrecker,' and at the time of his death in 1936, there were seventeen King Kullen stores in operation. The store offered a parking lot, a convenience that had never been seen before, and combined so many different departments under one roof which had formerly required trips to separate stores. Early supermarkets like King Kullen were called 'cheapy markets' by industry experts at the time because they were literally so cheap, thanks to their rock-bottom prices; this was soon replaced by the less derogatory and more positive phrase 'super market'. The compound phrase was then closed up to become the modern term 'supermarket'.The transition from traditional grocery stores to supermarkets was not a smooth evolution but a brutal economic shift that destroyed thousands of livelihoods. For the Great Atlantic & Pacific Tea Company, known as A&P, the conversion from traditional grocery stores to supermarkets came as a terrible shock for the thousands of retail employees whose lives and careers were changed forever. The armies of retail clerks who were the public face of the traditionally slow and social retail experience were replaced with the tedious, specialized jobs necessary to operate a modern supermarket. Stock clerks, usually male, moved boxes and kept the shelves full of goods, while checkout clerks, usually female, were faced with never-ending lines of impatient shoppers eager to check out and go. A&P had no choice but to plunge ahead into this strange new world. One of King Kullen's earliest imitators, Big Bear, opened its first supermarket in 1933 in New Jersey and collected more revenue in one year than over a hundred A&P stores. By 1937, 44 percent of A&P stores were losing money. By 1938, A&P had already opened over 1,100 supermarkets. By February 1940, A&P had closed 5,950 grocery stores and cut its percentage of money-losing stores to 18 percent. There was no way to escape the cold, hard numbers driving this brutal process: in A&P's traditional grocery stores, wages and overhead expenses had consumed 18 percent of sales, while in A&P's newly opened supermarkets in those same neighborhoods, those same numbers were less than 12 percent of sales. Once the large chains joined the supermarket trend, the new retail format exploded across the country like a wildfire. The number of American supermarkets almost tripled from 1,200 in 32 states in 1936 to over 3,000 in 47 states in 1937. It was well over 15,000 by 1950. One sign of the supermarket format's success in slashing labor costs, overhead, and food prices was that the percentage of disposable income spent by American consumers on food plunged from 21 percent in 1930 to 16 percent in 1940. The modern era of cheap food had begun.

Common questions

When did Michael J. Cullen open the first supermarket named King Kullen?

Michael J. Cullen opened the first supermarket named King Kullen on the 4th of August 1930 in a former garage in Jamaica, Queens, New York City. This establishment was defined by self-service, separate product departments, discount pricing, and volume selling.

How did the transition to supermarkets affect the Great Atlantic and Pacific Tea Company known as A&P?

The transition to supermarkets caused a brutal economic shift for the Great Atlantic and Pacific Tea Company known as A&P which destroyed thousands of retail jobs. By 1938 A&P had opened over 1,100 supermarkets and closed 5,950 grocery stores to reduce money-losing operations from 44 percent to 18 percent.

When and where did the first fully stocked supermarket outside the United States appear?

The first fully stocked supermarket outside the United States appeared in Rome, Italy in 1956 as part of an American Way exhibit presented by the U.S. Department of Agriculture. This modest staging included about 2,500 items and was much larger than anything the world had ever seen at that time.

What are the three layout principles used to control consumer behavior in modern supermarkets?

Modern supermarkets use circulation to control traffic flow and place high-draw products in separate areas to draw consumers through the store. They place high impulse and high margin products in predominant areas to grab attention and use power products on both sides of the aisle to create increased product awareness.

How many supermarkets existed in the United States by 1937 and how many were there by 1950?

The number of American supermarkets tripled from 1,200 in 32 states in 1936 to over 3,000 in 47 states in 1937. The total count reached well over 15,000 by 1950 as the format exploded across the country.

Which online-only supermarket was the first successful one and what technology does it use?

The British online supermarket Ocado was the first successful online-only supermarket and it uses a high degree of automation in its warehouses. This technology allows Ocado to expand into providing services to other supermarket firms such as Waitrose and Morrisons.

The Cold War Grocery

By the 1950s, supermarkets had become part of the everyday lives of American consumers, but were still extremely rare outside of the United States. That began to change after 1956, when the U.S. Department of Agriculture presented an American Way exhibit at the International Food Congress in Rome, Italy. The exhibit included the first fully stocked supermarket outside of the United States. The exhibit was a rather modest staging with only about 2,500 items, not a truly comprehensive duplicate of a typical full-size U.S. supermarket, and yet it was much larger than anything the world had ever seen. Just like the American consumers who had entered the first supermarkets two decades earlier, conference attendees, local Italian visitors, and the international news media were all astonished, bewildered, and stunned by the mountains of food. In 1957, the U.S. Department of Commerce and the National Association of Food Chains orchestrated an even grander presentation, Supermarket USA, at the Zagreb International Trade Fair in what was then part of Yugoslavia. Supermarket USA featured 4,000 consumer items in a 10,000 square-foot exhibit, the first fully operational American-style supermarket in a communist country. The American Way supermercato the year before and Supermarket USA were among the first of several instances in which American supermarkets were deployed internationally at the height of the Cold War as shock and awe instruments of American propaganda to demonstrate the supposed superiority of Western Bloc capitalism over Eastern Bloc communism. Before then, a few countries had already begun to implement supermarkets due to their proximity to or affinity for the United States. Canada, to the north, had implemented the new retail format at the same time during the 1930s. For example, Quebec's first supermarket opened in 1934 in Montreal, under the banner Steinberg's. In the United Kingdom, self-service shopping took longer to become established, despite its Special Relationship with the United States. In 1947, there were just ten self-service shops in the country. In 1951, ex-US Navy sailor Patrick Galvani, son-in-law of Express Dairies chairman, made a pitch to the board to open a chain of supermarkets across the country. The UK's first supermarket under the new Premier Supermarkets brand opened in Streatham, South London, taking in ten times as much revenue per week as the average British general store of the time.

The Psychology Of Aisles

While branding and store advertising will differ from company to company, the layout of a supermarket remains virtually unchanged. Every aspect of the store is mapped out and attention is paid to color, wording and surface texture. The overall layout of a supermarket is a visual merchandising project that plays a major role. Stores can creatively use a layout to alter customers' perceptions of the atmosphere. Alternatively, they can enhance the store's atmospherics through visual communications, lighting, colors, and scents. For example, to give a sense of the supermarket being healthy, fresh produce is deliberately located at the front of the store. In terms of bakery items, supermarkets usually dedicate 30 to 40 feet of store space to the bread aisle. Supermarkets are designed to give each product section a sense of individual difference and this is evident in the design of what is called the anchor departments; fresh produce, dairy, delicatessen, meat and the bakery. Each section has different floor coverings, style, lighting and sometimes even individual services counters to allow shoppers to feel as if there are a number of markets within this one supermarket. Marketers use well-researched techniques to try to control purchasing behavior. The layout of a supermarket is considered by some to consist of a few rules of thumb and three layout principles. The high-draw products are placed in separate areas of the store to keep drawing the consumer through the store. High impulse and high margin products are placed in the most predominant areas to grab attention. Power products are placed on both sides of the aisle to create increased product awareness, and end caps are used to receive a high exposure of a certain product whether on special, promotion or in a campaign, or a new line. The first principle of the layout is circulation. Circulation is created by arranging product so the supermarket can control the traffic flow of the consumer. Along with this path, there will be high-draw, high-impulse items that will influence the consumer to make purchases which they did not originally intend. Service areas such as restrooms are placed in a location which draws the consumer past certain products to create extra buys. Necessity items such as bread and milk are found at the rear of the store to increase the start of circulation. Cashiers' desks are placed in a position to promote circulation. In most supermarkets, the entrance will be on the right-hand side because some research suggests that consumers who travel in a counter-clockwise direction spend more. However, other researchers have argued that consumers moving in a clockwise direction can form better mental maps of the store leading to higher sales in turn.

The Global Food Machine

Beginning in the 1990s, the food sector in developing countries has rapidly transformed, particularly in Latin America, South-East Asia, India, China and South Africa. With growth, has come considerable competition and some amount of consolidation. The growth has been driven by increasing affluence and the rise of a middle class; the entry of women into the workforce; with a consequent incentive to seek out easy-to-prepare foods; the growth in the use of refrigerators, making it possible to shop weekly instead of daily; and the growth in car ownership, facilitating journeys to distant stores and purchases of large quantities of goods. The opportunities presented by this potential have encouraged several European companies to invest in these markets and American companies to invest in Latin America and China. Local companies also entered the market. Initial development of supermarkets has now been followed by hypermarket growth. In addition there were investments by companies such as Makro and Metro Cash and Carry in large-scale Cash-and-Carry operations. While the growth in sales of processed foods in these countries has been much more rapid than the growth in fresh food sales, the imperative nature of supermarkets to achieve economies of scale in purchasing means that the expansion of supermarkets in these countries has important repercussions for small farmers, particularly those growing perishable crops. New supply chains have developed involving cluster formation; development of specialized wholesalers; leading farmers organizing supply, and farmer associations or cooperatives. In some cases supermarkets have organized their own procurement from small farmers; in others wholesale markets have adapted to meet supermarket needs. In the 21st century, traditional supermarkets in many countries face intense competition from discounters such as Wal-Mart, Aldi and Lidl, which typically is non-union and operates with better buying power. Other competition exists from warehouse clubs such as Costco that offer savings to customers buying in bulk quantities. Superstores, such as those operated by Wal-Mart and Asda, often offer a wide range of goods and services in addition to foods. In Australia, Aldi, Woolworths and Coles are the major players running the industry with fierce competition among all the three. The rising market share of Aldi has forced the other two to cut prices and increase their private label product ranges. The proliferation of such warehouse and superstores has contributed to the continuing disappearance of smaller, local grocery stores, the increased dependence on the automobile, and suburban sprawl because of the necessity for large floor space and increased vehicular traffic. For example, in 2009 51% of Wal-Mart's $251 billion domestic sales were recorded from grocery goods.

The Dark Side Of Abundance

The large scale of supermarkets, while often improving cost and efficiency for customers, can place significant economic pressure on suppliers and smaller shopkeepers. Supermarkets often generate considerable food waste, although modern technologies such as biomethanation units may be able to process the waste into an economical source of energy. Also, purchases tracking may help as supermarkets then become better able to size their stock of perishable goods, reducing food spoilage. In 1997, the Reverend John Papworth attracted international attention with his criticism of giant supermarkets. For him, they are places of evil and temptation, destroyers of local communities, and shoplifting in them would be illegal but not sinful. A report published by the international organization ActionAid in 2007, Who pays? estimated that 32 million people shopped in British supermarkets every week, there were approximately 38,000 supermarkets in the supermarket's birthplace, the United States; Americans spent $701 billion at supermarkets that year; and the American supermarket stood at the pinnacle of a food production and distribution system so efficient that less than three percent of the U.S. population produced more than enough food to feed everyone. The average American adult will spend 2 percent of their life inside supermarkets. Some critics consider the chains' common practice of selling loss leaders to be anti-competitive. They are also wary of the negotiating power that large, often multinationals have with suppliers around the world. Some supermarkets are focusing on selling more or even exclusively organically certified produce. Others are trying to differentiate themselves by selling fewer or no products containing palm oil. This as the demand of palm oil is a main driver for the destruction of rainforests. As a response to the growing concern on the heavy use of petroleum-based plastics for food packaging, so-called zero waste and plastic-free supermarkets and groceries are on the rise.

The Digital Aisle

During the dot-com boom, Webvan, an online-only supermarket, was formed and went bankrupt after three years and was acquired by Amazon. The British online supermarket Ocado, which uses a high degree of automation in its warehouses, was the first successful online-only supermarket. Ocado expanded into providing services to other supermarket firms such as Waitrose and Morrisons. Grocery stores such as Walmart employ food delivery services offered by third parties such as DoorDash. Other online food delivery services, such as Deliveroo in the United Kingdom, have begun to pay specific attention to supermarket delivery. Delivery robots are offered by various companies partnering with supermarkets. Micro-fulfillment centers are relatively small warehouses with sophisticated automated rack-and-tote systems which prepare orders for pickup and delivery. Once the order is complete, the customer will pick it up or have it fulfilled via home delivery. Supermarkets are investing in micro-fulfillment centers with the hope that automation can help reduce the costs of online commerce and e-commerce by shortening the distances from store to home and speeding up deliveries. MFCs are said by many to be the key to profitably fulfilling online orders. In the 21st century, traditional supermarkets in many countries face intense competition from discounters such as Wal-Mart, Aldi and Lidl, which typically is non-union and operates with better buying power. Other competition exists from warehouse clubs such as Costco that offer savings to customers buying in bulk quantities. Superstores, such as those operated by Wal-Mart and Asda, often offer a wide range of goods and services in addition to foods. In Australia, Aldi, Woolworths and Coles are the major players running the industry with fierce competition among all the three. The rising market share of Aldi has forced the other two to cut prices and increase their private label product ranges. The proliferation of such warehouse and superstores has contributed to the continuing disappearance of smaller, local grocery stores, the increased dependence on the automobile, and suburban sprawl because of the necessity for large floor space and increased vehicular traffic. For example, in 2009 51% of Wal-Mart's $251 billion domestic sales were recorded from grocery goods.