In the early days of retailing, all products generally were fetched by an assistant from shelves behind the merchant's counter while customers waited in front of the counter and indicated the items they wanted. Also, most foods and merchandise did not come in individually wrapped consumer-sized packages, so an assistant had to measure out and wrap the precise amount desired by the consumer. This also offered opportunities for social interaction: many regarded this style of shopping as "a social occasion" and would often "pause for conversations with the staff or other customers." These practices were by nature very labor-intensive and therefore also quite expensive. The shopping process was slow, as the number of customers who could be attended to at one time was limited by the number of staff employed in the store.
The concept of a self-service grocery store was developed by entrepreneur Clarence Saunders and his Piggly Wiggly stores. His first store opened in 1916. Saunders was awarded a number of patents for the ideas he incorporated into his stores. The stores were a financial success and Saunders began to offer franchises. The Great Atlantic and Pacific Tea Company (A&P) was another successful early grocery store chain in Canada and the United States, and became common in North American cities in the 1920s. The general trend in retail since then has been to stock shelves at night so that customers, the following day, can obtain their own goods and bring them to the front of the store to pay for them. Although there is a higher risk of shoplifting, the costs of appropriate security measures ideally will be outweighed by reduced labor costs.
Early self-service grocery stores did not sell fresh meats or produce. Combination stores that sold perishable items were developed in the 1920s.
Historically, there was debate about the origin of the supermarket, with King Kullen and Ralph's of California having strong claims. Other contenders included Weingarten's Big Food Markets and Henke & Pillot. To end the debate, the Food Marketing Institute in conjunction with the Smithsonian Institution and with funding from H.J. Heinz, researched the issue. It defined the attributes of a supermarket as "self-service, separate product departments, discount pricing, marketing and volume selling."
It has been determined that the first true supermarket in the United States was opened by a former Kroger employee, Michael J. Cullen, on August 4, 1930, inside a 6,000-square-foot (560 m2) former garage in Jamaica, Queens in New York City. The store, King Kullen, (inspired by the fictional character King Kong), operated under the slogan "Pile it high. Sell it low." At the time of Cullen's death in 1936, there were seventeen King Kullen stores in operation. Although Saunders had brought the world self-service, uniform stores and nationwide marketing, Cullen built on this idea by adding separate food departments, selling large volumes of food at discount prices and adding a parking lot.
Other established American grocery chains in the 1930s, such as Kroger and Safeway at first resisted Cullen's idea, but eventually were forced to build their own supermarkets as the economy sank into the Great Depression, while consumers were becoming price-sensitive at a level never experienced before. Kroger took the idea one step further and pioneered the first supermarket surrounded on all four sides by a parking lot.
Supermarkets proliferated across Canada and the United States with the growth of automobile ownership and suburban development after World War II. Most North American supermarkets are located in suburban strip shopping centers as an anchor store along with other smaller retailers. They are generally regional rather than national in their company branding. Kroger is perhaps the most nationally oriented supermarket chain in the United States but it has preserved most of its regional brands, including Ralphs, City Market, King Soopers, Fry's, Smith's, and QFC.
In Canada, the largest such chain is Loblaw, which operates stores under a variety of regional names, including Fortinos, Zehrs and the largest, Loblaws, (named after the company itself). Sobeys is Canada's second largest supermarket with locations across the country, operating under many banners (Sobeys IGA in Quebec). Québec's first supermarket opened in 1934 in Montréal, under the banner Steinberg's.
In the United Kingdom, self-service shopping took longer to become established. Even 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 ten times as much per week as the average British general store of the time. Other chains caught on, and after Galvani lost out to Tesco's Jack Cohen in 1960 to buy the 212 Irwin's chain, the sector underwent a large amount of consolidation, resulting in 'the big four' dominant UK retailers of today: Tesco, Asda (owned by Wal-Mart), Sainsbury's and Morrisons.
In the 1950s, supermarkets frequently issued trading stamps as incentives to customers. Today, most chains issue store-specific "membership cards," "club cards," or "loyalty cards". These typically enable the card holder to receive special members-only discounts on certain items when the credit card-like device is scanned at check-out.. Sales of selected data generated by clubcards is becoming a significant revenue stream for some supermarkets.
Traditional supermarkets in many countries face intense competition from discount retailers such as Wal-Mart, Tesco in the UK, and Zellers in Canada, which typically are non-union and operate 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. The proliferation of such warehouse and superstores has contributed to the continuing disappearance of smaller, local grocery stores; increased dependence on the automobile; suburban sprawl because of the necessity for large floorspace and increased vehicular traffic. 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 multinational retailers have with suppliers around the world.
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