including credit, delivery, a on a much larger scale than The next major devel nificant social trend, w came into the picture in the Ward & Co. and Sears, Roe rural segments of the popul quately fulfilled by the limite in local communities. Specta with the inauguration of rur as a class began to subscribe news and offerings in large cit items listed in mail order cata The rise of mail-order o ular growth of chainstor second part of the 19th cen was founded in 1858, The period of chainstore devel Numerous astute merchants the needs of a price-conscious dures in a number of locations, and effecting some distribution retailing activities and partly b The relatively pros for rapid expansion. In 1919 percent of the total retail sales f to about 30 percent." consumer. In order to defend themse so-called "voluntary chains Some of these were started initiated by wholesalers who d customers, designed to imitate t of the chainstores. While most been voluntary chains in the auto of business.10 The depression of the thir of the supermarket. The first stores of this type fe definitely in keeping with the pre consumer purchasing at that time pendents, the corporate chains in have been replacing numerous s numbers of large supermarkets e result of price appeal, large assort brands, and the consumer's appa without interference or aid from supermarket is an institution of t chandising techniques have had a p The success of self-service mercha automotive accessory, hardware, a upon customer selection of merchan stores."1 The period following World characteristic to retailing: the r • Ibid., p. 10. Ibid., p. 11. Ibid., p. 11. SECTION II THE STRUCTURE OF RETAIL TRADE I. HISTORICAL DEVELOPMENT The social history of this country could be written in terms of the development and structure of retail trade. In the United States, one of the earliest institutions was the fur-trading post, at which furs were exchanged for manufactured goods imported from abroad. As population increased and more products became available in various areas, trading posts were largely superseded by general stores. Grocery products constituted the principal line handled in such stores, but they sold a wide range of items, such as clothing, shoes, hardware merchandise, some farm supplies, notions, drugs and medicines, and miscellaneous drygoods. They flourished in an era when transportation was not well developed and in areas where the number of customers was distinctly limited. The ability to supply all kinds of goods to a consuming group that had to purchase most things close to home was the principal appeal of such stores.1 11 3 Single stores are a later development. Communities had to grow to a "size sufficient to support a number of retail establishments" 2 and a greater variety of manufactured goods had to become available. Single stores "carried lines of merchandise that were related in sale or use. Grocery, hardware, clothing, and drugstores are examples.' With further increase in the variety of goods available, in city size, and better transportation facilities to bring in goods from distant areas, specialization in merchandise continued. Specialty stores, whose principal appeal was a large assortment of only a few basic types of items, came into the picture. Illustrative are those dealing only in men's shoes, millinery, dresses, and luggage and leather goods. In contrast with the single-line stores that carried a larger variety of merchandise, specialty stores had advantages with respect to the range of their assortments, specialized product knowledge by better-trained salespeople, buying skill, and, often, better locations in the well-developed shipping districts of cities. Single-line stores, on the other hand, had the ability to operate in locations closer to consumers and were thus able to cater to neighborhood trade. Their average sale was larger because of the greater number of items that could be purchased by the consumer. Thus both types of stores were able to grow and develop simultaneously. The next major development in retailing occurred mainly during the years of rapid industrial growth following the Civil War. As many single-line and specialty stores expanded and added new lines of merchandise, the department store came into being. "Such stores could not develop until cities of substantial size existed and until urban transportation had developed to an extent that made it feasible for consumers to visit downtown areas with some frequency."5 (Department stores) have attracted patronage because of the estensive variety of merchandise carried, their exposition-like character, a wide range of services Paul L. Brown and William R. Davidson, Retailing, Principles and Practices, New York, 1953, pp. 9, 10. 'Ibid., p. 10. Ibid. Ibid, p. 10. From $40 billion in 1929, the physical volume of sales declined sharply during the depression to a low of about $28 billion in 1933. From then on, the physical volume of sales had a tendency to increase constantly with the following exceptions: a decline during the brief recession of 1938, a decline during 1942 as a result of wartime rationing, etc., and a fall during the recession of 1951. Physical volume of sales per capita show the same general trend and movements. Outstanding in these developments is the strong increase in both physical volume of sales (from $40 billion in 1929 to almost $73 billion in 1951) and physical volume of sales per capita (from $329 in 1929 to $475 in 1951). Retailing thus reflected the growth and expansion of the American economy after the depression of the early thirties had been overcome. 14 This interrelationship is even more clearly shown in the following tables and graphs which show the average relationship between sales of retail stores and disposable income. Revised series, beginning 1951-not comparable with earlier data. Source: Standard & Poor's Industry Survey, Retail Trade, Nov. 17, 1955, vol. 123, No. 46, sec. 2, p. R4-2. As disposable income increased from $70 billion in 1939 to $264 billion in 1955, total retail sales increased from $42 billion to $181 billion. The line of average relationship showing the degree of correlation between these series is shown in graph 1A. Standard & Poor's Industry Survey comments on these data as follows: Retail activity conforms closely to variations in consumer-buying power and in general business activity. Basically, retail sales reflect changes in disposable personal income-the amount available for spending after taxes. Volume is also importantly influenced by relative consumer preference to save rather than to spend current income, as well as willingness to borrow on future income, which in turn is influenced by such factors as the employment and wage outlook, price trends, and availability of goods.14 Graph IB shows the line of average relationship for chainstore sales and disposable income. As the accompanying data show, chainstore sales are largely determined by the overall economic develop ment. 14 Physical volume of sales per capita, however, also indicated a small decline in 1947, a year when the overall physical volume increased slightly. 14 See Standard & Poor's Industry Surveys, Retail Trade, November 17, 1955, vol. 123, No. 46, sec. 2 p. R. 4-2. |