The Birth of the Supermarket

__"Supermarket Sweep" by David B. Sicilia, in Audacity (Spring 1997), 60 Fifth Ave., New York, N.Y. 10011.__

In late 1929, as the U.S. economy began its slide into the depression, Michael Cullen, a 45-year-old food merchandiser for Cincinnati’s Kroger Grocery & Baking Company, made a bold proposal to his employer: open five grocery stores of a radically new sort. "Monstrous" in size and located away from downtown high-rent districts, with plenty of free parking, they would offer low prices to attract shoppers in droves while keeping costs down through direct buying, self-service, and high volume. Kroger said no—and thus missed being in on the birth of the supermarket.

"Cullen went ahead on his own, opening an independent store in [the Queens borough of New York City] in August 1930. He called it King Kullen, and on its giant sign he proclaimed himself the ‘World’s Greatest Price Wrecker,’" writes Sicilia, a historian at the University of Maryland at College Park. Chains such as A&P had already overtaken the traditional "mom and pop" grocery stores, but aside from their somewhat lower prices and standardized operations, the chain stores did not differ very much from the independents. Cullen revolutionized the industry by borrowing techniques such as self-service from earlier mass retailers. He sold only national brands, thus saving ad dollars. He owned and operated all the departments except meat, produce, and liquors, which were run on a concession basis. "The goods were piled high, the atmosphere was homey, and the fixtures were crude—all of which suggested to customers that they had found bargain heaven," Sicilia writes.

Within two years, Cullen had eight stores, total revenues of more than $6 million a year—and imitators. On an initial investment of $10,000 (only a tenth of it in cash), the founders of the Big Bear chain began in 1932 with a store in Hoboken, New Jersey, and earned a net profit nearly 17 times as large in the first year. Their net rate of return on sales, however, was paperthin, only .04 percent. Later, the industry average would be between one-half and two percent—still "much lower than in any previous form of retailing," Sicilia notes. "With supermarkets, customers were saving as never before." But they bought more, too. Self-service, it turned out, encouraged impulse buying, and shoppers arriving in cars could carry home much more food than those coming on foot.

Supermarkets spread throughout the country, with 300 in existence by 1935, and nearly 1,200 by 1936. A&P, the leading food chain, finally joined the supermarket revolution, followed by other chains.

After World War II, the supermarket underwent some changes. Flush with earnings, owners dispensed with concessions, which had been useful in lowering start-up costs. Even more striking, says Sicilia, "the supermarket shed its rough-hewn appearance. . . . In place of the narrow aisles, wooden crates, bare lamps, and sawdust on the floor came wide avenues, gleaming display cases, white tile, and bright lights. Weary of the poverty and deprivation of hard times, the public wanted comfort and convenience." Today’s tony wood-floored "natural" supermarkets are just the latest adaptation in a fiercely competitive industry that lives on nickels and dimes.