Super-Markets

At No. 8200 South Chicago Avenue, ten miles from Chicago's swank Loop shopping district, stands a big, three-story brick building that used to be a bag factory. Today it houses a typical supermarket, Depression's great contribution to U. S. retailing. This supermarket, Trading Post, Inc., was founded in 1934 by Roy O. Dawson with the backing of the Bristol brothers, Lee, Henry and William (of Bristol-Myers ).

Originally known as Dawson's Trading Post, the supermarket developed a $2,500,000 annual business but brought no returns to the Brothers Bristol. Founder Dawson was ousted last year, some $800 was spent obliterating his name from the market, and a young merchandising expert from Marshall Field & Co. named Harper Sowles was installed as president.

In the opinion of President Sowles, Trading Post was sound so far as it went; trouble was, it did not go far enough. It was selling $1,500,000 worth of groceries a year, mostly canned goods, and concessionaires were selling another $1,000,000 worth of fruits, vegetables, refrigerators, tobacco, liquor, house furnishings, men's wear. What the supermarket needed, said President Sowles. was a women's apparel department. Last week in one section of the supermarket blossomed "Fashion Avenue." a row of five separate shops which are expected to develop a $500,000 annual volume. The shop windows have no glass, so that customers can grab what they want.

Primarily a grocery store like all supermarkets. Trading Post makes only one appeal: price. It undersells even chain stores 8% to 10%. Located in the centre of a 500,000 laboring and white-collar population, it often attracts a Saturday crowd of 10,000 avid bargain-hunters. Six neighboring lots provide free parking for 1,000 cars. In the last two and a half years two people have been killed, 19 injured in the traffic snarls that the supermarket generates.

Handed baskets as they enter the building, customers help themselves, carry the goods to a row of counters where clerks tally the purchases, take in the money. Then the baskets are placed on conveyor belts, which carry them to the entrance. There the goods are sacked, carried to the customers' cars by red-capped attendants --Trading Post's only concession to service. President Sowles's "Fashion Avenue'' is strategically located in the area between the cash registers and the entrance, so that the customers have to stroll by the five little shops to get out--change in their pockets and their hands freed of previous purchases by the conveyor belt.

As in other supermarkets, little money is wasted on fixtures and decorations. Operating with a high turnover, Trading Post is supplied by Western Grocer, an Iowa wholesaler with Chicago offices and warehouse on the third floor of the Trading Post building. Whenever stocks get low, a telephone call will bring fresh goods tumbling down within three minutes.

No other retailers can compete on a price basis with the modern supermarkets. Usually located far from shopping centres, they pay low rents, offer virtually no service, need little working capital. The Bristols invested nearly $100,000 in Trading Post. But Big Bear, the supermarket now occupying the old Elizabeth, N. J. automobile plant of that onetime stockmarket bull, William Crapo Durant (TIME, Sept. 28), was started with $10,000 capital, only $1,000 of which was paid in. During its first year Big Bear sold more than $2,000,000 worth of groceries, took in $86,000 from concessions, showed a net profit of $166,500.

Supermarkets first appeared ten years ago around Los Angeles, where anything with a super flavor is likely to appeal.* However, the true super-colossal market originated with the late Michael Cullen, an oldtime chain-store man who opened up in a vacant garage at Flushing, Long Island in 1930 under the name "King Kullen, the Price Wrecker." Before he worked himself to death at 52 a year ago. King Kullen had built up a chain of 17 supermarkets around New York City doing a $6,000,000 annual business.

Apparently King Kullen and the host of other super-marketers who sprang up at the same time stumbled on a fundamental U. S. need. Only two years ago the entire U. S. had only 94 supermarkets. Today there are more than 1,500, many attracting as much trade as 100 ordinary stores. Ignoring all the trappings which modern merchandising had supposedly taught the U. S. public to demand--service, convenience, creature comfort, trained sales help, scientific display--the supermarket has mushroomed into a major form of U. S. distribution. Chain stores and independents both regard it as a menace and have combined for once in efforts to combat it. When the Big Bear market in New Jersey started to draw customers from as much as 50 miles away, New Jersey merchants turned the heat on local publishers, got them to refuse Big Bear advertising. Big Bear suppliers were blacklisted. The New Jersey Legislature was cudgeled until it voted a supermarket investigation. But Big Bear continued to prosper just as other supermarkets have prospered despite attack.

Writing in Nation's Business, M. M. Zimmerman and F. R. Grant, merchandising counsels, lately explained the rise of the supermarket not as a new phenomenon but the revival of the oldest form of U. S. distribution--the trading post and the general store. As of old, a trip to the new supermarket is something of an outing, for the customers, often living miles away, have to plan it in advance, sometimes go with friends or the whole family, often stock up with staples for weeks or months. The parking lot offers the convenience of an oldtime hitching post, and is something which most stores, with all their emphasis on service, do not offer.

* Opened last week in suburban Los Angeles was a ''drive-in" branch of the city's Security-First National Hank. Customers may drive into the big U-shaped branch, park off the lobby or, if in a hurry, drive up to one of the bullet-proof "drive-in" wickets, where deposits can be made or checks cashed without getting out of the car.

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