Category Archives: Retailing history

The Rise and Fall of the Greek-Australian Milk Bar: American Dreams with an Hellenic Touch

Cinema, Commerce & Business, Inter-ethnic relations, Local history, Memorabilia, Popular Culture, Retailing history, , , , ,

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Anyone who grew up in the golden age of milk bars in Australia, from the 1940s to the 1960s, will have a memory of or an association with these erstwhile hubs of suburban and small town social life…for many of that vintage it’d be hanging out inside with friends, indulging in their favourite flavoured milkshake, ice cream or other sweet tooth delight. My own fond recollection is of salivating over chocolate malt sundaes with nuts and taking turns at playing (or trying to tilt) the pinball machine in the back corner of the shop. This treat was an exhilarating antidote to the aftertaste of having spent the preceding six hours toiling away in school confinement.

B&W 4d Milk Bar with mechanical cow & Red Cross-like symbol

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They were such an integral institution during my salad days that I was under the assumption that milk bars had been around forever. In fact they only surfaced in Australia for the first time in the early years of the Depression. The first bonifidé milk bar is generally considered to be the Black and White 4d. Milk Bar which opened its doors at 24 Martin Place, Sydney, in 1932𝕒, it’s conception was the idea of a Greek migrant to the Antipodes, Joachim Tavlaridis, who had Anglicised his name to Mick Adams. Mick had visited the US and had drew on the American diner/soda parlour concept that was flourishing in the US for his inspiration (including American menus, ice creams and chocolate). The distinguishing feature of the Black and White Milk Bar was its singular purpose, it exclusively sold just sodas and milkshakes (in the iconic silver-coloured metal milkshake cups with actual fruit in the shake). Mick was an early entrepreneur in the field, later adding Wollongong, Adelaide, Melbourne and Brisbane shops to his milk bar “empire”. (‘1932: Australia’s first milk bar’, Australian Food Timeline, www.australianfoodtimeline.com). Mick Adams and other Greek-Australian small businessmen like him were the pioneers of the milk bar trade in Australia…typically the shops operating as open-all-hours family businesses, cf. postwar migrant Italians in the vanguard of delicatessen culture in Australia𝕓.

Golden Star Milk Bar, Perth City, mid-1930s (Photo source: M. Coufos)

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Greek cafes with a large dollop of Hollywood glitz
The Greek owner-operators in Australia added glamour to their milk bars by infusing the decor with an vibrant American feel…gleaming chrome, neon illumination, plush leather chairs, mirrors, curvilinear Art Deco interiors, soda fountain pumps, snazzy uniforms, American jukeboxes. These early Greek milk bars (and cafés)𝕔 were purveyors of American dreams along with confectionery and sugary flavoured chilled beverages. Macquarie University history academic Leonard Janiszewski describes the agency of the early milk bars as “a kind of Trojan horse for the Americanisation of Australian culture” (‘The story of Australia’s Greek cafes and milk bars’, ABC Radio, Conversations (broadcast 02 May 2016). The milk bar caught on like wildfire—by 1937 there were around 4,000 in Australia, with names like “Olympia”, “The Orion” and “The Paragon”—as they did across the Tasman in New Zealand where the milk bar is known as “the Dairy”.

Milk bars passé
By the 1970s the heyday of the Australian milk bar was well and truly past its use-by-date. Faced with an inability to compete with supermarket chains and multinational-owned petrol stations plus high rents, milk bar closures (together with that of the community corner store) became an increasingly common sight. 7-Eleven-style convenience stores started to pop up everywhere across suburbia to fill the void (‘Remembering the Milk Bar, Australia’s Vanishing Neighbourhood Staple’, Matthew Sedacca, Saveur, 18 January 2018, www.saveur.com).

Olympia Milk Bar, Stanmore NSW: tea and milkshakes (Source: Daily Mail Australia)

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One Greek milk bar that did manage to defy the odds and stave off extinction for much longer than most was the Olympia Milk Bar in the inner Sydney suburb of Stanmore. Taken over by the Fotiou brothers in 1959, the Olympia under surviving brother Nick achieved a kind of local iconic status in recent years for its anachronistic novelty…open late, and always dimly lit, ancient chocolate bar wrappers plastered all over, a yesteryear-looking shop locked in a time warp. The Olympia somehow survived to 2018, until the Council decided to close down the dilapidated milk bar because of structural safety issues.

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Postscript: Green plaque fiasco
Attempts since 2017 to commemorate the Black and White Milk Bar as “the world’s first modern milk bar” with a green plaque have met with a roadblock. The plan had been to place the plaque on the original site of the ur-milk bar in Martin Place, Sydney, now the ANZ Tower. The spanner in the works has been the overseas corporate owner of the building who has steadfastly refused to allow the plaque to be mounted on the structure. The matter remains deadlocked with the City of Sydney Council unable to find an alternate, close-by location acceptable to Mr Adams’ relatives (“‘Disrespect’: Frustration grows over plaque for world’s first modern milk bar in Sydney”, Adriana Simos, Greek Herald, 05-Oct-22, www.greekherald.com.au).

Green plaque in limbo!

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𝕒 a staggering 5,000 customers fronted up on the opening day!


𝕓 Mick’s concept of a modern milk bar was later replicated overseas in various places within the Commonwealth and Europe


𝕔 the nouns “café” and “milk bar” seem to be interchangeable in describing these Greek-Australian run establishments

Brickfield Hill: From ‘Brickopolis‘ to Centre of a Sydney Retailing Dynasty

Built Environment, Inter-ethnic relations, Local history, Retailing history, , , , , , , , , , , , , ,

Sydney is chock full of locality names—names like Taverners Hill, Clifton Gardens, Pearces Corner, Tom Ugly’s Point, Russell Lea, Camp Cove, Tumble Down Dick, Bushrangers Hill, Brush Farm, Strawberry Hills, Charing Cross, etc—places on or off the map not big enough or important enough to warrant the status of ‘suburb’ in their own right.

‘Plan de la Ville de Sydney’ (Lesueur’s Map, 1802) (Source: State Library, NSW)

One of the earliest in the Sydney colony with an interesting back story is Brickfield Hill. Located on indigenous Gadigal country at the south end of the CBD, Brickfield Hill is a loosely-demarcated area❋ with a small hill, the place where the early colony’s clay was sourced for the making of bricks and tiles…bricks plus a hill, hence the name “Brickfield Hill”. This endeavour started virtually from year one of the European takeover of the Great South Land…the First Fleet in 1788 included  convicts with brick-making experience – James Bloodworth, the most significant of them was to prove invaluable to the embryonic settlement’s progress. With only makeshift accommodation in the form of canvas tents, the construction of more secure and permanent housing was of the highest priority. Bloodworth was immediately appointed master brick-maker for the Port Jackson colony by Governor Phillip, assigned labourers and tasked with the job of manufacturing 30,000 tiles per month [Ringer, Ron, Bricks, Dictionary of Sydney, 2008, http://dictionary of Sydney.org/entry/bricks, viewed 19 Nov 2020 ; ‘Brickfield Hill’, www.kathyprokhovik.com), 06-May-2018].

The public brickfield on the ‘Hill’ became such a hub of activity that in 1799 it was described as “a suburb of the town of Sydney … within a few yards of the main road” (George Street) [‘Bricks and Nails: Building Materials as Criteria for Dating in Sydney and Environs from 1788’, Robert Victor Johannes Varman, (Unpublished PhD thesis from the University of Sydney, Sept. 1993), www.ses.library.usyd.edu.au].

Brickfield Hill, George Street (Photo: JR Clarke / State Library, NSW)

By 1804 there were 72 houses within the village of Brickfield Hill, but it wasn’t the most salubrious part of Sydney to live…that part of George Street was “infamous for its steep, dangerous and dusty road” (Varman). The “exceedingly unpleasant” place, “covered by a filthy brown haze and choking dust storms of windy days” the southerlies that swept along the street were given the name the ‘Brickfielder’ [“Brickaholic’s tales behind the history of Sydney’s ‘golden mile’”, (John Huxley), Sydney Morning Herald, 26-Sep-2008, www.smh.com.au]. By 1840 the public brickfields had become a blot on the landscape…the dusty brick pits and polluting kilns were not conducive to the increasing residential composition of the village. Its dingy, seedy taverns were dens of crime and rampant practices of bestial cruelty. In 1841 the government ended the brick industry in the locality. In it’s place small brick-making concerns in private hands fanned out in directions south and west to suburbs such as Newtown, Camperdown, Pyrmont, Glebe and to St Peters which eventually emerged as the premier site for brick-making in Sydney. Merchant stores, warehouses and more housing (leading to slum conditions) helped fill the void in Brickfield Hill (Varman).

(Source: SL – NSW)

Gradient was a sizeable issue in Brickfield Hill in the early period … the steeply sloping terrain along that section of George Street impeded the transport of heavily-laden carts. During the 1830s the authorities finally addressed this. A colonial earth-moving project succeeded in reducing the gradient between Bathurst and Liverpool Streets to a more gradual and manageable slope [‘Brickfield Hill (1) – The Hill’, Sydney Eye, www.sydneyeye.blogspot.com/].

At the beginning of the 20th century Brickfield Hill achieved the kudos of an altogether different association as the new home of one of Sydney’s early retail giants. In 1905 Anthony Hordern and Sons opened its “Palace Emporium” on the site, their mega-department store rose up on the ‘Hill’ – six stories high and comprising 21 hectares of retail space. At its zenith Hordern’s Brickfield Hill emporium was reputedly the largest department store in the world. [‘Brickfield Hill’, Wikipedia, http://en.m.wikipedia.org].

In its post-department store life the Hordern building’s vast “rabbit-warren” network of rooms and corridors was home to the Business School of the NSW Institute of Technology until the 1980s. Acquired by Malaysian property developer Ipoh Garden Development in 1985, it was demolished the following year amid considerable controversy to make way for the World Square complex⍉ [‘Anthony Hordern & Sons’, www.wikiwand.com].

With the leveling of Hordern’s Palace Emporium building and the earlier closure of the Brickfield Hill post office, Brickfield Hill’s long existence as an identifiable locality in Sydney’s CBD was consigned to the past.

PostScript: The Hordern story
From humble beginnings as a King Street (Sydney) drapery shop in 1823, Hordern and Sons built up an Australian retail empire.  After a stint in Melbourne retailing, Anthony Hordern (Senior) built his first Sydney emporium in Chinatown (Haymarket). The AH showcase, opened in 1905 to replace the fire-destroyed Haymarket emporium, was the new Palace Emporium (AKA the “Senior Store”). The Brickfield Hill retail ”super-store“—with a main entrance of imported Italian marble—later diversified its commercial activities to include a branch of the Commonwealth Bank, tea rooms, a post and parcel office, rest rooms, public phone booths and a Thomas Cook travel agency. Expansion of the business occurred from the Fifties with new Hordern & Sons stores opening in Canberra, Wollongong, West Ryde and Mid-City Pitt Street.  By the late 1960s Anthony Hordern & Sons was massively losing business to suburban malls and to city competitors…it’s retail empire crumbling, the Brickfield Hill flagship was acquired by Waltons Ltd. In early 1973 the doors of the iconic retailer, once lauded as a “colossal business premises”, closed for good. (Wikiwand entry).

🔽 (Caroline Simpson Library & Research Collection. Sydney Living Museums. [TC 658.871 HOR/54]) 

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❋ roughly covering the area from Sydney Town Hall (Bathurst Street) to Central Station, skirting the present-day locales and suburbs of Haymarket and Surry Hills

⍉ which then stayed as a gigantic hole In the ground for 18 years until World Square was completed in 2004

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Hugo Boss, Gentlemen’s Outfitters to the German Nationalsozialistische Arbeiterpartei

Commerce & Business, International Relations, Military history, Racial politics, Regional History, Retailing history, , , , , , , , , , , , , , ,

Ahh Hugo Boss … luxury watches, fragrances, men’s suits and fashion wear and accessories, Nazi uniforms. Wait! Run that last one past me again? Yes, it’s true. Hugo Boss AG＊, that doyen of international fashion houses with annual revenue exceeding €2.7 billion (2018) and over 1,100 stores worldwide, provided the German Nazi Party, with their uniforms during (and prior to) the Third Reich. Although you wouldn’t know so from a perusal of the Hugo Boss website which keeps a watertight lid on the company’s unsavoury past❂.

The clothing company was started in Metzingen (southern Germany) in 1924 by the eponymous Hugo (Ferdinand) Boss…it commenced supplying the NSDAP (National-Socialist Workers Party) with their brown military uniforms, according to the company’s own claim in 1924 (the same year Hugo Boss was founded)∅. Initially Boss designed and provided the standard Nazi brown-shirted outfits including Stürmabteilung (SA) uniforms, Nazi workwear, and Hitler Youth uniforms. In the Depression Boss’s company was like many, many businesses severely hit and Boss was forced into bankruptcy in 1931. That year was momentous for another reason, HF Boss joined the Nazi Party, an event that was to turn his fortunes round dramatically. At the same time the failed businessman also joined the SS (Schutzstaffel) as a “sponsoring member”.

By appointment to the Führer
Membership of the party meant more contracts for Hugo Boss as a favoured supplier of Hitler. Under the Nazi dictatorship Boss’ sales grew from 38,260 RM in 1932 to 3,300,000 RM in 1941 (Timm). Boss’ motives for joining have been attributed to “economic opportunism” and its clear that he saw the business advantages of tying his colours to the Nazi flagship, but there’s equal little doubt that his commitment to the Nazi cause was heartfelt (a photo of him with the Führer was said to to be one of the tailor’s most prized possessions)❊ [‘Hugo Boss’ Secret Nazi History’, (Fashion and War), M2M, (video, YouTube)].

🔻A Boss ad placed in the SS newspaper

Nazi fashionistas
From 1937 on, the relationship acquired an exclusivity, Hugo Boss made clothing only for the Nazis, including the black uniforms worn by the elite Nazi force, the SS (Boss didn’t design the uniforms worn by Himmler’s SS Corps, two party members unconnected to the company designed them). Boss continued to heavily advertise his fashions in the SS newspaper, Das Schwarze Korps, and fashionably chic the uniforms were! One of the pillars of the Nazis’ ideology was the pseudo-scientific belief in Aryan superiority, this involved showing the world what the “new man” looks like. There was no finer exemplar of this than the Wehrmacht military man, and this is where Boss provided the finishing touches. The firm’s stylish, sharply cut uniforms conveyed the desired outer appearance, the SS corporate identity that Hitler and the Nazis wanted to project to the world (Fashion and War).

HB as slave-labour drivers
From 1940 Boss used slave labour at it’s Metzingen textile factory, predominantly comprising women and later supplemented by the infusion of Polish and French POWs. The company  (sans it’s founder), after decades of dodging accusations, finally came clean about it’s shameful Nazi collaboration, after being pressured into issuing a mea culpa in 1997 for the gross mistreatment of the workers. Later the corporation commissioned a book on it’s dark past association❏ [‘“Hitler’s Tailor” Hugo Boss apologises for using slave labour to make Nazi uniforms’, (Lauren Paxman), Daily Mail, 24-Sep-2011, www.dailymail.co.uk].

(Source: www.militaryuniforms.net/Pinterest)

A discounted form of justice
After the war Boss was tried along with other German collaborators by a regional Denazification tribunal. The man known as “Hitler’s Tailor” claimed in his defence that he only joined the Nazi Party to save his firm. The court found Boss to have been a “beneficiary of the system” and fined him 100,000 RM, made him sever all connexions with his own firm and stripped him of the right to vote, join a political party or professional organisation. However, on appeal, the fine was reduced by 75%, the other restrictions were lightened and his culpability was downgraded to ‘follower’ of the regime. Before the findings could be ratified by the French Military Government and the punishments imposed, Boss died in 1948 (Timm).

(Photo: Hutton-Deutsh Collection/Corbis/Getty Images)

Endnote: Supping with the 卐 devil
Hugo Boss AG was far from the only company to profitably cohabitate with Hitler and the NSDAP. The list of big corporations doing mutually advantageous business was extensive, both within Germany and outside  – including Volkswagen, Bayer, Coca-Cola, Nestlé, Kodak, Ford, General Motors, IBM, Siemens, Chase National Bank and Associated Press [‘Companies with Ties to Nazi Germany’, (Debra Kelly), Grunge, (Upd.17-Dec-2019), www.grunge.com].

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＊ Aktiengesellschaft (German limited company)

❂ either that or trying to conceal or gloss over the inconvenient truth of the corporation’s history, eg, “in the 1930s it produced uniforms for various(sic) parties around the time of the world war”, www.bangandstrike.com

∅ the firm’s advertising in the 1930s stated that it was a “supplier of National Socialist uniforms since 1924”, however research suggest that this overstates by four years the length of Boss’ association with Hitler and the Nazis [Elisabeth Timm, ‘Hugo Ferdinand Boss (1885-1948) und die Firma Hugo Boss: Eine Dokumentation’, (Metzingen Zwangsarbeit – Forced Labour), MA Thesis, 1999]

❊ it was a ‘reunion’ of the two humble German corporals from World War I

❏ author Roman Koester wrote: “it’s clear that (Boss) did not just join the party out of economic calculation…he was a convinced Nazi” (Hugo Boss, 1924-1945. A Clothing Factory During the Weimar Republic and Third Reich)

Aldiland – from a Small-Town German Corner Store to World-wide Supermarket Discount Kings (Part II)

Commerce & Business, Retailing history, , , , , , , , , , , , , , , , , , ,

A few months ago Channel Five screened a documentary on the German supermarket giant (‘Inside Aldi: Britain’s Biggest Budget Supermarket’). The doco was laced liberally with interviews of Aldi senior managers, all waxing lyrical about their ‘enlightened’ employer and the company’s “win-win” virtues for everybody, which made the program feel uncomfortably like a commercial promotional video at times. Nonetheless, the doco did unearth an interesting back story, that of the supermarket emporium’s evolution and it’s founder-brothers who emerged out of the ruins of war-time Germany to steer their fledgling company to it’s eventual lofty perch as an much envied international discount supermarket chain.

🔺 an early Albrecht store displaying Karl’s name with plenty of Spirituosen (alcohol) and Lebensmittel (food) in the display windows (Photo: www.news.com.au)

The seed of Aldi as we know it today has it’s roots in Essen, Western Germany, in 1913. Anna Albrecht, the wife of a miner, started a small grocery store in the suburb of Schonnebeck as a sideline. After serving in the German Wehrmacht in WWII, Karl and Theo Albrecht, Anna’s sons, took over their mother’s business, which they initially named Albrecht KG. During the formative first years, Karl for a time operated some stores solo (under the name “Karl Albrecht Lebensmittel”).

The Albrecht brothers concentrated on the Ruhr area of Germany at first, and then expanded rapidly across West Germany over the next 15 years. By 1960 Albrecht KG had amassed 300 shops in the Bundesrepublik and had a yearly cash flow of DM90 million. A factor contributing to the Albrecht stores’ early popularity and success was it’s novel approach to tax rebates from purchases. Instead of following the business norm of making customers collect stamps before they qualified for the 3% rebate, the brothers subtracted the tax from the price before sale, a radical idea and an ingeniously simple one which undercut their rivals’ bottom price. Aldi, as it was soon to be known, was on it’s way to revolutionising the low-cost grocery trade.

The brothers Albrecht – Theo (L), Karl (R) 🔻

(Source: www.broadview.tv)

Sibling rivalry: Splitting of the ‘atom’ in two
1960 was a momentous year in the history of Aldi. The two brothers fell out, apparently over whether or not to sell cigarettes in Albrecht Discounts, and decided to divide the company into two separate entities➊. With a new, shorter, snappy name, ‘Aldi’, derived from the first two letters of their family name and the ‘Di’ from Diskont (Discounts), the company split into two – Aldi Nord (North) and Aldi Süd (South). At this time, as Aldi was an intra-West Germany operation only, the division was between the north (Theo’s domain) and the south (Karl’s domain) of the country. The geographical border separating Aldi Nord and Süd is known as the Aldi-Aquator (‘equator’). Aldi, after the schism, continued to grow, the brothers’ insistence on stocking only popular items, cut down inefficiencies and proved profitable.

🔺 Aldi’s first German store (in the “North sector”)

A store displaying both names, Albrecht and Aldi 🔻 (Photo: Getty)

By 1967 the first international growth steps were taken with the acquisition of Austrian grocer Hofer by Aldi South. As Aldi expanded elsewhere the arrangement between the brothers divied up the world thus (with a few later variations): Aldi South’s jurisdiction would entail Austria and the English-speaking countries, whereas Aldi North would operate in Germany and the rest of Europe. Netherlands followed in 1973, and in 1976 Aldi South made its first incursions into the US. The US became the only market penetrated by both arms of the Aldi empire when Aldi North acquired the US Trader Joe’s chain. Britain came into the Aldi South fold in 1990. Aldi South has been particularly aggressive in it’s drive for store expansion in both the US and Britain. The retailer has upward of 2,000 stores in 36 states across the US and in 2017 announced plans to add 900 more by 2022➋.

🔻 Trader Joe’s, Amherst, NY

Aldi found the highly-competitive (and crowded) UK grocery field initially hard to penetrate, coming up against well-established market leaders Tesco, Asda, Sainsbury’s and Morrisons. By the 2010s however it was making exponential inroads into the Brits’ grocery market…by October 2013 it had 300 stores and doubled that by 2016, with new stores opening at the rate of one a week! Aldi South’s stated goal is to reach the 1,000 mark by 2022. At this rate it is looming as a genuine threat to the above “Big Four” Supermarket chains.

Aldi Long Eaton store (int) in Derbyshire (Photo: www.nottinghampost.com) 🔻

Aldi global expansion intensified after the collapse of the Eastern Bloc system in 1989 and has experienced rapid growth in the 21st century. Since the 1990s Aldi has moved into Australia, Belgium, Denmark, France, Hungary, Ireland, Portugal, Slovenia, Spain and Switzerland. In 2019 it made another market quantum leap, opening two pilot stores in Shanghai, China➌.

🔺 The Albrecht brothers‘ carve-up of the world map (Theo plays black, Karl orange)

Counting the combined Aldi stores operating in Germany by both Nord and Süd (about 4,100 stores), there are over 8,000 stores in Europe as a whole (more counting the Hofer chain). All up, the reach of the Aldi retail tentacle worldwide accounts for 10,000 to 12,000 stores, with revenue (2010) of €53 billion. An international supermarket success story with nary a blot on it’s copybook – with one exception. In 2008 Aldi South invested an estimated €800 million in Greece but after only two years operating, it had to pull the plug on it’s 38 stores in the ancient land of the Olympiad. Nothing substantial divulged as to motive (par for the course for Aldi), but apparently the Aldi board of management was frightened off by the “informal business practices” prevalent in Greece (transparently code for government/business corruption)➍.

Theo in 1971, following his misadventure (Photo: Getty) 🔺

Endnote: The saga of the reclusive co-founders (“the brothers frugal”)
Theo and big brother Karl were never your stereotypical, über-rich CEOs, bobbing up everywhere, constantly in the media spotlight, being snapped for glossy mags gratuitously showing off their latest flashy, expensive car or girlfriend. That was not the brothers’ ‘bag’ – for in business and in personal lifestyles their thriftiness was legendary. But after 1971 the Albrechts’ customary muted behaviour reached a whole new level. That year, the brothers’ extraordinary wealth came back to haunt them➎. Theo was kidnapped at gunpoint and held hostage for seventeen days. The younger brother was released on the payment of a ransom – after Theo had haggled with his captors over the amount demanded! Theo later tried to claim the nearly US$3 million Aldi North had to fork out for his release as a tax deduction business expense! Theo’s ordeal profoundly affected both brothers, they became even more reclusive and secretive in their personal lives and movements (no interviews or public statements, hardly any photos of them together or separately after 1971 exist). Eternally vigilant thereafter, both brothers reportedly would drive home from work, separately, by different routes each day. The brothers Albrecht, having profoundly changed “German food culture and consumption mentality” forever, semi-retired to a remote island in the North Sea in their eighties to pursue the hobbies of golf, orchid-growing and collecting old typewriters (very old school typical of them).

The remote island of Föhr off the Holstein Coast where the supermarket 🔺 entrepreneur brothers beavered away on their personal hobbies during much of their twilight years (Photo: www.tourism.de)

∈ওওওওওওওওওওওওওওওওওওওওওওওওওওওওওওওও∋

➊ although the separation wasn’t legally finalised until 1966

➋ German supermarket retail discounter Lidl—a copycat competitor to Aldi utilising the Aldi business model as a lodestar to chart it’s own course to retail riches —followed its path into the US market in 2017

➌ with concessions made for Chinese consumer buying-preferences based on online testing via Alibaba’s Tmall

➍ no doubt to Aldi’s chagrin, Lidl stores in Greece by comparison are apparently thriving

➎ they were reputed to be the richest men in Germany

❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖

Articles and sites referred to:

‘The History of Aldi: The Tale of Two Corporations with the Same Name’, (Team S4RB), 13-Jun-2017, www.blog.s4rb.com

‘Inside ALDI’s first two pilot stores in China’, (10-Jun-2019), Shanghai’s.ist

‘Aldi founder became recluse after family kidnapping’, Albrecht obituary,

‘Aldi’, Wikipedia, http://en.m.Wikipedia.org

‘Aldi quits Greece’, German Retail Blog, 23-Jul-2010, www.german-retail-blog.com

‘Grocery chain Aldi to open another 900 stores in U.S.’, (Zlati Meyer), USA Today, 13-Jun-2017, www.usatoday.com

‘The Aldi Story – Karl and Theo Albrecht’, (2014 documentary), www.broadview.tv

‘Secrets of store success: Why Aldi is winning the retail battle’, (Alison Kirker), Sunday Post, 19-Feb-2018, www.sundaypost.com

Aldiland – from a Small-Town German Corner Store to World-wide Supermarket Discount Kings (Part I)

Commerce & Business, Retailing history, , , , , , , ,

Anyone who’s ever walked into an Aldi supermarket would notice the difference from your established, big-name chain supermarket. For a start, in your mega-‘market you would expect to see palettes lying out the back in the loading dock, NOT on the aisle floors in the middle of the store. Perched on the Aldi palettes are groceries and other goods in their original cardboard boxes. Aldi has a small shop-fit budget, it doesn’t spend money on installing fancy shelving, it’s stores typify the “no frills store format”, which simply offers, as it’s advertising spiel announces, “Everyday low prices”. Minimalism is one of the standard Aldi store’s by-words. The checkout area tells a similar story. Shoppers line up their purchases on a long counter which gets shunted down to the cashier. The area of the till itself is small, minute even, the whole thing is streamlined for speed and ease of transacting. And you won’t find a cornucopia of either choice or types of products in Aldi’s.

The key to retail success
Sticking to the basis is a large part of the Aldi formula. The supermarket stocks less than 2,000 items…compare this to your average Coles or Woolies supermarket which typically stocks upward of 40,000 items! Looking for some Foie de gras or that special Russian black caviar, no, you won’t find these here. Aldi’s product base resides on what they call Private brand items➀. Smaller concentration of staple products + purchase in high quantities = lower prices for the customers. Although that said, Aldi also offers up to the trolly-pushing punters what it calls “Weekly Special Offers”. Located in the middle aisles—what Aldi cutely calls its “Treasure Aisle” (get it?)—are a diverse range of merchandise, some of which might be in the luxury category, Alpine snow suits and hiking tents, tools for the house handy-person, electronics, European chocolates, right through to the more peculiarly exotic pet pampering products like dog sofas and cat caves➁. All of which are seriously cheap.

🔺 marketing spin from “The Book of Aldi”

Aldi eschews the “nice shopping experience”, customer service is not great➂. The store’s mission, once the shoppers have made their selections, is to shuffle them through as rapidly as possible, hence the streamlined checkout. Shoppers are ‘encouraged‘ (by the scarcity of space) and the requirement to self-pack to quickly move their goods to the back bench to pack them. Aldi doesn’t have self-serve checkouts or ‘fast’ minimum-item lanes, so inevitably there are queues because of popularity…as a consequence sometimes patience and timing are supreme virtues.

When the last item has been taken from a carton on the palette, a shop assistant will simply replace it with a new carton. This is time-efficient, saving the store staff from having to constantly restock the shelves. And when it comes to personnel on the ground, Aldi certainly have leaner staffing structures than the “Coles-worths” and Tesco’s of this world. This has prompted claims that the German employer puts unrealistic time-pressures on the reduced number of store staff to move the palettes into their point-of-sale position and complete other store-related tasks. When the stores close at 8pm or whatever the local time applicable, the shop attendants and cashiers turn into cleaners and spend the next hour getting the store spotless. There have been allegations (denied by Aldi) that it makes staff in some regions arrive 15 minutes before start-time to check the stock level without being paid. And of course it’s widely known that Aldi have consistently been notoriously anti-union in its staffing management practices➃.

Aldi stores don’t include the extraneous auxiliary facilities regularly found in other larger mainstream supermarkets and hypermarkets—no in-store banking/ATM machines, cafes, photo booths, pharmacies, children’s rides, toilets, etc—Aldi’s view is these add to the store’s end-cost. Instead they concentrate on the singular task of delivering groceries and other household essentials.

Aldi’s control of its “own brand”—which makes up a whopping 90 to 95% of what it sells—is interesting. First there’s the design, it deliberately makes the packaging on its food items look much the same as the leading manufacturers’ equivalent brands. Next, it tries to replicate the taste of these popular brands. Then Aldi invents a brand name for the product which often sounds vaguely like the well-known brand. And it apparently works – even on luxury items. To take a UK example: Many British consumers who once shopped at the upmarket Sainsbury’s and Waitrose supermarkets have been enticed by Aldi’s “Specially-Selected” luxury items – and the reason is twofold, obviously price (much cheaper than Sainsbury’s), but also because they now feel they are getting a similar-quality product (retail expert Julie McColl, Glasgow Caledonian University). As well as a recent product expansion to include luxury treats for it’s shoppers, Aldi’s move into ‘fresh’, the fruit and veg lines, has broadened it’s appeal.

Another key to Aldi being so spectacularly successfully in the supermarket game is it’s relationship to suppliers. Because of their runaway retail success they have many primary producers and manufacturers lining up to do business with them, but Aldi is well-known for driving a hard bargain with suppliers (sort of a case of “my way or the highway”). They are also clever at judging what will be efficacious – by sourcing local suppliers and advertising in the UK they have softened the German outsider element and fostered an impression among British shoppers of the big discount ‘invader’ being home-based.

Dr McColl has also drawn attention to Aldi’s recently strategy of positioning some of its new stores in towns next door to the prestigious Marks and Spencer outlets. The appeal of this being that shoppers can easily flit between the two – and avail themselves to the best of both worlds, getting their luxury items at M&S and their basics at Aldi.

The above factors, outlined, are apparently the ‘secrets’ to Aldi’s stellar success and it’s ability to offer and maintain retail prices at rock bottom in markets across the world. In part II I will tell the story of Aldi’s rise from a single grocer’s store in provincial Germany to international retail empire, and of the two publicity-shy and increasingly reclusive brothers who spearheaded the company’s seemingly unstoppable growth and expansion.

✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑✑

➀ called Exclusive brands in US AldiLand

➁ pet furniture seems to be one of Aldi’s specialities

➂ or maybe I mean non-existent – staff are hard to catch, as they are usually flat out haring round the store trying to meet management’s daily schedules

➃ 200 Aldi store managers in the US filed charges against unfair labour practices (University of Huddersfield). Aldi operations in other countries have similarly been criticised for incidences where the store has adopted an authoritarian or heavy-handed line towards it’s staff

☤☤☤ ⍅ ⌽ ⍆ ☤☤☤

Articles, papers and sites referred to:

‘Aldi – “The No Frills Retailer”, (Peter Emsell, with contributions by Leigh Morland), Unpublished case study, University of Huddersfield (2011), www.eprints.hud.ac.uk

‘Secrets of store success: Why Aldi is winning the retail battle’, (Alison Kirker), The Sunday Post, 19-Feb-2018, www.sundaypost.com

‘Aldi’s secret for selling cheaper groceries than Wal-Mart or Trader Joe’, Business Insider, (Ashley Lutz), 09-Apr-2015, www.businessinsider.com

‘Aldi rebukes Dispatches Investigation, says it contains “selective information”‘, (Natalie Mortimer), The Drum, 10-Nov-2015, www.thedrum.com

    

Fortnum and Mason’s Retail Longevity: Once the Favourite Grocers of HRM and Other Assorted Royals

Commerce & Business, Retailing history, , , , , , , , , , , , ,

That fashionable mag Harper’s Bazaar recently compiled a list (the sort of thing they do) of 10 of the favourite places in London that good Queen Elizabeth likes to shop at. They are, in no particular order, Smythson❅ (luxury leather goods and stationery for the Royal quill); Hunter (Wellington boots that QEII likes to drag on for traversing her Scottish estates); Launer London (the Royal handbag – apparently she has 200 of them); Barbour (her coats – there’s just one particular type of coat that Liz has been faithful to for the entire duration of a Diamond Jubilee and then some!); Anello and Davide of Kensington (shoes); Fulton (umbrellas); John Lewis (haberdashery and household goods); Rigby and Peller (suppliers of the Queen’s lingerie for 59 years); Corgi Hosiery (no, not stockings for HRM’s favourite “pampered pooches”, but socks for the Royal feet); Dubonnet (Liz stocks up on gin and Dubonnet⊞ for her favourite cocktails).

A household name in British retail trading since the time of Queen Anne

But there is another London retailer whose royal connexion for sheer staying power puts all of these businesses in the shade. Fortnum and Mason have long held sway as the Royals’ grocer of choice, starting with the family matriarch Queen Victoria in the 1860s, through to (until recently) the present ‘shopaholic‘ monarch.

F&M, 1957 [Source: Getty image]

The company’s history goes back even further—to the year 1707. In that year tenant (and latent entrepreneur) William Fortnum and his landlord Hugh Mason formed what was to become a momentous business partnership. At that time Mason was already operating a small store in St James Market for two years. The new store at 181 Piccadilly was the start of a retail innings that has now stretched 312 years and counting. Over that epoch of time Fortnum and Mason or F&M can (and has listed) a commendable catalogue of achievements, including:

🔸 introduced the Scotch egg in 1738— proving to be a highly portable snack/meal, just right for long distance journeys—as were F&M’s famous hampers

🔸 functioned as an official post office as well as a retail store – from 1794 up to 1839 when Britain established the General Post Office (GPO)

🔸 Queen Victoria chose F&M as her exclusive purveyor to despatch supplies of food to Florence Nightingale’s soldier patients in her field hospitals in the Crimean War (1856)

🔸 in a deal with the American HJ Heinz company, F&M in its role as stockists of tinned goods, introduced the humble baked bean to the British Isles (1886)

🔸 helped to bring variety to the British tea palate by introducing a range of south Asian teas (Indian and Ceylonese) to Britain for the first time including a new “Royal Blend” in honour of Edward VII (1902)

🔸 sent food hampers to imprisoned suffragettes (who had smashed the windows of the Fortnum store in protest, demonstrating apparently that F&M could turn the other cheek) (1911)

🔸 more predictably, they also sent hampers to soldiers of the British Expeditionary Force in France and Flanders during WWI (1914)

🔸 one of the things F&M is most proud about is its role as a supplier of expeditions, it supplied George Mallory’s failed attempt to climb Mt Everest in 1924, as well as other expeditions in Africa. To extend the alpine theme, F&M in 1930 added a mini sky slope for promotional value to the Third floor of the Piccadilly store

21st century Fortnum, an era of belated expansion

In 2007 F&M celebrated its tercentenary with a long-overdue refurbishment of its flagship store – a makeover costing £24 million ☉.

[Photo: www.londontown.com]

Finally, during this decade F&M made the move toward a multi-store structure. In 2013 and 2014 branch stores were opened in St Pancreas International Station and Heathrow Terminal 5 respectively. This was followed by an international presence. Dubai opened an F&M store in 2014 and just this year the company made its biggest venture on the world stage yet, opening F&M Hong Kong.

The Foie gras controversy

As a grocer F&M has pursued a market strategy of providing quality (definitely not inexpensive) groceries (“posh nosh”) and luxury (and sometimes exotic) niche food items (eg, ready-to-eat luxury meals such as fresh poultry or game in aspic jelly). This has occasionally led the retailer to become embroiled in controversy. In 2010 F&M earned the opprobrium of animal rights group PETA UK who (enlisting the support of some celebrity Britons) demonstrated against F&M‘s Foie gras product. The protestors were unhappy that the retailer did not alert consumers to the cruel method of force-feeding geese and ducks to produce the product. F&M, despite the pressure exerted on it, doggedly refused to discontinue the line.

The company has been the subject of other controversies of recent. F&M has been tangled up with the brouhaha of allegations of tax avoidance by its parent company’s subsidiaries. This resulted in a mass sit-in in F&Ms Piccadilly store by UK Uncut (a lobby group protesting public service cuts and tax avoidance).

Severing of ties with the Windsors and more bad publicity

In 2018 Buckingham Palace stopped providing meat from its Royal Farms at Windsor Park to F&M…it was unhappy with F&M’s practice of bullying its suppliers to squeeze prices down. However F&M did not pass this on to consumers, continuing to assert that its bacon, pork and lamb (at double the supermarket price!) was sourced from HM’s Windsor Farms. The company had to grovel apologetically to Buck Palace, and with regal ill-will compounded, thus its 150-year tenure as the Royal family’s grocer was finito.

PostScript: A British institution but not a British-owned one

Despite its Royal association and status as a “national institution“, a part of the retailing firmament in the UK, F&M has long been foreign owned. In 1951 it was acquired by a Canadian businessman, W Garfield Weston. Today F&M is still in Canadian hands, privately owned by Wittington Investments Ltd which also owns the discount clothing store Primark.

181 Piccadilly, St James’s, W1A 1ER   

Reference material:

“Fortnum & Mason: The First 312 Years”, www.fortnumandmason.com

“10 places the Queen does her shopping”, Harper’s Bazaar, 15-May-2018, www.harpersbazaar.com

“After 150 years as the royal grocery, Fortnum and Mason is ditched by the Queen and forced to apologise over Windsor meat scandal”, Sebastian Shakespeare, Daily Mail, 29-Sep-2014, www.dailymail.co.uk

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❅ Smythson’s are especially blessed by the British Crown, being the recipients of no less than four Royal warrants

⊞ a French red wine

☉ the following year F&M installed bee hives in the rooftop of the store!

Birkenhead Point Back Story

Commerce & Business, Heritage & Conservation, Local history, Retailing history, , , , , , , , , , , , , , ,

Birkenhead Point Factory Outlet Centre (BPFOC), on the western side of Sydney’s Port Jackson, is a bit of a sleeper as far as shopping centres and malls go. Recently, it ‘celebrated’ (sic) it’s forty-year anniversary (opened 26 July 1979), but it was an anniversary bereft of any fanfare whatsoever! The centre has 170 stores or services including two anchor tenants but can’t attract a major department store chain. In recent times it has tried to lure more paying punters by introducing a “shopper hopper” ferry service from Circular Quay or Darling Harbour. Thursday night shopping is virtually a non-event with most of the vendors not bothering to stay open. The only shoppers you are likely to see at night are those grocery shopping at Coles and Aldi✾.

The reasons for BPFOC’s low-key status among the large retail outlets and malls of Sydney are manifold. It’s relatively small size and its distance away from the Sydney rail network are contributing factors. Likewise, the proximity of Burwood Westfield (a few kilometres away) and the Broadway Centre to name two, gives these shopping complexes a comparative advantage.

Birkenhead Point before it was a shoppers’ haven

The area around the point was originally part of a land grant made to John Harris, the colony’s first surgeon (circa 1800). By the late 1830s Harris’ land on the point, having shifted ownership several times, was a brick-making operation. This business didn’t apparently succeed as the owner, a Mr Dutton, went bankrupt in the early 1840s. At this time Birkenhead Point went under the name of Duttons Point, then part of Five Dock Farm.

(source: Dictionary of Sydney)

“Abercrombie’s Point”

Charles Abercrombie, the next man of capital to acquire Birkenhead Point, turned it into a race track (Abercrombie’s Racecourse). The first Australian steeplechase was held here on 19 September 1844. The horse racing caper failed to produce a worthwhile dividend for Abercrombie, prompting him to transform the site into a “salting and boiling down works” in the mid 1840s. This business as well was apparently not sufficiently profitable and Abercrombie resold the land.

New industry, rubber works

In the following years the land on the point again changed hands several times. In 1885 the property was bought by the Perdriau brothers (Henry and George) who started a business to make rubber engine packing for their ferry service (With a single work shed at Birkenhead Point). In 1899 under the leadership of Henry Perdriau, the brothers established the Perdriau Rubber Company (PRC) and began manufacturing rubber products in 1904. Coinciding with the rise of the automobile, the company launched itself into the manufacture of rubber tyres, sufficiently successfully that PRC took over the whole 7.7 hectare site (by 1928 it was producing somewhere between 500,000 and 780,000 tyres annually)⍟.

Dunlop Rubber plant

In 1929✩ the Perdriau Company merged with the English firm Dunlop (forming Dunlop-Perdriau Rubber Co) and the new enterprise at Drummoyne became the Dunlop Rubber Company (DRC)❂. By the 1960s Dunlop’s Birkenhead Point factory employed 1,600 workers. By the 1970s the complex comprised eight brick buildings⌺ and a number of auxiliary structures (sawtooth roofed sheds). The brick buildings were substantial, being between two and four storey high.

Perdriau’s rubber hose line

From industrial to commercial

In 1977 the Birkenhead Point tyre plant closed its operation with the site being acquired by major Australian retailer/department store chain David Jones for $21M. DJs converted the brick and rust-red tyre factory into a waterfront shopping centre, retaining 40% of the original factory buildings. The shops were eventually replaced by designer brand clothing outlets (including a David Jones factory outlet and a Fletcher Jones factory outlet). In the 1990s apartments were added to the site. A long glass ceiling was installed on the top floor in 2010 and the decade saw the centre undergo a number of extensions and renovations.

Over the last thirty-plus years the Birkenhead Head complex has undergone several changes of ownership. Most prominently in 2004 it was bought by Singapore tycoon Denis Jen for $111M (later unloaded). Currently, Birkenhead Point Outlet Centre is owned and managed by the Mirvac Group.

BP Marina

The prime location of the factory outlet centre fronts on to a marina which caters for over 300 mostly pleasure watercrafts (as well NSW Marine Rescue and Divers maintain operational vessels at the marina). There are also Marine Rescue and maritime industry association offices below the shopping centre at wharf level. The Birkenhead Point complex originally planned to include a series of museums in the site (car, fishing and maritime) but these ventures have never apparently gotten off the drawing board.

Publications and websites consulted:

‘Dunlop Factory Buildings At Birkenhead Point (Former)’, www.environment.nsw.gov.au

‘Five Dock racecourse’, Dictionary of Sydney, www.dictionaryofsydney.org

Graham Spindler, Uncovering Sydney: Walks into Sydney’s Unexpected and Endangered Places (1991)

Brian & Barbara Kennedy, Sydney and Suburbs: A History and Descriptions, (1982)

‘The Names of Sydney: Suburbs D to G’, Pocket Oz Sydney, www.visitsydneyaustralia.com.au

‘Roaming Roy Goes Shopping For History – Birkenhead Point’, The Tingle Factor Box, 24-Feb-2013, www.tinglefactor.typepad.com

Josephine Tovey, ‘Resurrected shopping centre up for sale’, Sydney Morning Herald, 06-Mar-2010

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✾ late night shopping at Birkenhead Point in any case would be a misnomer as the centre’s closing time on Thursday is 7:30pm

✩ a couple of sources give the date as 1928

⍟ shoes were the other mainstay of Perdriau Bros’ production business…in 1928 just prior to the merger they were still producing 50,000 shoes per week

❂ although some of the company’s advertising in the day referred to the business as the “Dunlin Rubber Co”

⌺ architect Peter Hickey’s design of the commercial project allowed the extant brick buildings to retain their former industrial character whilst integrating the centre into the maritime setting of the waterfront…the original buildings are listed by Heritage NSW as being of Federation warehouse design

Empires Built of Chocolate: The Quaker Dynasties of English Chocolatiers

Commerce & Business, Memorabilia, Popular Culture, Regional History, Retailing history, Social History, , , , , , , , , , , , , , , , , , , , , , , , ,

First World problem – Cadbury’s or Nestlé’s?
FOR children of the Fifties and Sixties growing up in the West, the preference of chocolate usually came down to a shelf choice between two, Cadbury or Nestlé. My recollection is that my own juvenile palate tended towards Nestlé, but only partly due to taste…yes I did as a kid have a fondness for Nestlé’s slim, pocket-size milk chocolate bars but Nestlé was also great for youthful card collectors. Each bar contained a different colour card (vintage cars, planes, etc.) that you could paste into your Nestlé Car Club book or Sky Club book or into their “Conquest of Space” series book. A glance at the enduring popularity of Cadbury’s chocolate is confirmation that the British confectioner did not miss my preference for their Swiss rival.

(photo courtesy of www.historyworld.co.uk)

As a child I was very aware that Cadbury’s had a chocolate factory in Tasmania (known as “the factory in the garden”)…the idyllic image of rustic Claremont was imprinted in my head courtesy of innumerable Cadbury TV ads (spectacular mountain scenery didn’t improve the taste of the chocolatier’s product but it gave it the perception of an extra lustre). What I wasn’t aware of as a young chocolate consumer was that that Cadbury’s—nay, almost all of the English pioneering chocolate manufacturing industry—was a Quaker company. Cadbury’s kicked off from a small shop in Birmingham, England, in 1824, but before Cadbury’s there was Fry’s Chocolates which opened its first shop in Bristol in 1761, and after it Rowntree’s (established 1862, in York{a}). All of these chocolatiers were founded by English Quakers and the companies business ethos imbued with the Quaker philosophy.

(photo courtesy of www.historyworld.co.uk)

In business by circumstance and conviction British Quakers in the 19th century not only cornered the chocolate market, they excelled in business in a multiplicity of fields, ranging from banking (Barclays, Lloyds) to biscuit manufacturing (Huntley and Palmers, Carrs) to footwear (Clarks’ Shoes) to match manufacturing (Bryant and May) [‘How did Quakers conquer the British sweet shop?’, (Peter Jackson), BBC News Magazine, 20-Jan-2010, www.bbc.com].

The circumstance that Quakers found themselves in guided their decision to embrace the world of business. As a Christian non-conformist group in a sea of English Anglicanism, adherents of the Quaker faith in the 1800s were subjected to the systematic discrimination befalling religious outsiders – exclusion from the universities (until the 1870s) meant the leading professions of medicine and law was barred to them. Naturally enough, this barrier to the industrious, go-ahead Quaker person, turned them towards business and commerce [ibid.].

The senior Cadbury ⤋


 Kings of the chocolate business{b}
The Quaker philosophy incorporates a commitment to social reform and the pursuit of justice and equality. This ethos informed their business practices, Cadbury’s and other Quaker firms established a reputation for being honest and reliable. This gave them a competitive advantage over their non-Quaker competitors. The perceived ethical nature of Quaker confectionery firms was rewarded with customer loyalty. John Cadbury and his successors were among the first to set a firm (and fair) price – this was a clear departure from the hitherto customary retail practice of point-of-sale price bartering [ibid.]{c}.

Cocoa the health drink
Founder Cadbury started off mainly selling cocoa drinks (solid chocolate came later)…this was borne out of 19th century social concerns – a Quaker (by definition teetotal) response to the “perceived misery and deprivation caused by alcohol” in British society (Helen Rowlands, Quaker historian){d}. The Cadburys marketed cocoa as a cheap available drink, one that was healthy (the process involved boiling thus removing the impurities lurking in the dubious public water supplies of the day)[ibid.]{e}.

Democratising cocoa and drinking chocolate Cocoa and drinking chocolate had been around in England since the 1650s but before Cadbury’s came along it had been a luxury beverage for the elite. John Cadbury’s improvements to the product gave it more varieties and made it a more palatable drink, and after the Gladstone government reduced taxes on imported cocoa beans in the mid 1850s, the cost of cocoa became within the reach of the greater majority of Britons. Cadbury’s introduction of unadulterated “cocoa essence” in the 1870s coincided with a government crackdown on the widespread adulteration of food in the UK. The upshot was free ‘plugs’ for the purer Cadbury product and a boost in fortunes for the Quaker business [‘The Story of Cadbury. Early Days – A One Man Business’, www.cadbury.com.au].


Even ‘Lancet’ was lavish in it’s praise of Cadbury’s Cocoa ⤋(photo courtesy of www.historyworld.co.uk)

Worker welfare and satisfaction a priority The Cadbury brothers, Richard and George (sons of the founder), placed an uncommon degree of emphasis on the fitness and health of their workforce (again philosophically driven by their faith). After moving their factory to a greenfields site south of Birmingham to cope with the business’ growth, George built the Bourneville village in the vicinity – this was a model village community for Cadbury’s workers – replete with schools, leisure facilities (including a lido) and parks, canteen, a carillon and its Friends meeting house. Cadbury’s employed doctors and dentists for the benefit of Bourneville employees and was among the first to pioneer pension schemes for their workforce [Jackson, loc.cit.]. The village included attractive “Arts and Crafts” style cottages in picturesque surrounds, but no pubs were permitted on the Bourneville estate{f}.The Bourneville factory ⤊

Chocolate you can eat! Cadbury Dairy Milk Richard and George’s acquisition of a new cocoa press reduced the cocoa butter content, further improving the taste of the Cadbury cocoa drink. The press also helped Cadbury’s make a breakthrough with eating chocolate in the 1890s…learning from the Swiss prototype, Nestlé, it started to create milk chocolate bars to rival those on the Continent. In 1905 Cadbury’s introduced Dairy Milk Chocolate which would go on to become its and the UK’s top selling chocolate bar (60% UK market share in 1936). DCM, together with Bourneville Cocoa, have established themselves as Cadbury’s two all-time stand-outs, iconic products in the history of the company [‘The Story of Cadbury’, loc.cit.; Deborah Cadbury, The Chocolate Wars: The 150-Year Rivalry Between the World’s Greatest Chocolate Makers, (2010)].

(photo courtesy of www.historyworld.co.uk)

Following success came expansion – in 1918 Cadbury’s opened a new factory in Tasmania (the first outside the UK). In 1910 Cadbury’s finally overtook J.S.Fry & Sons in chocolate and cocoa sales…Fry’s got the block of solid chocolate right before Cadbury’s but the legendary “glass and a half” merchants surged ahead in the end. [ibid.]. So much so that Cadbury’s acquired its biggest domestic rival in 1919 (giving it Fry’s top lines, ‘Chocolate Cream’ and ‘Turkish Delight’). In 1967 Cadbury’s added the Australian chocolate manufacturer MacRobertson (‘Freddo’, ‘Snack’){g}.

Family Fry and partners
The Fry chocolate business was another dynastic Anglo-Quaker confectioner. The original Joseph Fry started the company in the mid Georgian period in Britain, taking on a partner, John Vaughan. Upon Fry’s death his widow Anna Fry took over the family business and the firm name changed to Anna Fry & Son. Joseph Storrs Fry succeeded her and partnered with a Dr Hunt. Storrs Fry patented a method of grinding cocoa beans using a Watt steam engine. The company then devolved to his sons, Joseph, Francis and Richard, as joint partners. Under the next generation of Frys (Joseph Storrs Fry II), the business reached its commercial pinnacle before it got swallowed up by the vast Cadbury empire [‘J.S.Fry & Sons’, Wikipedia, http://en.m.wikipedia.org].

Shadowing Cadbury’s, the rise of Rowntree’s Rowntree’s, Cadbury’s other domestic rival in the sweets trade, was the creation of Henry Rowntree. Like Cadbury’s Rowntree applied Quaker principles to his business and always insisted on the best quality ingredients [‘Rowntree’s’, Wikipedia, http://en.m.wikipedia.org]. Joseph Rowntree, Henry’s brother, joined as partner in 1869, and being a staunch advocate of social reform, steered some of the firm’s profits towards his Quaker philanthropy. The company’s first big success was with ‘Fruit Pastilles’ and ‘Fruit Gums’ which allowed it to follow Cadbury’s earlier move in purchasing a Van Houten press. This enabled Rowntree’s to produce chocolate sans cocoa butter, so as to compete with Cadbury’s successful ‘Cocoa Essence’ [Robert Fitzgerald, Rowntree and the Marketing Revolution, 1862-1969, (2007)]. Rowntree’s, as their rival Cadbury’s did, created a dynasty of chocolatiers, merchants, philanthropists and social reformers – succeeding sons and brothers kept the family name at the helm of the company (Joseph Rowntree Jr, Henry Issac Rowntree, John Stephenson Rowntree).

Rowntree’s later created the consumer favourites ‘Kit Kat’, ‘Aero’ and ‘Smarties’, and went on its own expansion journey, merging with the Halifax “Toffee King” Mackintosh in 1969 (which added ‘Quality Street’ and ‘Rolo’ to its product inventory). Rowntree’s (rebranded Rowntree Mackintosh Confectionery) then acquired Australian chocolate manufacturer Hoadley’s (1972) which gave RMC Hoadley’s ‘Violet Crumble’ bar.

Rowntree’s introduced the ‘Yorkie’ bar in the Seventies which put a serious dent in Cadbury Dairy Milk’s market share and contributed to Rowntree’s reaching fourth spot in the world chocolate manufacturers’ ladder by the Eighties{h}. This was Rowntree’s apogee however as its underperforming shares saw it fall victim to a successful takeover from the Swiss giant Nestlé in 1988 [‘Rowntree’s’, op.cit.].

Nestlé’s Yorkie, a dubious sales pitch: the “Nestlé Goliath” was clearly tone deaf to the advantages of presenting as inclusive when they designed this, a chocolate bar which discriminates on the grounds of gender? ⤋

“Not for girls!”

A British institution undone
Cadbury’s, despite its continuing success, in 2010 suffered the same fate as Rowntree – swallowed up by another Goliath of the food business, US Kraft Foods (operating now as Mondelēz International). The loss of Cadbury’s, a household name in British manufacturing for 186 years, was highly controversial, causing an outcry in the UK. What was especially galling to many patriotic Brits was that Kraft had to borrow £7bn to seal the acquisition deal, and the banker brokering the financial transaction was itself British – the Royal Bank of Scotland [Deborah Cadbury, op.cit].


Ft-Note: Pseudo-Quakers
The runaway commercial success of Quaker food and confectionery companies did inevitably lead to imitation. A US food manufacturer in the 1870s introduced “Quaker Oats” to the cereal market…on the packets and in product advertising are images of a man dressed in Quaker garb, despite the US company having NO connexion whatsoever with the Religious Society of Friends (Quakers){i}. The company states that it chose the “Quaker Man” as its figurehead “because the Quaker faith projected the values of honesty, integrity, purity and strength”, [‘Quaker Oats website’, (FAQ 2009), www.quakeroats.com] (an early example of retail “identity theft’ to try to cash in commercially on the high regard, ethically, Quaker businessmen were held in).

تتتتتﭢ ت ﭢ تتتتتتتتتتﭢ ت ﭢ تتتتت

PostScript: Third World cocoa beans and the Quaker chocolatiers – an uncomfortable association
In the late 19th century the Cadbury brothers and other British chocolate-makers started exporting a large proportion of their cocoa beans from the islands of São Tomé and Príncipe (Portuguese West Africa)…by the turn of the century this amounted to 55% of Cadbury’s total supply of beans. Although Portugal had abolished slavery in its colonies, the rigid labour contract system which replaced left the African labourers working the plantations in a de facto slave status. This uncomfortable connexion of an ethical Quaker business to neo-slavery prompted one of the managing grandsons, William Cadbury, to commission an investigation of worker conditions in São Tomé and Príncipe in the 1900s. Cadbury eventually found an alternative source of cocoa beans (the Gold Coast) and organised a boycott of the two Portuguese plantations, but not before he had to fend off a spate of newspaper attacks on Cadbury’s alleging that it profited from the labour of slaves [‘William Cadbury, Chocolate, and Slavery in Portuguese West Africa’, (Lindsey Flewelling), 11-May-2016, https://britishandirishhistory.wordpress.com/2016/05/11/william-cadbury-chocolate-and-slavery-in-portuguese-west-africa/].

(photo courtesy of www.historyworld.co.uk)

⍓⍓⍓⍓⍓⍓⍓⍓⍓⍓⍓⍓⍓⍓⍓⍓

{a} the non-Quaker exception to this was Terry’s (established 1767, York, UK), famous for “Terry’s Chocolate Orange” and now owned by Kraft Foods

{b} the Quaker chocolatiers’ success was remarkably out of proportion to their numbers…with Quakers just one in fourteen out of a total UK population of 21M in 1851, they comprised >0.1% of the population [Jackson, loc.cit.]

{c} descendant and family historian Deborah Cadbury states that the Cadbury founder practiced a brand of “Quaker capitalism” that valued hard work and “wealth creation for the benefit of the workers, the local community, and society at large” [Cadbury, op.cit.]

{d} John Cadbury had a long connexion with the Temperance Society

{e} later with the move into making chocolate bars, what gave the Quaker confectionery businesses an added edge over rival manufacturers was their preparedness to invest in new, state-of-the-art machinery [Jackson, loc.cit.]

{f} the Cadbury village inspired the American non-Quaker Milton Hershey (a Pennsylvanian Mennonite in fact) to create his own ‘utopian’ village for his chocolate factory workers [Cadbury, op.cit.]

{g} a 1969 merger with soft drink giant Schweppes proved less enduring with the two partners demerging in 2008

{h} behind Mars, Hershey and Cadbury’s

{i} in recent years some brethren of the Quaker movement have objected to the way the company’s advertising depicts Quakers, ‘Quaker Oats Company’, Wikipedia, http://en.m.wikipedia.org]

Sainsbury’s, Caution and Quality in Business: A Sure but Steady Passage from Solitary Dairy Grocer’s Shop to a Major Supermarket Chain

Commerce & Business, Local history, Retailing history, , , , , , , , , , , , ,

Next year, Sainsbury’s, which has long maintained a place on the podium of Britain’s leading supermarkets will reach its sesquicentennial milestone – 150 years in the grocery retailing trade. Over the last 20-plus years the company has had to content itself with the runner-up position in the market leadership ladder of supermarket chains, trailing the seemingly ubiquitous and dynamic Tesco which has swept all before it. Nevertheless, Sainsbury’s has carved itself a distinctive and impressive notch among the titans of modern British retailing since it first opened for business in the Victorian era.

Foundation years, butter and establishing the Sainsbury style
In 1869 the newly wed John James Sainsbury, founded Sainsbury’s in partnership with his wife, Mary Ann Sainsbury (née Staples). The two opened their first dairy goods shop at 173 Drury Lane, Holborn (London). Mrs Sainsbury played an active role in the business, in the early years she effectively managed the Drury Lane shop, making it “famous for the quality of its butter”. As Sainsbury’s built its formative business reputation largely on product quality, Mary Ann (the daughter of a dairyman) insisted on fresh milk on the shop’s shelves, as well as, that the Dutch supplier of Sainbury’s butter date-stamp every unit item it supplied [‘The History of Sainsbury’s – Trying Something New for 147 Years’, (Darren Turner, 11 Nov.), www.s4rb.com]. The freshness and purity of Sainsbury’s butter gave it a commercial edge over the competition in an era known for widespread food adulteration (eg, it was a common practice for milk to be watered down) [Judi Bevan, ‘Battle of the Supermarkets’, RSA Journal, Vol. 152, No 5517 (June 2003)].

In the 19th century Sainsbury’s rivals in the grocery game were shops like Lipton’s and Home and Colonial Stores. Early on John J Sainsbury developed a business model which made the shops stand out from the other grocers by doing things differently. Appearance was important to Sainsbury, the shops were clean and hygienic, on offer were “high-quality products and fresh provisions at prices even London’s poor could afford” (an early shop slogan was “Quality perfect, prices lower”).

A gradualist approach to growth
John J Sainsbury, whose motto could well have been “Make haste slowly”✱, was in no hurry to expand the business. From the Drury Lane foundations he gradually added a shop in Kentish Town and then two more in the new railway suburb⊡. It wasn’t until 1882 that Sainbury made his first move outside London, establishing a shop in Croydon, one that specifically sought to cater for a middle-class clientele, selling comestibles which were in the luxury range (foreign cheeses, poultry and game birds, cooked meat delicacies, etc) [‘Sainsbury family’, (Bridget Salmon), Oxford Dictionary of National Biography, (23-IX-2004), www.odnb.com].

Even well into the 20th century century each new Sainsbury’s store was a matter of measured deliberation…the company continued “to place the highest priority on quality, taking the time to weigh each decision, whether it meant researching suppliers for a new product, assessing the reliability of a new supplier, or measuring the business potential of a new site” [‘J Sainsbury plc History’, Funding Universe, www.fundinguniverse.com].

During John J Sainsbury’s tenure in charge, the company established what was to become the Sainsbury’s “house style”, stores which were elaborately decorated in contrast with the other (typically drab) grocers of the day. The key to the company’s success was covering all of the bases…John James would price-match the competition while at the same time offering higher standards of quality, service and hygiene. Moreover, the likes of Home and Colonial and Lipton’s, while having numerically more shops, could not match Sainsbury’s range of products [ibid.].

Sainsbury’s “Own Brands”
Although “own brands” are thought of as a modern phenomena in retail merchandising, Sainsbury’s first introduced the concept as early as 1882! The shop’s first own brand was its staple commodity – butter. Sainsbury’s continued this practice and by the 1950s there was a host of such offerings on the shelves: ‘Sainsbury’s Cornflakes’, ‘Sainsbury’s Snax Biscuits’, ‘Sainsbury’s Cola’, ‘Sainsbury’s Peas and Carrots’, etc, etc. [‘The History of Sainsbury’s’, loc.cit.]. By 1980 half of the products Sainsbury’s sold were under its own label [Bevan, op.cit.].

Modernising Sainsbury’s
In 1950 Sainsbury’s refitted one of its earliest shops, in West Croydon, creating what was Britain’s first supermarket proper, one of the country’s earliest to operate as fully self-service. Some customers were at first put off by the innovation, thinking it impersonal and “anti-social”, however the convenience factor of not having to wait to be served eventually won out…Advertising and Marketing magazine reviewing the new store concluded: “From the point of view of the customer the chief advantages of self-service shopping are the speed with which shopping can be done and the ease with which one is reminded of things needed…these advantages substantially outweigh the disadvantages of not getting the personal attention of the assistant.” [‘Sainsbury ‘s return to site of first self-service supermarket’, (Graham Ruddick), The Telegraph (UK), 30-Aug-2013, www.telegraph.co.uk].

Although under its founder Sainsbury’s had been reluctant to get too big too quickly, once the company passed to his successor, son John Benjamin Sainsbury✫, the number of stores grew (though still at a trademark cautious pace). Under the strong leadership of a string of postwar CEOs (such as (John) Baron Sainsbury of Preston Candover), this trend was maintained❂.

Although Sainsbury’s followed a typically cautious approach to its business model, the company couldn’t be accused of dragging its feet when it came to embracing new technology. In the early Sixties they were the first retailer in Britain to develop a computerised distribution system and their stores were among the first to turf out electronic cash registers in favour of scanners in the late Eighties [‘J Sainsbury plc’, www.company-histories.com].

In 1973 the company went public under the holding co name J Sainsbury plc after being floated on the stock market. The 1970s witnessed increasing competition from discounters and a squeezing of profit margins, prompting an escalation in diversification…non-food items started to appear on Sainsbury’s shelves. It also innovated with the advent of ‘Savacentre’ hypermarkets and ‘Homebase’ house and garden centres. Overseas expansion was concentrated in the US – Sainsbury’s acquired Shaw’s Supermarkets, Giant Food Inc and Star Markets (its holdings in Shaw’s were unloaded in 2004).

Stumble and renewal
During the Nineties, Sainsbury’s, hitherto accustomed to being the premier supermarket chain, was relegated to second place by Tesco which became supermarket “top dog” in the UK in 1995. A change-up was required at Sainsbury’s and further diversification was sought. In 1997 the company ventured into in-store banking (in partnership with the Bank of Scotland – before going it alone in 2014). During this period the 130-year direct involvement in running the company of the Sainsbury family came to an end with the retirement of David (Lord) Sainsbury. The acquisition of Bells Stores in the early 2000s signalled a move into convenience stores, adding to the variety of its retail outlets.

Sainsbury’s – status quo in 2018 and future fortunes?
In the contemporary British retail landscape, Sainsbury’s, with a healthy slab of the market, is the second largest chain in the country✥ with ≻1415 stores (2017) and ≻186,900 employees (2018). Despite having long conceded first place to Tesco, this state of play is a fluid one…no longer dominated by the Sainsbury family (though it retains 15% of shares in the company), these days the majority shareholder is the Qatar Investment Authority (note comparisons with Harrods). 2018 has seen Sainsbury’s unearth a bold attempt to unseat Tesco’s hegemony through a planned merger with ASDA which would give the merged entity around 30-31% of the UK market – as against about 27.5% for Tesco (Source: Kantar). Approval of the controversial merger is still pending but could depend upon Sainsbury’s and ASDA offloading 463 of their stores to win over the competition ‘watchdog’ (CMA) [‘Walmart’s Asda agrees to UK merger deal with Sainsbury’s’, (Silvia Amaro) 30-Apr-2018, www.cnbc.com; ‘Sainsbury’s and Asda may have to offload 460 stores to seal merger’, (Sarah Butler), The Guardian, 28-Sep-2018, www.theguardian.com].

Footnote: A “leg-up” for UK supermarkets
As the age of postwar austerity and scarcity gave way to an era of abundance and growth in the 1960s, supermarket heavyweights like Sainsbury’s and Tesco led the way. The supermarket chains on their expansionary arcs was facilitated by legislative changes affecting the retail sector. The abolition of resale price maintenance (RPM)✧ by the British Board of Trade in 1964 was a total game-changer! RPM had allowed (especially large) manufacturers to dictate terms to retailers, the law change shifted the balance in favour of Tesco, Sainsbury’s and co, who now could lord it over even the largest of manufacturers like Unilever and Procter & Gamble [James Buchan, Review of Trolley Wars by Judi Bevan, The Guardian, 30-Apr-2005].

PostScript: How Tesco outmanoeuvred and outgunned Sainsbury’s
One of the key moves made by Tesco was to take careful note of what the older retailer was doing right (eg, offering quality in goods and service) and copying it! (in “Tesco-speak” this is called ‘benchmarking’ the opposition) [Bevan, op.cit.]. As Tesco grew incrementally it benefitted from a “virtuous circle” of business⊙. The sheer, monolithic size of Tesco allows it to buy merchandise more cheaply and accordingly sell it more cheaply. Ergo, they turn over more customers and make greater sales, and so the cycle is sustains itself [Buchan loc.cit.]. Tesco has a reputation for following intuitive hunches…being less risk adverse than other major supermarkets like Sainsbury’s it happily ventured into lower class, ‘brownfield’ areas that its competitors wouldn’t touch [Bevan, op.cit.].

—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧—‧
✱ Festina lente – the motto of Roman emperors Augustus and Titus, et al
⊡ a calculated, gradual approach to expansion suited John James who had a very hands-on management style, by temperament he was a “micro-manager”, immersing himself in the minutiae of the shops’ everyday transactions
✫ known for his focus on staff welfare and remembered by one of his senior staff as a “benevolent dictator”, [‘Sainsbury family’, loc.cit.]
❂ there have so many Sainsbury family members involved in the company, in British politics, in art patronage and philanthropy, to almost necessitate a scorecard
✥ although it briefly conceded second place to the Walmart owned ASDA in 2003/2004
✧ Resale price maintenance (or retail price maintenance) is a practice where the distributor agrees to sell at a price set by the manufacturer
⊙ a business scenario the Financial Times described as “hard to create, but (also) hard to disrupt”

Top Shelf Tesco, (Super)Market Leader: The Irresistible Rise of Britain’s Leading Grocer

Commerce & Business, Regional History, Retailing history, , , , , , , , , , , , , , ,

In the UK’s highly competitive retail world Tesco plc is the kingpin grocer, at the top of the tree of Britain’s supermarket chains. With over 3,400 stores across the UK and a presence in around a dozen countries worldwide✱, Tesco pulled in revenue in 2017 to the tune of £55.9B. The retailer’s origins though, way back at the end of the Great War, were of course much more humble. Like fellow high-flying UK retailer, Marks and Spencer, it began with one man and a market stall operation.

Jack Cohen got the business ball rolling in 1919 with a basic stall✥ in the Well Street Market, Hackney, London…for start-up capital Cohen (born ‘Jacob Kohen’) had a £30 stipend from his recent WWI service. From his barrow and stall operation, the antecedent of Tesco, the 21-year-old started off selling matzos (unleavened Jewish crisp bread) and other army surplus food he had purchased. On opening day Cohen made a princely £1 profit from a grand total of £4 in sales [‘A History of Tesco: The rise of Britain’s biggest supermarket’, by Tim Clark and Szu Ping Chan, The Telegraph, 04-Oct-2014, www.telegraph.co.uk].

Genesis of the business name
In the early days, a big-ticket item that Cohen sold was tea from T E Stockwell (in fact the first product sold by Cohen under the Tesco brand). From the Stockwell name Cohen simply took the first three initials ‘T E S’ and added the first two letters of his own name ‘C O’ on to the end of it – thus forming the business’s famous name, ‘TESCO’ (and unsold “Stockwell Tea” got repackaged and rebranded as “Tesco Tea”).

From North London to the nation
Cohen opened his first shop in Burnt Oak, near Edgware, North London, in 1931. Within a short period he had built the company headquarters and a central warehouse also in North London (Edmonton). The London retailer’s strategy was twofold – to expand by gradually buying out smaller grocery stores, and to buy the unsold merchandise other grocers couldn’t sell, which he would repackage and rebrand and then on-sell it to the public cheaper than anyone else (earning himself the nickname ‘Slasher Jack’) [‘Tesco UK, brief history and overview’, www.eeph.org.uk].

Cohen’s business motto, and therefore the company’s motto, was “pile it high and sell it cheap”, a straight-forward business philosophy of “low cost and high volume”✪ along the line of the large Woolworths chain. One of Cohen’s “bargain basement” product mainstays was ‘Snowflake’, a New Zealand canned milk which accounted (together with Tesco Tea) for much of the early Tesco sales [Sarah Ryle, The Making of Tesco: A Story of British Shopping (2013)]. By 1939 there were in excess of 100 Tesco shops all round the United Kingdom. Where Cohen chose to locate a Tesco, seems according to his daughter (the future Conservative MP Dame Shirley Porter) to have been something of an intuitive hunch. As she later explained, they’d be driving around town and “he’d suddenly say ‘this looks like a good place for a shop’ and he’d leap out and chat a few people up”. This was the very hands-on way Cohen would conduct market research [Ryle, op.cit.].

First with self-serve
Jack Cohen’s introduction to the idea of self-service grocery outlets came on a visit to the US in 1935…Cohen was initially not impressed. The immediate postwar period in Britain was characterised by a hike in wholesale costs of goods, which could not be passed on to customers due to the burdens of postwar austerity. Cohen made a return visit to the US at this time, accompanied by his son-in-law Hymon Kreitman who was enthusiastic about the American self-serve concept as typified by the pioneering Piggly Wiggly supermarkets. Cohen, influenced by Kreitman, eventually opened Tesco’s (and Britain’s) very first self-service shop at St Albans (Herts.) in 1948 as a way of countering the rising costs of commodities. Another first for Tesco was the first supermarket in the UK, opened in 1958, located in Maldon, Essex (it featured separate counters for meat, butter and cheese) [‘Jack Cohen (businessman)’, Wikipedia, http://en.m.wikipedia.org].

Maldon supermarket (interior) ⬇️

Expansionary growth
The 1950s and ’60s for Tesco was marked by unbounded expansion through the acquiring of many smaller grocery shops. Among the scalps of small retail outlets claimed by the burgeoning company were Burnards stores, Williamson’s shops, Harrow stores, Irwin’s shops, Charles Phillips’ shops and the Victor-Value chain (this last concern was unloaded by Tesco in the Eighties). Between 1955 and 1960 alone, Cohen bought over 500 new shops across the country [‘Tesco: How one supermarket came to dominate’, (Denise Winterman), BBC Magazine, 09-Sep-2013, www.bbc.com].

After Jack died in 1979 Tesco’s expansionary trajectory continued unabated…there was a hostile takeover of Hillards supermarket chain in 1987, the acquisition of William Low shops in 1994 gave them a greater market concentration in Scotland, as did the snaring of Associated British Foods three years later for Ireland and Northern Ireland. The Safeways/BP shops, and a move into convenience stores T&S Stores and Adminstore followed. The opening of Tesco’s Leicester “super-sized” store in 1961 made it, at that time, the largest grocery store in Europe. By the 1990s Tesco had overtaken Sainsbury’s as Britain’s largest food retailer. So extensive has been the spread of Tesco shops, it is thought that only one postcode in the entire UK – Harrogate in North Yorkshire – doesn’t have a Tesco in it! [Clark & Chan, op.cit.].

Diversifying Tesco
From the Sixties Tesco started to diversify in a big way! To the traditional staple of grocery lines were added clothing, books, furniture, software, internet services and in 1974 the sale of petrol. The Tesco Bank (financial services) was launched in a joint venture with the Royal Bank of Scotland, and later gained a foothold in the communications field with the advent of Tesco Mobile [‘Tesco’, Wikipedia, http://en.m.wikipedia.org].

Diversification also meant a dilution of Slasher Jack’s traditional retail philosophy of providing only the cheapest of the cheap. This change-up saw Tesco for the first time add upmarket quality items to its catalogues. The physical nature of Tesco’s retail outlets diversified during this period. To the standard supermarket format was added hypermarkets (called Tesco Extra) at one end of the spectrum, and “one stop” shops/neighbourhood convenience stores (Tesco Express) at the other. In between these polarities were Tesco Metro and Tesco Superstores. Such market manoeuvrability by Tesco has drawn praise from business analysts – Citigroup’s David McCarthy acknowledges Tesco’s capacity to “appeal to all segments of the market” [‘Tesco: Supermarket Superpower’, (Hannah Liptrot), 03-Jun-2005, www.bbc.com]. It has also been (reluctantly) commended by a critic of the grocery Goliath for its “clinical efficiency with which it carries out its business plan” [Andrew Simms, Tescopoly: How One Shop Came Out on Top and Why it Matters, (2007)].

Tesco Malaysia

Internationalising Tesco
Inevitably, growth and profitability at home meant external expansion for Tesco, a move towards globalisation. The company acquired various overseas market footholds with majority stake holdings in established Turkish supermarket chain Kipar and in Polish Leader Price wspanialy-rynki (supermarkets), among others. The overseas results however have tended to fall well short of Tesco’s stellar domestic performance. A 2006 move into the US market with the Fresh & Easy chain was unsuccessful, resulting in a £1.2B loss and in 2013 Tesco completed their pull-out from North America [‘Wikipedia’, op.cit.].

Inverness high street

Too big, too damaging?
The phenomenal retail success of Tesco ⌖ is encapsulated by the popular phrase in Britain, “£1 in every seven went into a Tesco till!” Inverness in the Scotland Highlands (known locally as ‘Tesco Town’) personifies the dominance of Tesco – 50p in every £1 spent on food, it is calculated, is derived from one of Tesco’s three shops in the northern city [Liptrot, loc.cit.; ‘The supermarket that ate a town’, (Lorna Martin), The Guardian, 01-Jan-2006, www.theguardian.com]. Other cities and towns across the UK share Inverness’ concerns of urban domination by the retailer…Seaton in Devon’s east is staring at the prospect of becoming another “Tesco Town”. Tesco has flagged plans to build a superstore, hundreds of ‘Tesco’ homes and a hotel in the small town, triggering determined local opposition to the scheme [‘This town has been sold to Tesco’, (Anna Minton), The Guardian, 05-May-2010, www.theguardian.com].

Ultimately, it is Tesco’s size that courts the company’s most strident criticism and opposition. Increasingly, the sheer size and scale of the supermarket empire gives it a disproportionate degree of bargaining power with manufacturers. Since 2000 the British authorities have sought to address the uncompetitive nature of the status quo, a code of practice was enacted in that year to try to curb Tesco’s (and other large retail players’) market dominance to the serious detriment of small traders in the UK (the National Consumer Council has described Tesco as “the Marmite of British business”). Interestingly, consumer surveys in the UK point to the consumer public’s “Janus-headed” take on Tesco, it ranks as both the “most trusted” and the “least trusted” of companies in the country! [David Gray (Analyst, Planet Retail), quoted in Winterman, op.cit.]. The recent Tesco takeover of Booker Wholesale Group (2017/18) for £3.7B, given the green light by the UK’s competition watchdog (CMA), has however provoked widespread disquiet within those in British society concerned at what they see as yet another monopolistic move for the retail behemoth [‘Tesco’s £3.7bn Booker takeover waved through by competition regular’, (A Armstrong & J Torrance), The Telegraph (UK), 20-Dec-2017, www.telegraph.co.uk].

Ripples in the Tesco ocean
The hostility of small retailers at Tesco’s strangulation of competition in the supermarket field❅ is not the only discordant note in Tesco’s recent history. Its high public profile has prompted at least two attempts at extortion using the threat of letter bombs…in 2000-2001 an individual tried to extort £5M from the supermarket giant (he was subsequently caught and jailed for 16 years); later a former tax inspector demanding £1M from Tesco, tried the same method (also apprehended and imprisoned). Tesco has tended to court controversy on occasions, eg, quantities of horsemeat were discovered in burgers and spaghetti sold by Tesco, and of course almost a by-product of runaway commercial success, there has been a slew of charges over the years that Tesco was engaging in tax avoidance schemes, tax minimisation, etc. Tesco was heavily criticised by the CEO of UNICEF UK in 2009 for appropriating the children’s charity’s slogan “Change for Good” and crassly using it for commercial advantage in company advertising [‘Unicef accuses Tesco of misusing charity slogan’, (Marie O’Halloran), The Irish Times, 25-Jul-2009, www.irishtimes.com]. As well there have been isolated incidences of individual Tesco shops discriminating against blind people (especially barring entry) [‘Tesco’, Wikipedia, op.cit.]. Tesco’s corporate response after such periodical outbreaks of bad PR has been to launch charm offensives aimed at the public (such as its “Good neighbour” policy in the 2000s) [Simms, loc,cit.].

Until very recently Tesco has experienced seemingly unstoppable success. However things troughed for the retailer during financial years 2013-14 and 2014-15, in the latter year Tesco lost £6.4B, its worse fiscal performance in 20 years! [Clark & Chan, op.cit.]. Since then the supermarket chain (boosted by acquiring the Booker cash and carry group) has to no one’s surprise bounced back, in 2018 recording its strongest growth in seven years (UK and Irish sales rose 3.5%). It has also just introduced Jack’s stores which it hopes will wrest back losses in the discount store market from front runners, German supermarket heavyweights, Aldi and Lidl [‘Tesco posts highest growth in seven years’, (Sarah Butler), The Guardian 15-Jun-2018, www.theguardian.com].

PostScript: Tesco to (super)market leader
What makes Tesco a cut above its rivals? Enormity of size and utter ruthlessness and aggression in business dealings has been a factor, but according to some observers, the key to its success has been its ability to read customer behaviour: going way back Tesco has been meticulous about collecting raw data on what consumers were buying, invaluable information for anticipating future patterns, staying ahead of the curve! Tesco introduced loyalty schemes, personalised discounts and rewards for its customers, above all the Tesco Clubcard (“Every little helps”) – the card was an immediate hit, within a year of its debut (1995), Clubcard holders were spending 28% more at its stores and Tesco was number 1 with a bullet in the rankings of British grocers [Winterman, loc.cit; ‘The card up their sleeve’, The Guardian 19-Jul-2003, www.theguardian.com].

〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦〦

✱ including stores in Ireland, Poland, Hungary, the Czech Republic, Slovakia, Malaysia, India, South Korea, Japan, Taiwan and Thailand (and previously in the US)

✥ his bottom-of-the rung beginnings in the world of retail merchandise was as a barrow boy

✪ to which he added an internal one, actually a motivational pitch for sales staff, “YCDBSOYA” (You Can’t Do Business Sitting On Your Arse”) [‘Shirley Porter: Rich, flashy and corrupt with it. She’s nothing like a Dame’, (Sean O’Grady), The Independent, 16-Dec-2001, www.theindependent.co.uk]

⌖ fifth biggest grocery chain in the world, biggest UK retailer by sales, biggest UK employer (>330,000 staff) [Winterman, loc.cit.]

❅ for instance, the Office of Fair Trading investigated the company for allegedly forming a cartel of supermarkets (with Safeway, Asda, Morrisons and Sainsbury’s) to fix the price of dairy products

Marks and Spencer: From a Kirkgate Penny Bazaar to London High Street Heavyweights

Commerce & Business, Local history, Retailing history, , , , , , ,

Before the principals of Marks and Spencer teamed up, the entity was singular, just the one aspiring retailer, Michael Marks, and of material necessity he started very small. A late 19th century immigrant refugee from the Russian Empire’s Byelorussian region, Marks launched his first penny bazaar stall in Central Leeds’ Kirkgate Market with start-up funding amounting to one £5 note – which he had borrowed! Marks met his future partner at this time, Thomas Spencer, and eventually went into business with him after the latter, a Yorkshire cashier, invested £300 for a half-share in what became Marks and Spencer✱.

Early days: Establishing a chain of “penny bazaars”
Michael Marks kicked off with a very basic business model: his initial stall in Leeds was a “one penny stall”, hence the business’ motto, “Don’t ask the price, its a penny”⊡. The early stall commodities focused on household goods, haberdashery, toys and a sheet-music business (note the early spelling of the store name with an errant plural ‘s’ in ‘Spencer’ in the photo at left). Marks (the more dynamic and “hands-on” of the partners) immediately set about expanding the business, first up establishing a shop in Manchester. By 1894 Marks and Spencer had graduated to a permanent stall in Leeds’ covered market (in 1904 they opened their first Leeds shop) and in 1901 concentrated its open market operation in Birkenhead on Merseyside.

Forging a regional retail identity
The two partners initially focussed locally, concentrating on Yorkshire and Lancashire, a new warehouse in Manchester (1897) became the early centre of the M&S business empire which numbered 36 branches by that time…the firm accumulated stalls (later on, shops) in towns and cities across the North of England (Manchester, Liverpool, Hull, Sheffield, Middlesbrough and Sunderland) as well as further south (Birmingham, Bristol, Cardiff, Swansea, etc) [‘The History of Marks and Spencer’, (h2g2, 2008/2012), www.h2g2.com].

Spencer
Marks

By the early 1900s Marks and Spencer was starting to yield a very tidy surplus, becoming a limited company in 1903. At this juncture Thomas Spencer decided to cash in and retire from the partnership with a nice “nest egg” of £15,000 (for his initial outlay of £300) [‘Thomas Spencer (Marks and Spencer)’, Wikipedia, http://en.m.wikipedia.org]. Sadly for both Spencer and Marks, neither got to enjoy their monetary success long – Spencer died in 1905, followed by Marks in 1907. Nonetheless the prestigious company name has long outlived the two founding principals, thriving into the 21st century.

The end of “British-only” and “home-brand only”
In the early 20th century M&S, entering into long-term relationships with British manufacturers, emphasised a policy of selling only British-manufactured goods, clothes and food were sold under the famous “St Michael” brand (named after founder Michael Marks). The fluctuating commercial fortunes of the company in the 1990s led to M&S relenting somewhat on this policy.

Textiles and food
By the Twenties M&S had moved into the sale of textiles in a big way (launching its own laboratories to commercially produce new fabrics for the British market). In 1931 it added food to its portfolio of products…M&S’s own food technology department (from 1948) allowed it to offer chilled poultry to customers, instead of the hitherto frozen or pre-cooked options (courtesy of a new technology it called “cold chain distribution”) [‘What 130 years of M&S history can teach us about innovation”, (Hannah Jenkinson, 2018), www.about.futurelearn.com].

By the 1960s these two commodities, textiles and food, were firmly ensconced as the staples of Marks and Spencer. M&S were forerunners in introducing retail practices that enhanced customer satisfaction, such as the “money-back, no questions asked, no time limit” policy.

Marble Arch – M&S flagship store ⬆

In 1930 Marks and Spencer established itself in the United Kingdom’s financial capital, opening a mega-sized London store at 458 Oxford Street, W1. The Marble Arch store which was to become the company’s flagship store, would go on to compete with those other leading retailers of quality merchandise already with abase in Oxford Street, Selfridge’s and John Lewis’. Marble Arch wasn’t in fact M&S’s first retail outlet in London, that honour went to the one in nearby Edgware Road (which is actually closer to the Marble Arch monument than the Marble Arch M&S!). The Edgware Road store began as a penny bazaar in 1912 with additional floors added in the 1920s. During World War II the building was damaged by German incendiary bombs (as was Marble Arch tube station in an earlier Nazi air raid). In 1959 the original store at Nº228 Edgware Road was closed and replaced by a new, much bigger store at 258-264 Edgware which opened just six days later [‘The History of Marks & Spencer Edgware Road’, (Jan. 2017), www.marble-arch.london].

Nº228 Edgware (Source: M&S Co Archive) ⬇

M&S shift of strategy in an increasingly volatile retail market
At the turn of the 21st century Marks and Spencer’s prospects appeared fairly sanguine…in 1998 it became the first British retailer to achieve a pre-tax profit of over £1B.

But in the first decade of this century, M&S, sensing the need to compete for more of the market, made some seismic changes. The standard–bearer St Michael’s brand was dropped, other longtime lines were rebranded. The company moved away from its emphasis on “British quality goods”, starting to sell big-name grocery lines like Marmite, Kellogg’s Corn Flakes and KitKats in its stores [‘Marks and Spencer to start selling top brands’, (G Hiscott), The Mirror (UK), 04-Nov-2009, www.mirror.co.uk] (previously it had concentrated on ‘luxury’ food products exclusively). This marks the recognition by Marks and Spencer that the falling trend of clothing sales needed to be heavily supplemented by popular food items.

Marks and Spencer (colloquially and affectionately known on the street as “Marks and Sparks”) as at April 2017 could list a total of 959 operating stores across the UK✣, 615 of which traded in food only (the “Simply Food” label), evidence of how food products had come to prop up the other traditional areas of the business. Future prospects for the major British retailer remain somewhat nebulous after the company signalled in 2018 its intent to close around 100 M&S stores in the country by 2022. Retail finance watchers have also questioned, with such a reliance on food items, whether M&S can ultimately match it with the UK’s food and groceries powerhouse Tesco [‘M&S online food delivery service will be no piece of cake’, Robert Plummer, BBC News, 28-Apr-2017, www.bbc.com]. Still, Marks and Spencer remains in majority British hands (unlike its rival heavyweights Harrods and Selfridges).


⬆ Commemorative M&S clock in Leeds market

━━━──━━━━──━━━━──━━━━──━━━━──━━━━──━━━
✱ the foundation date for the company is traditionally given as 1884, however the exact date the partnership began between Marks and Spencer seems conjectural – other candidates are from 1894 (the Leeds permanent stall) or from 1901 (the Birkenhead market)
⊡ product inexpensiveness was not to stay the M&S catch cry – by the late 1920s Simon Marks (the founder’s son who had assumed the reins) placed a 5/- limit on items. Long before this M&S had made the store focus one of quality over cheapness
✣ plus over 200 overseas stores in at least 40 countries

John Lewis, Senior and Junior: A Contrast in Pathways Up the Retailing Ladder

Biographical, Commerce & Business, Local history, Retailing history, , , , , , ,

The path taken by John Lewis in scaling the heights of retail commerce was typical of many embryonic and aspiring owner-drapers in mid-Victorian Britain. Somerset born and raised, Lewis started his first modest shop in Nº132 (later re-numbered) Oxford Street, London, in 1864 (taking the sum of 16s & 4d on opening day). His first twenty years in business for himself were far from glamorous, a period dominated by hard and dreary ‘yakka’ and slow piecemeal accumulation and consolidation.

The tortoise approach – slow and steady
Lewis took a conservative, uncomplicated (“keep it simple”) approach to retailing and only slowly moved his lines from silks, woollens and cotton fabrics to dress fabrics and clothing and later to furnishing fabrics and household supplies like China and ironmongery (but never food!). His philosophy was sell cheap and no ads (for nearly a century the John Lewis company continued a practice of minimal advertising!)✱. Unsurprisingly for a man described as “a Victorian curmudgeon” [‘John Lewis (1836-1928)’, Geoffrey Tweedale, Oxford Dictionary of National Biography, 06-Jan-2011, www.oxfordnb.com], his management style was rigidly autocratic, he often had abysmally poor relations with his staff and was prone to effecting arbitrary and sometimes wholesale dismissals. In 1920 Lewis’ “pig-headedness” and anti-union stance triggered deleterious industrial conflict…in 1920 the unaddressed grievances of Lewis’ shop-girls led to a strike by 400 staff. Lewis simply sacked the strikers and replaced them, but his arbitrary action brought him discredit and caused commercial ruptures adversely affected the company’s competitiveness vis-à-vis its retailing rivals in the long-term. ‘How John Lewis was the original store wars: As the retail empire celebrates 150 years, we tell its fascinating story’, (Brian Viner), The Daily Mail (UK),, 04-Jul-2014, www.dailymail.co.uk]

ef=”http://www.7dayadventurer.com/wp-content/uploads/2018/11/image-1.jpg”> Flagship store 1939 (Source: John Lewis Memory)[/cap
Lewis adopted an habitually “penny-pinching” stance when it came to running the store’s finances. In this he was the diametrically opposite of his Selfridges contemporary, the ostentatious, big spending, big advertising Harry Gordon Selfridge. In the eyes of Lewis, Selfridge must have seemed absolutely criminally profligate! Nonetheless Lewis did earn “brownie points” with London consumers for his straight dealing and commitment to the purveyance of quality goods, and profits grew accordingly. Sales for the ‘John Lewis’ stores rose from an underwhelming £25,000 in 1870 to a commendable £921,000 in 1921.

http://www.7dayadventurer.com/wp-content/uploads/2018/11/image-2.jpg”> Peter Jones[/caption
Another instance of Lewis’s circumspect approach was his reluctance to expand the business. It was not until 1906 that he made a move in this direction, purchasing the ailing Peter Jones store in Chelsea after the death of the store’s original Welsh owner✧. During his long lifetime John Lewis made no further expansionary attempts. The company during this period was clearly hamstrung by a lack of dynamic vision under its founder – losing vital retail ground to the likes of Whiteleys and Owen Owen [Tweedale, loc.cit.].

Father v son
Lewis’s innate caution also showed itself in his hesitancy in passing even a portion of control of the firm over to his sons, especially his eldest son John Spedan Lewis. When Lewis’s sons came of age, he gave them a limited role only…Spedan (as he was universally called) was put in charge of the newly acquired Peter Jones store (presumably to keep him from interfering with the central operation of the business). Spedan increasingly clashed with Lewis Senior over their fundamentally different approaches to business, with Spedan in charge of Peter Jones and JL Senior holding sway in Oxford Street HQs, relations between father and son deteriorated alarmingly (characterised in some quarters as equating to intra-family “store wars”) [Viner, loc.cit].

After the founder’s death in 1928 Spedan was free to fully implement his more progressive management ideas – in the area of staff relations these were often light years away from his father’s outmoded views and intransigent bellicosity…once at the helm Lewis Junior started by cutting working hours and introduced tea-breaks for the staff…Spedan envisaged further, more radical, plans for modernising ‘John Lewis’ and propelling it forward in the Thirties.

Under Spedan’s watch – JLP up and away!
Spedan wasted no time in taking ‘John Lewis’ in a very different direction to his late father’s ultra-cautious, steady-as-it-goes approach. In 1929 he reformed the enterprise into a public limited company, John Lewis Partners (JLP). Staff were rebranded ‘partners’ and made shareholders in the firm. Spedan diversified and pursued an expansionary route that Lewis Senior had so long doggedly eschewed. Smaller, less profitable chains were acquired – from 1933 on Spedan widened the John Lewis Partnership dramatically, adding purchased stores for the first time outside of London – Nottingham, Weston Super-Mare, Portsmouth and Tyrrel, Southampton, etc. [‘The 1930’s; a period of growth’, (Johnathan Blanchford), (‘John Lewis Memory Store’), www.johnlewismemorystore.org.uk]. One of JL Junior’s ideas was to create a chain of John Lewis hotels, and to supply these hotels he bought a chain of grocery shops, known as Waitrose, in the Thirties. Waitrose proved a spectacularly profitable acquisition for John Lewis’⊛. As of 2016 there were some 353 Waitrose supermarkets across the UK, collectively worth more than £1B (one of only five such successful food and drink brands in Britain) [‘Waitrose’, Wikipedia]http://en.m.wikipedia.org.

In the Forties John S Lewis bought up some of the failing Selfridge business concerns after the former high-flying company plummeted and Harry Selfridge was forced out to pasture and into retirement. Other (overseas) business moves into South African draperies however turned out to be unsuccessful ventures [‘John Lewis’, Wikipedia, http://en.m.wikipedia.org].

▼ Spedan Lewis

Although Spedan was less autocratic, and certainly less confrontational✣, than his father, he was no democrat when it came to running the John Lewis business empire. Some observers (including insiders), recognising an inherited family trait, saw Lewis Junior as a “my way or the highway” type of business leader. Recollections of some ex-staff and associates point at a Spedan inclination to public losses of temper and the arbitrary and unfair treatment of staff on occasions, with a suggestion of a peculiar bias against staff (including managers) with ginger hair [‘Memories of Spedan – not all sweetness and light’, (Margaret Cole), (‘John Lewis Memory Store’), www.johnlewismemorystore.org.uk].

Today JLP remains an employee-owned British company (consistent with the “worker-cooperative” entity (the ‘Partnership’) as initiated by Spedan Lewis in 1929). According to the Sunday Times it is the third largest private UK company by sales – £3.78B revenue in 2017 [“The Sunday Times HSBC Top Track 100 league” (2016)]. As a retail operator JLP maintain its traditional market position as a chain of high-end✫ department stores⊡, competing with its historic, equally upscale rivals in the merchandising field, Harrods and Selfridges.

FN: the corporate colours of retailing
John Lewis’s store colours have traditionally been green and white – supposedly because Spedan Lewis wrote his memos exclusively in green ink (the auditor’s colour!) on white paper [Tweedale, loc.cit.]. Interestingly, green seems to be the preferred colour of successful London-based retailers…Selfridges’ salient business colour is also green, and both Harrod’s and Marks and Spencer’s traditional hues are green and gold.

2013: John Lewis presence in Westfield’s Shepherds Bush mall ∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸∸
✱ the John Lewis motto (dating from 1925) characteristically is “never knowingly undersold”
✧ the sale was the stuff of legend in London retailing – Lewis reportedly walked the distance from Oxford Street to the Sloane Square, Chelsea, Jones premises, with bank notes in his pocket to the value of £20,000 to complete the purchase in person. Today, Peter Jones is the ‘posher’ sibling of the John Lewis store
⊛ Waitrose is an upmarket grocer in line with the general emphasis of John Lewis merchandising
✣ JL Senior’s quarrelsome, confrontational nature was often fraught with consequences – a protracted turn-of-the-century legal dispute with Lord Howard, Baron de Walden, saw Lewis being sentenced to three weeks in gaol in 1903 for contempt of court [‘How John Lewis ended up in prison. A new century same old Mr Lewis’, (J Blanchford), (‘John Lewis Memory Store’), www.johnlewismemorystore.org.uk]
✫ a monumental departure from the early days of JL Senior’s “sell cheap” strategy
⊡ currently around 30 JL stores in England, Scotland and Wales and concessions in the Republic of Ireland and Australia

The Selfridges Story: The Making and Unmaking of Harry (or Several Lessons in Cultivating Customer Satisfaction)

Biographical, Built Environment, Commerce & Business, Local history, Retailing history, Travel, , , , , , , , ,

“People will sit up and take notice of you if you will sit up and take notice of what makes them sit up and take notice.”
~ HG Selfridge

⊹⊹⊹ ⊹⊹⊹ ⊹⊹⊹

Before I ever visited the UK I wasn’t at all familiar with Selfridges. I knew about Knightsbridge and Harrods and its preciously preserved pedigree all right…we’ve done that! My first time in London I was on a bus travelling (make that crawling) down Oxford Street heading towards the West End when I was enlightened as to the existence of the second-best known upmarket London department store. As the bus idled stationary I spotted a sign in front of a building that said ‘Selfridges’, my first thought, I remember, was “strange name!”…but when I think about it now I vaguely recall that I had previously heard the name Selfridges, but without inquiring further at the time I sort of formed the literal impression that it was a store as the name sounded that “sold fridges”, ie, a purveyor of domestic white goods! So when I did eventually get my beak inside the store’s doors at 400 Oxford Street I was surprised to see lines and lines of (pricey) fashion wear, shoes, accessories, skin care products, bags and more – but not one refrigerator in sight! (in its time it has apparently sold most everything!)

Even without visiting Selfridges’ flagship Oxford Street store, you may well be aware of it or of its US-born founder Harry Gordon Selfridge thanks to the recent ITV television series Mr Selfridge (first aired in 2013). The series was a period drama about the flamboyant, visionary retailer and the interactions that take place around him in his eponymous London department store✱.

A Marshall Field blueprint for London
Wisconsin-born Harry Gordon Selfridge initially earned his business ‘spurs’ working for Chicago department store Marshall Field & Company (right), this segued into him purchasing his own department store in Chicago. In hardly any time at all the mercurial Selfridge abruptly re-sold the business, making a quick profit and retired to play golf. In 1906 while holidaying in London, Selfridge sensed a new retail opening for his entrepreneurial talents in the British capital. For £400,000 he purchased land and surrounds for a novel custom-built, mega-department store in the then unfashionable, western end of Oxford Street [‘Harry Gordon Selfridge’, Wikipedia, http://en.m.wikipedia.org].

“The American Invasion of London”
The London press was not initially warm to the notion of the American’s incursion into the world of London commerce. The City’s daily and drapery trade press described it as an “American Invasion of London” [Lawrence]. Selfridge’s loud in tone and bombastic approach to selling the project didn’t help in endearing him to the newspapers (described in some publications as being “aggressively big in scale”). Selfridge’s efforts to make the store a reality were driven by an unwavering vision: creating a “monumental retail emporium” was in his eyes the key to elevating “the business of a merchant to the Dignity of Science” (as he grandiosely put it). Selfridge believed to achieve that, he had to construct a gigantic “technologically advanced department store”, hence the massive amount of money, time and effort he put into the project [LAWRENCE, J. (1990). ‘Steel Frame Architecture versus the London Building Regulations: Selfridges, the Ritz, and American Technology’. Construction History, 6, 23-46. Retrieved from http://www.jstor.org/stable/41613676].

A ground-breaking, landmark modern steel-framed building
Construction of the Selfridge store was something of an architectural coup in itself. It won praise in its day from British building journals for its innovative construction methods…built with steel frames and reinforced concrete allowing for much narrower than usual walls, the frames permitted a far greater window area, so very large plate-glass windows could be installed (12 of which were the largest sheets of plate-glass then in the world!) – making for much more interior natural light and brightness (designed by famed US architect Daniel Burnham and associates). Originally comprising a 250′ x 175′ site, Selfridge’s had nine Otis passenger and two service lifts and six staircases. 100 separate departments were spread out over eight floors. While the physical construction of the Oxford Street store took only 12 months, Selfridge had first to overcome London City Council’s raft of objections (unprecedented size of the commercial structure, fire danger, etc). Selfridge and his engineers’ lobbying of the LCC Committee eventually resulted in the passing of two local building acts – LCC (General Powers) Acts of 1908 and 1909 – necessary for the Oxford Street project to be completed [Lawrence, ibid.]☯.

Rigid building regulations weren’t Selfridge’s only impediment to making his dream store a reality. Half-way through the project funding became a pressing issue when his partner and main backer Sam Waring, frustrated by Harry’s “grandiose and reckless approach” to the venture (Selfridge had grievously underestimated the complications of the project), withdrew his financial backing. The economic downturn in London (and in the US) at the time made alternative sources of funding a very grim prospect, and disaster was only narrowly avoided when a new backer, millionaire tea tycoon John Musker stepped in to rescue Selfridge [Gayle Soucek, Mr Selfridge in Chicago: Marshall Field’s, the Windy City and the Making of a Merchant Prince, (2015)]. After the big opening Selfridge remembered to make sure the store’s product lines included everything to do with tea-making (teapots, cups and saucers, sugar bowls, etc) [‘Selfridges: 7 things you (probably) didn’t know about the department store’, (History Extra), www.historyextra.com].

Selfridge, customer-centred strategies ahead of the curve
Harry’s approach to retailing was characteristically innovative on many fronts. Selfridge placed tremendous faith in advertising, the 1909 campaign leading up to the store’s opening cost a reported $500,000 in 1909 money [‘Selfridge Dies: Ripon Lad Who Jolted Empire’, The Milwaukee Sentinel, 9-May-1947 (online fiche)] (Britain’s biggest ever ad bill to that point) and he used it imaginatively together with ingenious publicity campaigns. Selfridge was the first retailer to make popular the idea of “shopping for pleasure”, rather than it being solely a functional task undertaken for necessity (as people conceived of it prior to Harry’s advent). In-store activities and arrangements often were original and novel (eg, displaying the monoplane used by aviator Louis Blériot in the first cross-English Channel flight at Selfridge’s (1909)✜). Another interest-generating feature in the store was Logie Baird’s television prototype shown on display in 1925.

Those specially designed wide windows were put to optimal use, Selfridge was the first to utilise window dressing where he could show off the latest fashions and utensils in open display [‘Selfridges 7 things’, loc.cit.]. The staff at Selfridge’s Oxford Street store (initially comprising 1,400 employees) were instructed to assist customers in their purchases, not to pester or use any “hard-sell” tactics on them⊟. Harry’s philosophy was “first get them in, then to keep them there. Thereafter they would buy” (Woodhead). One of Selfridge’s more forward-thinking moves was to locate the goods where they were visible and accessible to customers all around the store’s interior (a practice he devised while at Marshall Field’s in Chicago), rather than hiding them away from sight under counters (as had been the practice in most retail stores hitherto). He also introduced the concept of the “bargain basement” to retailing, a section where shoppers could find regularly discounted commodities [‘Innovation Lessons From The World’s First Customer Experience Pioneer — Infograph’, (Blake Morgan), Forbes Magazine, 26-Jun-2017, www.forbes.com ; Lindy Woodhead, Shopping, Seduction & Mr Selfridge, (2012)].

A visceral, holistic experience
Selfridge’s vision was to make the department store more than just a shop where you went to buy goods, he continued to introduce new features to Selfridges…elegant (moderately priced) restaurants, a library, reading and writing rooms and special reception rooms for French, American and ‘Colonial’ clientele. There were cookery demonstrations in the kitchenware section. All this marked a radical departure from the practices of other department stores which employed floorwalkers to ‘shoo’ people out of the store who were just hanging around and not actively engaged in buying an item! Even the store’s roof was put to productive if curious usage (a shooting range for an all-girl gun club as well as an ice rink✧) [Lawrence, loc.cit.].

The female shopper as an identified demographic
Selfridge saw the role of the department store in macrocosmic terms – “the store should be a social centre, not merely a place for shopping”. Unlike the conservative establishment of the day and much of the mainstream, Selfridge endorsed the Suffragette Movement…the new store was (in part) “dedicated to woman’s service”. In a 1913 advertisement Selfridge described the store thus: Selfridge and Co: The Modern Woman’s Club-Store” [‘Suffrage Stories/Campaigning for the Vote: Selfridge’s and Suffragettes’, Woman and her Sphere, (Elizabeth Crawford), 16-May-2013, www.womanandhersphere.com; ‘Selfridge Lovers: The Secret behind our house’, www.selfridge.com]. Astute businessman that he was, Harry popularised shopping as a leisure activity specifically for women…to make it a more welcoming and conducive place for them to spend time (and money!), he displayed freshly scented floral arrangements and had open vistas in the store, he employed musicians to perform and added beauty and hair salons (Paris-inspired) and art galleries. And he introduced public restrooms for women to the store (the first time ever done!)❅
[Forbes, loc.cit.].

The H.G.S. leadership style
As retail magnate go, Selfridge went against the grain for his day by not being an authoritarian business leader. He was temperamentally inclined towards fairness with regard to remuneration, increasing the wages of his staff, elevating them above “wage slavery”, treating them as employees as opposed to ‘servants’ (cf. Harrods) [ibid.]…not to overstate it, Selfridges shop floor staff were still exposed to long, long hours of drudgery but they were paid a livable wage for their arduous labours. A sample of the quotes attributed to Selfridge reflect his anti-dictatorship approach to business and interpersonal relations: “The boss drives his men, the leader coaches them” ; “The boss depends on authority, the leader on good will” ; “The boss says ‘I’, the leader says ‘We'” ; “The boss inspires fear, the leader inspires enthusiasm” ; “The boss fixes the blame for the breakdown, the leader fixes the breakdown” ; etc.✥ [‘Harry Gordon Selfridge’, Wikipedia, op.cit.]

Tower folly
Selfridge’s thrived, prospered and grew after the Great War (the store size doubled). Things didn’t always go the Wisconsin-born retail magnate’s way however…a couple of commercial reversals suffered by Harry during the decade concerned his plans for erecting a massive tower from the building which was rejected by the LCC Committee because of excessive height, and possibly also because it would have vied with the iconic St Paul’s Cathedral for attention (a fortunate outcome perhaps as the model drawings for the tower suggest the result would have been an incongruous coupling of architectural forms and a hideous eyesore!) [Lawrence, op.cit.]. The other setback was Selfridge’s proposal for a tunnel between the store and the nearest tube station, Bond Street, the plan ultimately got kiboshed!

Harry on the downslide
By the late Twenties Selfridge & Co was at the top of its game, the name was synonym with quality merchandise and Selfridge took its place as a stellar institution on the London commercial scene. Some time after the onset of the Great Depression things started to turn badly pear-shaped for Selfridge, as for businessmen as a whole. Harry Selfridge contributed to his own decline however by persisting in his flamboyantly extravagant spending. He squandered money on his womanising ways for which he earned a certain notoriety, for instance, $4M was wasted on his dalliances and affairs such as with the Dolly Sisters (Hungarian jazz dancers) – a part of his story that the TV series was quick to focus on) [Forbes, loc.cit.. By 1940 the company owed £250,000 in taxes and Selfridge was deep in debt to the bank, forcing him to sell out and retire from the business (retaining a modest annual consultancy stipend) [‘Harry Gordon Selfridge’, Wikipedia, op.cit.; Milwaukee Sentinel, op.cit]

Selfridges’ Birmingham Bullring store ▼Selfridges post H.G.S.
Selfridge & Co’s reversal of fortunes signalled a move from its circling competitors…rival department chain John Lewis & Partners acquired some of Selfridges’ provincial stores in the Forties, which was a preliminary move to John Lewis’ eventual takeover of the flagship Oxford Street store (1951). In turn John Lewis was itself acquired by the Sears Group in 1965. Its current owners, the Anglo-Canadian Galen Weston company bought Selfridges in 2003 for a reported £598M. Today the store name ‘Selfridges’ survives on the Oxford Street building, and in the three other regional branches in the counties (Trafford Centre and Exchange Square, both in Manchester, and the Bullring in Birmingham).

FN: Harry Selfridge from when he first arrived was perceived widely as a Trans-Atlantic “blow-in”, splashing his (and his wife’s) money around, vociferously determined to show the established home-grown retailers what a ‘superior’ type of modern department store looked like. Selfridge displayed a talent for polarising opinion…to his dazzled admirers he was “the Earl of Oxford Street”, the flashy Midwest American merchant was “as much a part of the sights as Big Ben” (as one columnist waxed lyrically), but to his detractors (including many of his competitors and much of the London press) he was merely a “vulgar American tradesman” or worse [Milwaukee Sentinel, loc.cit ; Woodhead, op.cit.].

PostScript: ‘Selfridges gets Sixties hip
In 1966, Selfridges, by now under Sears Holdings boss Charles Clore, recognised the youth market with a separate outlet for young women, Miss Selfridge (forming a link back to Harry Selfridge’s traditional focus on female customers). The new store in Duke Street signalled Selfridges’ wholesale embrace of the Sixties’ fashion revolution. Miss Selfridge used mannequins based on the straight line form of 1960s iconic model Twiggy and sold the latest in Mary Quant and Pierre Cardin fashions. In the early 2000s Miss Selfridge was acquired by the Arcadia Group [‘Selfridges 7 things’, op.cit.].

“The Queen of Time” AKA Ship of Commerce Statue ▼
⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎⁎

✱ described as “Downton Abbey with tills” [” ‘Mr Selfridge’: It’s ‘Downton Abbey’ with tills…”, The Telegraph, (Daphne Lockyer), 15-Dec-2012, www.telegraph.co.uk]
☯ the impressive Selfridge facade, personifying power and permanence, was later complimented by the addition of a decorative Art-Deco motif – the ‘Queen of Time riding her Ship of Commerce’ (clock-statue by Gilbert Bayes)
✜ around 12,000 visited the store to view the displayed history making French monoplane…no doubt plenty of these visitors also made spontaneous purchases while they were in Selfridge’s premises [Forbes, op.cit.]
⊟ Selfridge possibly was quite consciously also trying to make his front-line staff as unlike Harrods’ staff – who had a reputation for ‘snootiness’ and stiff formality – as he could! [Milwaukee Sentinel, loc.cit]
✧ recently the roof was again used in idiosyncratic fashion, by being turned into a “boat lake” and a “putt-putt” mini-golf course for customers
❅ in return, when protesting suffragettes smashed shops windows in Oxford Street, Selfridge’s was one of the few left unscathed
✥ other (very famous) attributed ‘Selfridgeisms’ are “the customer is always right” and “only xx shopping days till Christmas”

Harrods: Haunt of the Self-consciously Posh, the Shopaholic and the Curious in Search of a Luxury Fix

Built Environment, Commerce & Business, Heritage & Conservation, Local history, Retailing history, , , , , , , , , , , ,

If you mention the name Harrods today to any self-respecting ‘shopaholic’, don’t be surprised to see them salivate at the prospect of exploring a shoppers’ paradise which boasts 330 different outlets – names such as Adidas by Stella McCartney, Armani, Christian Lacroix, Givency, Hugo Boss, Polo Ralph Lauren, R.M. Williams and Yves Saint Laurent all on the one site! It’s an appeal that has massive international traction too, visitors to London with just a minimal amount of shopping curiosity in their DNA will ink in a trip to the Knightsbridge SW3 store on their “must do” lists (even if only to pick out the least expensive souvenir gift they can find, or failing that the green and gold Harrods carrier bag!). But Harrods is more than a high street mega-store, it is an institution with staying power and expensive tastes – its intriguing backstory reaches nearly 170 years into the past to the early days of Victorian Britain.

Harrods was the brain-child of London draper Charles Henry Harrod…from the 1820s he had small drapery and grocery businesses in the East End but the salient year for the company’s future trajectory was 1849. In this year Harrod moved his business to Brompton Road (Knightsbridge), its present and ultimate location. Harrods’ mid-19th century relocation to Knightsbridge was strategic in its timing and advantageous to the company. Knightsbridge and Western London were areas just being opened up to development at the time. Most opportune, the Great Exhibition of 1851 was held in nearby Hyde Park and Henry Harrod was able to capitalise on its drawing power to increase the store’s trade.

After some formative years on Brompton Road, the Harrods business bounded ahead especially after the founder’s son Charles Digby Harrod succeeded him in the 1860s. Under the energy and drive of Digby’s leadership Harrod expanded in piecemeal manner, accumulating neighbouring properties and land through astute purchases. A fire in 1883 razed Harrods to the ground, a calamity which Digby turned into an opportunity to rebuild the department store on a larger scale. Architecturally, the new Harrods was palatial in style with a terracotta tile facade decorated with cherubs and swirling Art Nouveau windows and a Baroque-style dome [‘Harrods’, (Civitatis London), www.londonbreak.com].

Control of Harrods stayed in the Harrod family until 1894✱ when Richard Burbridge took over the running of the department store. Among Burbridge’s store innovations was the introduction of the first escalator in England in 1898. The escalator caused quite a stir among patrons, shock and horror even for some perhaps…so much so that precautionary measures were taken by staff, Harrods shopmen would perch themselves at the top of the escalator ready with brandy and smelling salts at hand for any customers who found the strange and novel experience of riding on the “moving staircase” (as it was oft called in the early days) too much! [‘Harrods’, Wikipedia, http://en.m.wikipedia.org].

It was under Burbridge’s reign that Harrods’ profitability escalated⌻ and the business established its brand and retail style…high-end quality, expensive products but the best quality and value for money. And it was during this time that Harrods gained a reputation for the purveyance of goods and merchandise that was not easily obtainable elsewhere, hence the firm’s motto, Omnia Omnibus Ubique (Latin for “All things for all people, everywhere”). The other constant in the Harrods ethos and credo is service, the retailer has always prided itself on the advice and assistance given to customers, as the tag-line on Harrods’ home page seeks to stress: “Enjoy exemplary personal service and an experience that can only be found at Harrods.”

Pets are us!
That penchant for providing the unusual and unexpected led Harrods to diversify into the pet supply business in 1917, but not just offering the commonplace, suburban garden-variety “moggies and mutts”. Harrods’ Pet Kingdom went for the real exotica in animals. For those exclusive customers who could afford it, Harrods acquired tigers, panthers, camels and the like. Who wanted such an exotic pet? In the main customers tended to be politicians, actors and celebrities. Noël Coward was the recipient of just such a gift, a friend purchasing an alligator for the playwright/composer/director/ actor/singer. Ronald Reagan, when running for California governor in the 1960s, contacted the store seeking a baby elephant (elephants being the symbol and mascot of the US Republican Party). Harrods’ legend has it that the staff assistant who took the call from America, replied to the future US president’s enquiry with the words, “Would that be African or Indian, sir?”✥ [‘Harrods’ pet department to shut after nearly 100 years’, (Pat Sawer), The Telegraph, 10-Jan-2014, www.telegraph.co.uk]

Pet shop boys
By far the most celebrated of Harrod pet stories is that of Christian the lion cub. Spotted by two young Australian backpackers in a cage in Harrods in 1969, the three-month-old lion ended up back in the boys’ trendy Chelsea flat. A year later through the agency of actors Virginia McKenna and Bill Travers, the rapidly growing lion was repatriated to Africa and set free by wildlife conservationist George Adamson in Kenya. Most people are aware of the story as a result of the video made documenting the two backpackers’ later reunion with Christian in Kenya (see also Footnote).

The extraordinary state of affairs that created Harrod’s zoo of wild animals could not last for ever. The passing of the Endangered Species Act in 1976 signified the end of this trade. After that, Harrods’ Pet Kingdom had to satisfy itself with selling more conventional household pets, cats, dogs, hamsters, guinea pigs and the like. In 2014 Harrods’ management pulled the plug altogether on the pet shop, the space was given over to an expansion of the store’s womenswear department [Sawer].

Harrods of Manchester and Buenos Aires
After WWI Harrods entered an expansion period, acquiring other smaller retail outlets, most notably Kendals in (Deansgate) Manchester. After the takeover the name was changed to Harrods Manchester, but this met with strong disapproval from Mancunians, both staff and customers, and the name reverted to Kendals Milne in the 1920s [‘Kendals name dropped forever’, (David Ottewell), Manchester Evening News, 28-Oct-2005,www.manchestereveningnews.co.uk. Harrods no longer own Kendals, in 1958 ownership passed to department chain House of Fraser, and as of 2018, is owned by Sports Direct. Before the venture in Manchester, Harrods opened its one and only overseas outlet in Buenos Aires (1914). The Downtown BA store stayed in Harrods’ hands only until 1922 when it was bought by Argentinian retailers. Harrods Buenos Aires continues to operate independently under that name but a legal injunction prevents it from using the name ‘Harrods’ outside of Argentina [‘Harrods Buenos Aires’, Wikipedia, http://en.m.wikipedia.org].

Ownership passes offshore
As the 20th century progressed, Harrods’ rising prestige and continued growth made it a desirable retail takeover target (despite a terrorist attack by the IRA outside the store in 1983 which killed six bystanders). In 1985 Egyptian shipping magnate Mohamed Al Fayed and his brothers gained control of the House of Fraser group which included Harrods (at a cost of £615M). Under Fayed Harrods’ growth proceeded and added his own personal touches to the store, nothing more personifies that than the (some would say) garishly lavish and cluttered Egyptian Hall✫. An even more personal touch is Fayed’s staircase memorial to his son Dodi and (Lady) Di (replete with a bronze statue of the couple with symbolic seagull). In 2010 Fayed sold Harrods to another foreign concern, Qatar Holdings (ie, the Qatari Royal family) for £1.5bn, citing as his reason ‘frustrations’ over government delays re a Harrods “pension scheme” [Mohamed Al Fayed reveals why he sold Harrods’, (Andy Bloxham), The Telegraph, 27-May-2010, www.telegraph.co.uk].

The Harrods dress code
In 1989 Harrods introduced a dress code to the store (in Harrodspeak its called “Visitors’ guidelines”). The code specifies that the following are not permitted within the store – beachwear, Bermuda shorts, ripped jeans, bare mid-rifts or revealing clothing, uniforms of any description, thongs or flip-flops, cycling gear✦. In addition no visible tattoos are allowed, nor are clothing which have lettering with “objectionable language or design” (not exactly a formula to maximise Harrod’s sales potential with Gen-X’ers and Gen-Y’ers!). Backpacks must be carried in front of visitors, not worn on the shoulders⋇. Harrods a beacon of good deportment and presentation seeking to keep out the “riff-raff”? Wanting its patrons to all look like posh, debonair types? Snobbish elitism aside, management’s decision was arguably a rational response (albeit with a degree of overkill!) to the views expressed by Harrods’ core clientele (traditionally 60 per cent of Harrods customers live within three miles of the shop in the so-called Tiara Triangle of affluent Knightsbridge and Kensington). Harrods’ feedback from local clients, its rich ‘sophisticates’, was that they were increasingly unhappy shopping side-by-side with people who were dressed scruffily or in bad taste [‘Don’t come as you are: There is only Harrods dress code’, (Louise Levene), The Independent, 18-Jul-1994, www.independent.co.uk].

The Chinese are coming
By 2017 the basis of Harrods’ profitability had shifted – internationally. The firm’s efforts in courting the growing Chinese Middle class over the previous decade had paid off (managing director Michael Ward has been making four trips a year to China over that period to develop the budding relationship). Chinese shoppers, with their focus firmly on high-end fashion and accessories, were now outspending British ones in this most English of department stores, Ward disclosed that the Chinese made more than £200M worth of purchases at Harrods in 2016 [‘Chinese customers heralded as Harrods’ biggest spenders’, (Bo Leung), China Daily, 28-Nov-2017, www.chinadaily.com.cn].

Safe in Harrods’ hands
A less well-known service that Harrods has provided for over 120 years is located at basement level in the store. Since 1897 the mega-rich of different nationalities (foreign royals, VIPs, movie stars, etc) have entrusted Harrods with their money and their assets – works of art, antiques, collectibles and other valuables. These are held in secure safe deposit boxes and strong rooms within the Harrods building [‘What You Don’t Know About Harrods (But the Rich and Famous Do)’, (Michael Levin), Huffington Post, 22-Feb-2017, www.huffingtonpost.com].

Harrods as you see it today in 2018 is five million square feet of department store, eight levels x 330 individual departments and 5,000 staff, with additional outlets in Greater London (airport stores at Heathrow and Gatwick). As well as the Egyptian Hall, there is a Crystal Room, a large and showy Food Hall (the Arts and Crafts tilework is a standout), a Wellness Clinic, 28 separate dining and drinking establishments, interior decorators, a travel shop, Waterstone’s book shop et al, Bespoke tailoring, a Floral Couturier, a Toy Concierge (who will help you source out the world’s most expensive toys – of course!) and much, much more.

Footnote: Harrod’s Pet Exotica was in synch with a prevailing vibe in European culture, especially in the interwar period. It was a vogue for the fashionable and chic of society (actors, artists, musical performers, etc) to have (and be seen in public having) exotic animals, singer Josephine Baker had her pet cheetah, artist Frida Kahlo had a granizo (a fawn), actress June Havoc a toucan, artist Salvador Dali an ocelot. Even later, after the war, the exotic pet was a fashion accessory de jour for the famous. Sometimes the pairings were undisguisedly and unashamedly publicity-driven, eg, Salvador Dali walking an anteater on a lease in a London subway. Harrods itself has been known to resort to blatant PR stunts involving animals to promote itself, eg, the pop group ‘The Small Faces’ were photographed in the 1960s walking baby crocodiles in Belgravia borrowed from nearby Harrods! Recently, Harrods promoted its reputation for extravagance by using a live cobra to ‘guard’ a display of ruby and diamond-encrusted sandals valued at £62,000 [‘Eleven secrets of Harrods’, (Laura Reynolds – The Londonist), 12-Apr-2016, www.londonist.com]Retailer with a shady past: CH Harrod ▲

PostScript: A skeleton in the merchant’s cupboard
One aspect of the Harrods story that doesn’t get a mention whenever Harrods promotes its long tradition of luxury merchandising and commodity versatility, concerns a dark chapter in the founder’s early career. In 1836 (when the business was still at Cable Street, Whitechapel) Charles Henry Harrod was convicted of receiving stolen goods (and of trying to bribe a policeman) and sentenced to transportation to Van Dieman’s Land (Tasmania) for seven years. Fortunately for Harrod, the court defence presented by his lawyer and a raft of supporting character references got the grocer’s sentence commuted to one year in Millbank Prison. Had Harrod been transported to the Tasmanian penal colony, the illustrious retail history of Harrods would never have come to fruition [(Robin Harrod) ‘A brief history of Harrods’, BBC History Magazine, 23-Mar-2017, www.historyextra.com].

≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛≛

✱ although in 1889 Harrods became a public company, and remained so until Mohamed Al Fayed’s takeover in 1985 when it reverted to being a private company

⌻ from when Burbridge became managing director in 1894 to 1916, Harrods’ profits increased from £16,000 to in excess of £200,000 [‘Richard Burbridge’, Wikipedia, http://en.m.wikipedia.org]

✥ this anecdote has a “urban myth” feel to it…and it verges on the realm of apocrypha when you take into account the similar sounding variations on it that were doing the rounds, eg, in the early days of Harrod’s Pet Kingdom it was said that a lady phoned the store asking for a camel, to which the assistant also in this case replied, “Would that be one hump or two, madam?” Slightly surprising not to hear Elton John’s name among the celebrity owners of Harrods’ exotic animals, it sounds like it would have been Reggie’s kind of thing to do in the Seventies

✫ to get the full effect of the “full-on” Egyptian motifs you are supposed to ascend the Egyptian escalator and take in the view from there – which includes faux-hieroglyphics, a sphinx with the head of Mo Fayad(?!) and a zodiac-design ‘night’ ceiling. While you are in the vicinity you can hop off the escalator on the first floor to avail yourself of the ultra-swish “luxury washrooms”, in the presence of an attentive attendant ready to pass you an unused hand towel at the appropriate time

✦ among the famous to be barred entry on dress grounds include singers Kylie Minogue and Jason Donovan. Others excluded include a young woman with a Mohican haircut and a soldier in uniform

⋇ Harrods are a bit funny also about where exactly you can and can’t take photographs within the store

The ‘Monopoly Myth’, a Review of The Monopolists

Commerce & Business, Leisure activities, Old technology, Popular Culture, Retailing history, Society & Culture, , , , , , , , , , , , , , , , , , , , , , , , , ,

Monopoly: (n.) a market situation where one producer (or group of producers acting in unison) controls supply of a good or service, and where the entry of new producers is prevented or highly restricted; “exclusive possession” of the commodity is customarily implicit in the term [www.businesssdictionary.com; www.en.oxforddictionaries.com]

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As a kid my favourite board game wasn’t Monopoly, it was an old Milton Bradley game called Pirate and Traveler✱, however I certainly did play Monopoly an awful lot of times growing up (and it seemed like every game went for an interminably long amount of time!). So, having clocked up that amount of wasted Monopoly game-time, I was more than mildly interested to revisit my youth via a recent book on the universal and ubiquitous board game, and even more intrigued that its author, Mary Pilon, presents a radically different take on the genesis and development of Monopoly to what hitherto was been the received orthodoxy.

f=”http://www.7dayadventurer.com/wp-content/uploads/2018/09/image-60.jpg”> (US Patent & Trademark Office)[/capt
Pilon’s book starts with two very different Americans, one an out-of-work Eastern Seaboard “average Joe” wallowing in the depths of the Depression, the other a fairly nondescript, left-leaning economics professor at a Californian public university –– Charles Darrow, the individual identified as the putative inventor of Monopoly, and Ralph Anspach, the man who almost inadvertently exposed Darrow as the faux inventor of the game. The unemployed Darrow learned the game from friends during his enforced leisure time…then with the germ of an idea in his head, got other friends to provide artwork (especially political cartoonist FO Alexander) and a written set of rules. Darrow crafted a version⊚, copyrighted it and eventually sold “his” game of Monopoly (without acknowledging or recompensing the contributions of his friends) to games manufacturers Parker Brothers who mass-produced and distributed it – and the rest is blockbuster games sales history!✥

Ralph Anspach comes into the story in 1973, six years after Darrow—made a multi-millionaire by the runaway success of Monopoly—had died. Anspach is an avowed anti-monopolist, by conviction a “trust-buster” who is mightily annoyed at the OPEC oil cartel’s stranglehold over that essential world commodity at the time (the 1973 Oil Crisis). He pursues his ideals by creating an Anti-Monopoly game in opposition to Parker Brothers’ über celebrated game. Parker Brothers sues Anspach for breach of copyright and so begins nearly ten years of legal battles with Parker Bros (in fact by this time the company was controlled by the General Mills corporation)…Anspach’s tireless research for the case leads him to the true, albeit convoluted, origins of Monopoly☸.

The Monopolists recounts Anspach’s monumental efforts and endlessly time-draining “detective work” in minute detail. Anspach traces the game back to one Elizabeth (Lizzie) Magie (long pre-dating Darrow), and here’s where the story gets really interesting! Magie, an independent-thinking, politically progressive Midwestern woman, was a staunch supporter of Henry George. George was the author of Progress and Poverty, a widely influential text which fuelled the introduction of the Progressive Era in the US (1890s-1920s). George advocated the introduction of a Single Tax on land and property (AKA Land Value Tax). Ms Magie invented and patented a board game in 1903-1904☯, called the Landlord’s Game, based on Georgist principles of wealth redistribution. Magie’s game was in her words, “a practical demonstration of the present system of land-grabbing with all the usual consequences” [Single Tax Review, 1902], the Landlord’s Game was intended to educate Americans about the dangers of unbridled capitalism (ie, ultimately resulting in the monopolisation of business, benefitting only one player)⌑.

When I played Monopoly in the 1960s the takeaway message for me always aligned with the “Gordon Gecko/Greed is Good” world view…gold standard instruction on how to win at capitalism – with ruthlessness and a certain degree of luck! Pilon points out the fundamental irony of Magie’s “thought-child” – once Parker Bros got their hands on Monopoly, the company left not a single stone unturned in the pursuit of eliminating any rival claims to “their game”⊡. Monopoly, under the aegis of Parker Bros, a game with the sole raison d’être of annihilating all business competitors, leaving a solitary victor, was the complete opposite of what the game’s prototype inventor intended it to be! Moreover, to further underscore the irony, the game became controlled by a company (Parker Bros) that “fought tooth and nail to maintain its own monopoly over it”.

Back to Ralph Anspach’s anti-monopoly crusade – as well as introducing or reintroducing Lizzie Magie to the world, the economics professor’s years of searching, digging in archives, interviewing people of interest across the United States, word-of-mouth, friend-of-a-friend, sometimes down blind alleys, etc, revealed that the games (or games) of Monopoly had been played in various forms and under various names for decades before Charles Darrow’s Pennsylvanian neighbours introduced him to the game. Pilon ties together all the threads of Monopoly’s antecedents – as unearthed by the indefatigably never-say-die Ralph Anspach. What came to light was that Magie’s game, either in its original published form (‘The Landlord’s Game’) or in derivative ‘backyard’ versions, had been played (prior to the publication of Darrow’s Monopoly) as follows:

⌲ among members of the early 20th century rural community of Arden (Delaware), an “alternative lifestyle” arts and crafts colony of “Single Taxers” (including the influential writer Upton Sinclair and the radical economist Scott Nearing who spread the word about Magie’s game to other locations)

⌲ among members of the Quaker community residing in Atlantic City in the 1920s (many Quaker families held “Monopoly nights”)

⌲ among left-wing university students and college “frat boys” on the Eastern Seaboard

⌲ among couples and families in urban Philadelphia (including those neighbours who first taught the game to Charles Darrow)

Unbeknownst to Lizzie Magie, many versions of her ‘Landlord’s Game’ had sprung up in the North-East of the country, often these early, widely dispersed players made their own homemade versions of Monopoly using hand-painted oil cloths, local street names and substitute tokens. In addition George Layton created and sold his own commercial version (which he called ‘Finance’) in the early 1930s. By the thirties a version of the game had spread to Texas – Rudy Copeland’s published board game of ‘Inflation’.

Parker Brothers’ whole claim on Monopoly was based on the contention that the game had no precedents to its 1935 patent with Darrow. Anspach’s pains-taking spade work proved that the game in various guises and forms existed “in the Public Domain” years and years before the Parkers and Darrow came on the scene!

Pilon injects many diverse strands in the narrative, even Abraham Lincoln makes a brief (oblique) appearance in The Monopolists – in the late 1850s Lizzie’s father James Magie, a newspaper editor and abolitionist, was an instrumental part of Lincoln’s political campaigns for office…this digression has a very tenuous connexion with Monopoly! The various currents traversed by the author takes the story beyond the purview of being a straightforward account of plagiarised copyrights and game inventions. The book illuminates the position of women in late 19th/early 20th century American society by positing what made Magie stand out from others of her sex at the time and what she was able to achieve – taking on a number of vocations and pursuits, retaining her autonomy and avoiding the “marriage trap”, becoming an inventor (in addition to the Landlord’s Game she held patents for inventions in the realm of stenography as well).

The three Parker Brothers ➚

Another strand follows the career of George S Parker, the founder of the eponymous games empire. Parker published his first board game (‘Banking’) at 17, and from the get-go was determined to establish a monopoly, systematically building up a catalog by buying up other manufacturers’ games (leading him headlong into an ongoing rivalry with fellow games giant Milton Bradley). In Parker’s zeal to totally tie down the company’s ownership and control of Monopoly, the company even went round buying up old (Pre-Parker) Monopoly sets. Eventually George Parker talked Lizzie Magie (by this time now Elizabeth Magie Phillips) into parting with her patent for the Landlord’s Game, and paying her a pittance for it with no residuals (despite inventing the archetypical business game Magie lacked business acumen and naively trusted Parker’s intentions to do the right thing by her and her invention, which he didn’t!)

The author takes the reader on another diversion, straying away from the origin controversy to surprisingly explore Monopoly’s role in World War II! The US Military purchased Monopoly sets to be sent to POWs detained in German prisons (and elsewhere in Europe). The intent behind this practice had a dual purpose: to boost morale for the imprisoned soldiers, but also a practical one –

Coda: The after-affects of Ralph Anspach’s 1983 victory over Parker Brothers in the US Supreme Court (including the ruling that the word monopoly was in fact generic) hasn’t brought any sense of closure to supporters of Elizabeth Magie Phillips. The public acknowledgement warranted her as the true and original inventor of Monopoly has not been forthcoming. Pilon points out that in the 1980s Parker Bros “quietly began to massage its Monopoly history”…a 1988 history of the company by a former Parker Bros R & D head admits that Darrow was not the game’s inventor, but neglects to mention Lizzie Magie. Similarly, on the official Monopoly website in the Nineties, Hasbro, Inc, which purchased Parker Brothers in 1991, starts the Monopoly story at 1933 with Darrow and scantly acknowledges the influence of the Landlord’s Game (again without mentioning Lizzie by name!) No plaque for Lizzie’s prototype of the Monopoly game exists anywhere (although there is one in Atlantic City recognising the contribution of that city’s Quaker players to the invention of the game!)

FN: Mary Pilon’s research for The Monopolists is nothing if not thorough. In the end-piece she includes a long, long list of acknowledgements of her sources, helpers and supporters, she even gives a hearty shout-out to coffee shops in seven different cities (I said she was thorough!)…one very notable exception missing from the author’s acknowledgement of research help is Hasbro! Hasbro denied Pilon’s request to access the Parker Brothers’ archives and outright refused to answer any of the many fact-checking queries she submitted to the world’s largest toy and games company. Zero marks to Hasbro for the cause of corporate transparency…ummm, given how much she gleaned from other sources, I wonder what else they didn’t want her to discover?

The Monopolists: Obsession, Fury, and the Scandal Behind the World’s Favorite Board Game, by Mary Pilon [Bloomsbury New York: 2016 p/b ed.]

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✱ Pirate and Traveler later got relaunched with some modifications and an updated aviation theme as a game called Pan American which I played with equal relish. The idea of these two games was to spin a number or roll a dice, collect a destination card and progress from one city to another city somewhere in the world. When you completed a requisite number of destinations, you hightailed it back to a home base city (Godthab, Greenland), first one there was the winner! The games educated me on political geography and I learnt the distance (in miles in those days) between different places on the world map

⊚ with Atlantic City street names on the earliest editions of the Monopoly sets (later editions of the game utilised New York City streets and London streets on their boards)

✥ a comparison of the visuals of Magie’s original 1904 patented game and Darrow’s 1935 patented Monopoly reveals profound continuities…Darrow’s replicates essential features of Magie’s – a square board, a space “for the emblematic GO TO JAIL”, a “Public Park” space (anticipating the Parkers’ “Free Parking”), ‘chance’ cards, the use of tokens representing money, deeds and properties

☸ Parker Bros, when taking on Darrow’s game, accepted and promoted the myth that Darrow had fed them, ie, HE invented the game from his own head in the early 1930s, and that there were NO precedents for it

☯ by a remarkable happenstance of history Lizzie filed her patent claim on the same day in 1903 as the infinitely more famous Wright brothers filed their “flying machine” patent


⌑ interestingly Magie devised two versions of the Landlord’s Game – version 1, the objective was to crush all of your opponents (= the contemporary game of Monopoly produced by Parker Bros), and version 2 – the objective was to create wealth for all to share


⊡ the three Parker brothers (especially George) were evangelically zealous about this because, as the author explains, the company had been “badly burnt” twice before with two products that they had thought that they held exclusive control and ownership of – ‘Tiddlywinks’ and ‘Ping Pong’

John Wanamaker, Evangelical Retailer and Innovator

Biographical, Regional History, Retailing history, , , , , , , , , , , ,

Wanamaker’s department stores were an innovative 19th century prototype of American retail enterprise best remembered today for the drive and vigour of its founder in establishing the company regionally on the Atlantic Seaboard. John Wanamaker’s humble origins in the retail trade began with the small menswear store known as “Oak Hall” (Philadelphia) he started up in partnership with his brother-in-law in the early days of the American Civil War.

From the get-go Wanamaker exhibited a flair for innovation, demonstrating an aptitude for thinking outside the box in retailing. Wanamaker introduced concepts in his business that were quite radical in retailing of the day. One of the earliest, which seems self-evident to us today, was to establish the principle of price-setting. Before Wanamaker started putting price tags on his goods, the practice in shops was that the price of an item would be determined by haggling between the customer of the salesperson. Wanamaker, as a devout Christian imbued with the Protestant work ethic, espoused the principle of price equality…as he liked to say (repeatedly), “if everyone was equal before God, then everyone should be equal before price”✱[1]. Wanamaker also allowed customers the option of returning the goods (within a specified time period) and receiving a refund, a practice that was unusual in retailing at that time.

Truth (and volume) in advertising
From the time he was a teenager Wanamaker developed an appreciation of the value of publicity. One of his early publicity stunts for the store was to release 20 foot balloons and reward those who retrieved them with a free suit from Wanamaker’s. From as early as the 1860s the Philadelphia merchant relied on advertising to propel his business forward. Wanamaker took out large size ads in newspapers, which proved expensive, but nonetheless generated a large volume of sales. During the War between the States the store was kept afloat by being able to supply Union Army officers’ uniforms to the Northern side. By 1909 the retailer was placing ads daily in the press. Wanamaker assiduously built consumer trust…when he placed retail ads offering low prices for wares, he kept his word to the public[2].

Wanamaker usually didn’t miss a business opportunity when it came along. In 1876 he purchased Pennsylvania Railroad property and turned it into what would become Wanamaker’s flagship store, named the Grand Depot. Located on the corner of 13th and Market Streets, Philadelphia, Wanamaker promoted it as a “New Kind of Store”, adding women’s clothing and dry goods to the existence outlet for menswear, arguably making it one of if not the world’s first department store. The original building (architect: Daniel Burnham) boosted an exotic Moorish-style facade, the building that he erected much later on the same site had a classic Florentine facade.

Other Wanamaker retail innovations
The Pennsylvanian merchant was ahead of the curve in many ways, pioneering marketing strategies as well as being an early proponent of advertising. Other firsts for the Wanamaker stores included:

◗ the first department store to include a restaurant inside its complex
◗ the first department store with electrical illumination
◗ the first department store to have telephone communications
◗ the first department store to use pneumatic tube transit (to internally move cash and documents around the store)
◗ the first department store to have an elevator
◗ the first department store to have a wireless station
◗ the first department store to engage buyers to travel to Europe to acquire the latest fashions[3]

Wanamaker also pioneered a series of individual benefits for his staff members – free medical care, profit-sharing, pensions (all ahead of his competitors). Wanamaker implemented measures for staff training that were in advance of their time…establishing an in-house college, the Wanamaker Commercial Institute, providing his workers with skills and tuition in bookkeeping, finance, English and maths◘. He also initiated summer camps for young men and women on the payroll – in keeping with Wanamaker’s characteristic intertwining of religion and business, this was to equip them with moral instruction and development[4].

Wanamaker’s continued to grow into a small chain of stores…by the early 20th century Wanamaker had 16 department stores operating, mainly regionally, but the network included a showcase store in New York City (1896), between East 9th and 10th streets (in the ‘NoHo’ neighbourhood of Manhattan). Later Wanamaker built a second building opposite and connected them via an overhead walkway he called the “Bridge of Progress”.

Grand Depot mega-store
Wanamaker’s most ambitious store project was a massive transformation of the Philly retail store in 1910. The store was radically re-shaped in the form of a wheel with a 90 foot circular counter and 129 smaller sales counters installed in concentric circles. Wanamaker claimed that he had created “the largest space devoted to retail selling on a single floor”[5]. And, to give his new City Center flagship store a touch of imperial grandeur, the store contained a “Grand Court”, to which he added a Grand Court organ and a large bronze eagle⊙ (both of which had featured in the 1904 St Louis World’s Fair).

Wanamaker died in 1922 and his successor (his second son) in 1928, but the business continue to thrive and expand until the 1960s and 1970s. Increasingly though Wanamaker as a regional player wasn’t able to match it with national retail chains. Even in Philadelphia it was losing its market share to Bloomingdale’s and Macy’s. In 1978 Wanamaker’s was sold to California’s Carter Hawley Hale Stores, which tried to revive its fortunes but failed. Still trading as Wanamaker’s, it was then on-sold to Alfred Taubman’s Woodward and Lothrop. Under Woodward and Lothrop it again declined, then downsized to five stores, and eventually went into bankruptcy. In 1995 they were further sold to retail giant Macy’s, bringing to a close 133 years of Wanamaker’s retail history[7]. Despite the sense of inevitability, for many Philadelphians, the end of Wanamaker’s was a heartfelt moment, the loss of “a unique public institution and a powerful symbol of Philadelphia’s commercial viability”[8].

PostScript: Wanamaker’s diversified interests
Wanamaker at one point founded a bank (First Penny Savings Bank) to encourage Americans to embrace thrift. He also established a trades school in Elwyn, Pa. Between his business activities Wanamaker found time for a (four-year) stint as a civil servant…President Benjamin Harrison appointed him Postmaster-General in 1889. Wanamaker initiated some reforms (eg, brought in parcel post, erected a pneumatic tube system to US post offices), but his term was not without controversy (mass sacking of 30,000 postal workers, accusations of having ‘purchased’ the post of PMG).

🏢🏢🏢🏢🏢🏢🏢🏢🏢🏢

✱ Wanamaker conceivably got the idea of fixed prices from the English Quakers, “fixed prices made everyone equal in the eyes of God”, Mary Pilon, The Monopolists, (2015). As befits someone with a bent for religious proselytising, Wanamaker had quite a penchant for pet mottos and maxims in business
◘ not as altruistic as it first sounds, there was a strong element of self-interest on Wanamaker’s part, the business ‘titan’ had an abhorrence of the labour movement and his generosity was insurance against the prospect of his workforce ever becoming unionised (Hingson)
⊙ Wanamaker’s Eagle became such an institution that Philadelphians would conveniently use it as a meet-up point when coming to the city (‘Wanamaker Organ’)

Source: Smithsonian (Postal Museum)


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[1] ‘John Wanamaker, Innovator’, (Who Made America?), www.pbs.org
[2] ‘Wanamaker, John, (1838-1922), Ad Age, 15-Sep-2003, www.adage.com
[3] ‘Wanamaker’s’, Wikipedia, http://en.m.wikipedia.org; ‘Facts and Figures about the Wanamaker Organ’, www.wanamakerorgan.com
[4] ‘Thirteen Things You Might Not Know About John Wanamaker’, (Sandy Hingson), Philadelphia Magazine, 11-Jul-2016, www.phillymag.com
[5] ‘John Wanamaker A retailing innovator’, The Philly Inquirer, 22-June-1995, (Andrew Maykuth Online), www.maykuth.com; ‘Who Made America?’, loc.cit.
[6] ‘John Wanamaker’, Wikipedia, http://en.m.wikipedia.org
[7] ‘Wanamaker’s’, Wikipedia, op.cit.
[8] Sarah Malino, review of Herbert Ershkowitz’s John Wanamaker: Philadelphia Merchant, (Pennsylvania Magazine of History and Biography, Vol.125, No 1/2, Jan-Apr 2001)

The Kroger Grocery Empire: Barney’s Blueprint for Success

Regional History, Retailing history, Social History, , , ,

The history of the Kroger Grocery Company has parallels with the Great Atlantic and Pacific Tea Company, another pioneering powerhouse of American food retailing. Both grocery businesses started in the 19th century as tea and coffee purveyors, however Kroger, unlike A&P Tea, has survived through the centuries and still trades today as lucratively as ever. In the 2016 fiscal year Kroger was the largest supermarket chain by revenue in the US (yielding US$115.34 billion). It shares a roost with Walmart at the top of the US retail tree…it is number 2 general retailer behind Walmart in the US, and is the third largest retailer in the world[1].

Origins, growth and expansion of the Kroger name
The man behind the Kroger Company was Bernard Kroger, better known as ‘Barney’. Kroger (below), the son of German immigrants, got into the retailing world at the basement level – working door-to-door selling coffee first for the Great Northern and Pacific Tea Co and then the Imperial Tea Co. By 1883 Kroger was in business for himself, his first store traded under the name the Great Western Tea Co…soon renamed Kroger Grocery and Baking Co✳. The Cincinnati-based business expanded exponentially into the 20th century, by the end of the 1920s decade Kroger had over 5,500 stores in the US[2].

The Kroger business ethic
Not afflicted with the curse of Hamlet, Barney Kroger was not one to overthink or complicate matters, as his simple motto attested: “Be particular. Never sell anything you would not want yourself.” Kroger’s business style was heavily and idiosyncratically micro-managerial, the businessman personally maintained an account book which meticulously recorded all the firm’s financial transactions. Kroger’s business credo was “First: Do it first. When seasonable goods come into the market, have the first. When prices go down, be the first to reduce them. Second: Never sell anything except for just what it is, and don’t sell it then if it isn’t good. Third: Advertise as liberally as business income permits. Fourth: sell on a small margin and make the turnover rapid”. The Ohoian entrepreneur’s pragmatism emphasised “duplicating and reduplicating…what works”[3].

One of Barney Kroger’s most enduring contributions to grocery retail revolves around his minimum cost/high volume approach to trading. He is remembered for introducing the template of the low-cost grocery chain, still much duplicated in modern retailing. Kroger was also innovative in his store design, adding distinct bakery, meat and seafood departments in his grocery stores[4].

In-house food manufacturers
Bread-making was a good example of the Kroger cost minimisation strategy…at variance with most grocers in the early 20th century who purchased the product from independent bakeries, Barney Kroger baked his own bread. This way he could further cut the price for customers and still make a profit. Kroger after the death of Barney has rapidly expanded its own product manufacturing facilities, now making thousands of comestibles within the company[5].

A typical mid-century Kroger store

Merger juggernaut
From the 1950s on Kroger embarked on an ongoing series of mergers with smaller firms to consolidate its market position in the US grocery/supermarket trade. The most significant of these, in 1999, was with Fred Meyer, Inc., then the fifth biggest American grocer. This new acquisition by Kroger saw it reach a new high of 2,200 stores in 31 states, netting the supermarket giant billions in annual revenue[6].

Kroger innovations
Kroger has led the way in retail grocery innovations…the innovations pioneered by the company include ‘firsts’ for a grocery chain, eg, the routine monitoring of product quality and the scientific testing of foods; testing of electronic scanners. As well Kroger was a pioneer in modern consumer research in grocery lines[7].

Kroger’s position today as a market leader in the US grocery and supermarket field (FN1) rests firmly on the solid foundations laid down by its founder Barney Kroger. Contemporary growth by the company has continued a trajectory of diversification well beyond the grocery staple into fuel centres, florists, drug and convenience stores.

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✳ eventually the company name was shortened simply to Kroger

[1] as at December 2015 Kroger operated a total of 2,778 supermarkets and multi-department stores across 34 American states, ‘Kroger’, Wikipedia, http://Wikipedia.org
[2] ibid.
[3] ‘Bernard Heinrich Kroger (1860-1938)’, (Zachary Garrison, 08-Jun-2011), Immigrant Entrepreneurship: 1730 to the Present, www.immigrantentrepreneurship.org; BM Horstman, ‘Barney Kroger: Hard work, marketing savvy won shoppers’, Cincinnati Post, 17-Jun-1999, www.webarchive.org
[4] Horstman, ibid.; ‘Kroger’, Wikipedia, loc.cit.
[5] ‘History of Kroger’, (Kroger), www.thekrogerco.com
[6] Dana Canedyoct, ‘Kroger to Buy Fred Meyer, Creating Country’s Biggest Grocer’, New York Times, 20-Oct-1998, www.nytimes.com
[7] ‘History of Kroger’, loc.cit.

A&P Tea Co: Once Were Giants of the American Grocery Trade

Popular Culture, Regional History, Retailing history, , , , , , , , , , , , ,

The year 2015 brought an end to one of the most enduring major retailers in the history of United States business. The Great Atlantic and Pacific Tea Company (universally abbreviated to A&P Tea Co) succumbed after a succession of bankruptcy proceedings played out in the early 2010s (bringing an end to 156 years of continuous retailing in the US).

A&P Tea endgame
The beginnings of A&P Tea’s decline in the retail world harks back as far as the 1950s – the source of the downward trend was its inability to maintain parity with competitors who were opening larger supermarkets that, driven by customer demand, were more modern[1]. Partial sell-offs followed in the seventies and eighties. Things didn’t really improve for the grocery ‘Goliath’ despite sporadic and ephemeral upsurges[2]. In 2010 the company filed for bankruptcy, but were only able to hold on till 2015 when A&P again filed for Chapter 11 bankruptcy, this time being permanently wound up.

A&P store: Westwood, NJ, 1959

According to industry analysts A&P’s demise could be attributed to a misguide focus, and to the company’s failure “to evolve with the changing market”…A&P had a tendency to concentrate on “extracting dollars from its vendors instead of selling to its customers”. This exhibited a woeful neglect when it came to improving the customer experience (George Anderson, editor-in-chief of RetailWire)[3].

The company’s woes were exacerbated by a failure to modernise its look…it doggedly kept its grocery lines to the basics and was disinclined to adapt to changing tastes and interests of consumers with their growing preference for organic, healthy and gourmet foods. Meanwhile its competitors like Whole Foods, The Fresh Market and Kroger were stealing a march on the erstwhile market leader[4].

Humble leather goods origins
Atlantic and Pacific’s company history traces itself back to 1859, founded by George Gilman, as a sideline to his hide and leather importing business. Gilman’s diversification into mail-order tea was so successful that he dropped the leather and Gilman & Co by 1869 had become the Great Atlantic and Pacific Tea Co[5]. A&P Tea’s fortunes rose with the ascent of George Huntington Hartford who assumed control in 1878. George and his sons (affectionately known as “Mr George” and “Mr John”) oversaw the company’s inexorable growth and monopolistic practices[6].

A&P Tea at its zenith
At its peak in the 1930s (with the Hartford brothers still ensconced at the helm), A&P was by far the largest grocery chain in the US with 15,709 stores in 39 of the 48 states plus parts of Canada. The tea and coffee merchants had already diversified into bakeries and pastry and candy shops, and introduced innovations in food retailing such as pre-packaged meats and food-testing laboratories (pioneers of quality assurance)[7]. The Economy Store was another A&P concept: small stores located in secondary streets, away from the main street (comparison with King Kullen), inexpensive “no frills” lines; operated by only one or two staff members; low cost, high volume[8].

Slow to embrace the supermarket concept
The Hartfords were unimpressed by and reluctant to adopt the model of the supermarket, pioneered by King Kullen and others. Finally in 1936 A&P opened their first supermarket in Braddock, PA. Eventually the company’s supermarkets came to replace the increasing obsolete Economy Stores[9].

1928 A&P grocery ad

When it came to reading changing consumer preferences after WWII, A&P Tea, as was the case with F.W. Woolworth, was slow to move its stores from the urban centres to the suburbs, thus falling behind rivals like K-Mart, Safeway and Kroger in this respect. From the 1960s on A&P experimented with discount stores A-Mart (folded as its name was too like K-Mart!) and WEO (Warehouse Economy Outlet) with moderate results[9]…A&P sales continued to flatten out, it continue to jettison stores into the 21st century, with its market share haemorrhaging in the fierce onslaught of rising powerhouses such as Walmart[10].

PostScript: Legacy of the retailing ‘Goliath’
The heights to which Greater Atlantic and Pacific Tea Co rose in its heyday were of Everest proportions. Until 1965 A&P Tea Co was the largest US retailer of any kind…between 1915 and 1975 A&P was the largest food/grocery retailer in the US…until 1982 the company was also America’s largest food manufacturer. According to the Wall Street Journal A&P Tea Co was “as well known as McDonald’s or Google is today” and was lionised in the world of North American retail traders as “Walmart before Walmart”[11]. By the end of the 1920s A&P had become the first retailer to sell US$1 billion worth of goods[12].

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[1] WI Walsh, The Rise and Decline of the Great Atlantic and Pacific Tea Company (1986)
[2] ibid.
[3] Hayley Fitzpatrick, ‘A&P made one mistake that undermined its business’, Business Insider Australia, 22-Jul-2015, www.businesinsider.com.au
[4] ibid.
[5] Marc Levinson, The Great A&P and the Struggle for Small Business in America, (2011)
[6] A 1946 US Federal Court ruling found the Hartford brothers guilty of illegal restraint of trade by using A&P’s size and market power to keep prices artificially low, ibid.
[7] ‘The Great Atlantic & Pacific Tea Company, Inc’, Encyclopedia.com, www.encyclopedia.com
[8] ‘A&P: The Early Years’, Groceteria.com, www.grocetaria.com
[9] ibid.
[10] Levinson, op.cit.
[11] ‘The Great Atlantic Pacific Tea Company’, Wikipedia, http://en.m.wikipedia.org
[12] Levinson, op.cit.

Prototype of the Modern Supermarket: King Kullen

Regional History, Retailing history, Society & Culture, , , , , , , , ,

The big players in US supermarkets in 2017 are names like Kroger, Costco and Safeway❈ but long before Costco, Safeway and Walmart existed and whilst Kroger was still a cash–and–carry grocer, there was King Kullen.

Founder of King Kullen

The entrepreneur behind the King Kullen story was Michael J Cullen – Cullen was an ex-employee of the Kroger Company (and before that he had worked for the famous Great Atlantic & Pacific Tea Company, better known simply as A & P Tea). The manner by which Cullen came to start up his own supermarket chain is a classic story of turning rejection into a virtue. Cullen was managing a number of small Kroger stores in the late 1920s and identified a raft of improvements to the way Kroger did business that he believed, if implemented, would increase the company’s revenue tenfold. Cullen wrote to the Vice President of Kroger with his suggestions for a new, revolutionary type of dry goods/grocery store. In his letter Cullen envisaged “monstrous stores, size of same to be about forty feet wide and hundred and thirty to a hundred and sixty feet deep…located one to three blocks from the high rent district with plenty of parking space, and same to be operated as a semi-self-service store – twenty percent service and eighty percent self-service”, low prices and cash sales[1].

Kroger’s VP, whether through indifference, complacency or sheer lack of business nous, did not reply to his branch manager’s suggestions. Cullen, rebuffed but confident in the efficacy of his own store model, resigned from Kroger and set about realising the kind of new revolutionary grocery store he had envisaged. Settling his family in Long Island, Cullen found a vacant warehouse in Jamaica (Queens) with 6,000 square feet of space, which he chose as the optimal retail location. Cullen’s new store, which he dubbed “King Kullen”, opened its doors for business in August 1930[2].

King Kullen, Queens

Billing itself as the “World’s Greatest Price Wrecker”, King Kullen was an instant success in New York with its formula of high volume and low cost…KK’s slogan was “Pile it high, sell it low!” Customers were willing to travel up to 30 miles to the Queens store to cash in on the bargains[3]. The American Food Marketing Institute (FMI) Identified the contribution of King Kullen as “serv(ing) as a catalyst for a new age in food retailing” and the Long Island-based grocery company is widely thought to be the first example of the modern supermarket. King Kullen’s reputation as the prototype form of supermarket (or at the very least a strong candidate for being so) rests in part on the endorsement given it by the Smithsonian Institute…FMI in 1980 with funding from the Heinz Corporation) initiated research by the Smithsonian which concluded that King Kullen met its five-point criteria for a supermarket, viz. it provided separate departments for produce; it offered self-service; it offered discount pricing; it conducted chain marketing; and it dealt in high volume quantities[4].

Under Cullen’s leadership the supermarket chain grew exponentially…8 stores by 1932 (each new store bigger than the preceding one), 17 stores by 1936 with annual sales of $6 (this despite a climate of economic depression)[5]. To match the “belt-tightening” days of the Depression and deliver the lowest possible prices, Cullen took a “no frills” approach to his King Kullen stores – facilities were simple, service was minimal. Unexpectedly though, just as he was about to expand King Kullen nationally and into franchising, Cullen died suddenly in 1936, aged only 52 [6].

Cullen’s wife and children continued King Kullen after his death. In 1961 it was listed as a public company however the family retained a controlling interest. King Kullen, after going through a static period, not changing with the times, was revamped and modernised from 1969, growing the business to a total of 55 New York stores by 1983[7].

King Kullen eventually diversified into bakeries, delicatessens, florists, pharmacies and health products, in addition to its staple of produce lines. Today it maintains a modest but healthy market position in New York, operating a chain of supermarkets (around 35 in total) in the Long Island area, concentrated in Nassau and Suffolk counties.

(Photo: www.newsday.com)

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❈ Walmart in groceries and food sales are the overall dominant competitor in the market but its retail outlets tend to be hypermarkets rather than supermarkets

[1] ‘About King Kullen Supermarkets’, (King Kullen: America’s First Supermarket), www.kingkullen.com
[2] ‘King Kullen’, Wikipedia, http://en.m.wikipedia.org
[3] ‘King Kullen Grocery Co., Inc. History’, (Funding Universe), www.fundinguniverse.com
[4] D Simionis [Ed], Inventors and Inventions, (2008);
Funding Universe, op.cit.
[5] King Kullen: America’s First Supermarket, loc.cit.
[6] ‘Michael J Cullen’, http://en.m.wikipedia.org
[7] Funding Universe, op.cit.

A Revolutionary Retailer: Piggly Wiggly, Keedoozle and Foodelectric – eAntecedents of the Modern Supermarket

Regional History, Retailing history, Society & Culture, , , , , , , , ,

In an episode of the 2012 series of The Hairy Bikers, the English BMW-riding celebrity chefs from “Oop North” do a road trip through the gastronomical delights of America’s Mississippi River Valley. Whilst the two girth-challenged biker-chefs are in Memphis, Tennessee, to check out the local speciality of soul stew and fried chicken, they make a visit to a Piggly Wiggly store, or at least to a replica of the famous original store encapsulated in a local museum, formerly the pink palatial mansion (pictured above) of Piggly Wiggly’s founder.

Piggly Wiggly (established 1916) and its 1930s successor Keedoozle were the brainchild of businessman Clarence Saunders – these stores were thought to represent the first forays into self-service grocery retailing. Prior to Saunders’ innovation, grocery store customers (in a typical corner store) would line up with their grocery lists, the clerk would take their lists in turn and scoot around the store collecting the orders whilst the customers waited. When completed, the clerk would bag all their items, and then go on to the next customer. Saunders’ revolutionary self-serve idea was: customers enter the store through a turnstile, collect a shopping basket which they’d cart round the shelves selecting the items they want and then proceed to the checkout.

ref=”http://www.7dayadventurer.com/wp-content/uploads/2017/07/image-5.jpg”> Piggly Wiggly’s foundation store ca 1916[/ca
For 100% self-service to work, the store’s layout of merchandise had to be completely rearranged. As Ashley Ross put it, “the products had to do the tempting”, the store owner had to draw the shopper’s attention to the merchandise. Candy and impulse items were strategically placed at the checkout where they would be easily noticed[1]. All items in the Piggly Wiggly (PW) store were price-marked for the shopper’s convenience, the clerks no longer required to do the fetching were freed up to keep the shelves stocked with dry goods and to assist customers. Another innovation, the shop attendants were issued with uniforms, as was the use of refrigerated cases[2]. Because PW operated on a high volume/low profit margin, lower costs were passed on to the customers. By drawing customers away from speciality retail stores the prices could be further lowered. PW Saunders’ self-serving store was the “supermarket franchise model” of the future, and as John Stanton (professor of the history of food marketing at Saint Joseph’s University, Pennysylvania) noted, the PW merchandise model was basically “the origin of branding”[3].

Early PW (Photo: Dick Whittington Studio/Corbis via Getty Images)

Copycats of the self-serve template
Saunders’ self-service stores were an immediate success…by 1922 there were 1,200 stores across 29 US states, 10 years later this number had ballooned out to 2,660 stores[4]. PW’s financial bonanza (over $180m turnover by 1932) spawned numerous imitators in the US retail industry – Handy Andy, Helpy Selfy, Mick-or-Mack, Jitney Jungle – all operating under Saunders’ patent system earning him royalties[5]. Another of the rival chains won no commendations for subtlety or originality in calling its derivative store idea, Hoggly Woogly!

‘Sole Owner of My Name’
Saunders’ substantial wealth derived from PW received a blow when the company’s share price on the New York Stock Exchange bottomed out after a bear raid by market speculators. Consequently Saunders lost $3 million and was forced into bankruptcy in the 1920s❈, ending his involvement with the company. The ‘Piggly Wiggly’ brand still operates with over 600 stores in 17 states, but it has no connection with Saunders’ family or descendants. In 1928 Saunders started up a new grocery chain which he called the Clarence Saunders Sole Owner of My Name Stores…the business initially flourished, accumulating 675 stores⚀. However with the onset of the Great Depression it also went into bankruptcy in 1930[6].

⍗ Keedoozle vending machine 1949

The indefatigable Saunders was soon at it again, devising a new take on his idea of a revolutionary grocery enterprise. In 1937 this materialised with Keedoozle – the prototype of an automated store. The name apparently a contraction of “key-does-all”✾…it worked like this, upon entering the store customers received a key which they used to access the merchandise. The complicated sounding process involved taking the items and a ticker tape from glass-enclosed cases (resembling vending machines) to the cashier who inserted the tape into a “translator machine” which had a two-fold action: it triggered electrical impulses which transported the goods down a conveyor belt, and at the same time adding up the customer’s bill. The added benefit for the customer, apart from convenience and speed, Saunders claimed would be 10-15% cheaper prices than Keedoozle’s competitors[7].In practice though, things didn’t go to plan. The electrical circuits couldn’t cope with the traffic during peak hours, there were breakdowns (unreliable machinery, high maintenance costs)…and delays (compounded by a tardy conveyor belt system). Customers regularly got someone else’s orders. In all Saunders had three attempts at getting the automated service right. In 1948 he came up with (another) new, ‘improved’ version of Keedoozle…again the re-launch was accompanied by Saunders’ penchant for extravagant claims[8]. Alas, this venture also met the same fate of the earlier projects, eventual bankruptcy.Foodelectric
All of the grocery store projects that Saunders launched went pear-shaped in the end. One last hurray for the grocery pioneer was meant to be his Foodelectric concept. As heralded by Saunders, Foodelectric would take retail automation to another level – the customer would “act as her own cashier”, doing the collecting and wrapping of the purchases herself. According to Saunders, it would “cut overhead expenses and enable a small staff to handle a tremendous volume”. Saunders’ new innovation with Foodelectric was the “shopping brain”, a portable primitive computer which allows the shopper to select and despatch the items, whilst registering the prices on the computer window[9].Clarence Saunders, grocer ⍗

Unfortunately Saunders (left) died in 1953 before he could open the first Foodelectric store. The track records of Piggly Wiggly, Sole Owner Stores and especially Keedoozle were not stellar success stories in the world of retail grocery, the notion of triple-bankruptcy does not connote good business practice or acumen. But Saunders was a visionary thinker outside-the-box, his concepts and novelties in the field were decades ahead of their time…the Memphis grocer is remembered today for pioneering a nascent sales model of self-service which paved the way for the development of the modern supermarket.

PostScript: Piggly Wiggly or Alpha Beta?
PW’s and Saunders’ claim to being the originator of American self-serve stores could be contested by Alpha Beta a Southern Californian grocery chain which opened its doors in 1914 (two years before PW). Alpha Beta also experimented with self-service – goods in its stores were arranged alphabetically (hence the company’s name). Alpha Beta merged with American Stores in 1961 and by 1973 it could boast to having over 200 supermarkets in California (unlike PW though, AB remained a regional, Californian phenomena). After a further merger with Lucky Stores in 1988 the “Alpha Beta” brand name ceased to exist[10].

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❈ also lost by Saunders due to his financial woes was the Georgian marble “pink palace” mansion, today the Memphis Pink Palace Museum and Planetarium which the Hairy Bikers visited on their American South culinary quest
⚀ Saunders established his own professional (American) football team to promote the new grocery venture, predictably the team was called the “Clarence Saunders Sole Owner of My Name Tigers”
✾ Saunders seems to contradict this explanation of the name’s origin in the ‘Life’ magazine article cited below

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[1] A Ross, ‘The Surprising Way a Supermarket Changed the World’, Time, 09-Sep-2016, www.time.com
[2] B Saar, ” ‘Keedoozle’ evolving into swiping”, (The Hawk Eye), 03-Aug-2003, http://sparky.thehawkeye.com
[3] Ross, loc.cit.
[4] ‘Piggly Wiggly’, Wikipedia, http://wikipedia.org
[5] PH Nystrom, Economics of Retailing (1930), cited in ibid.
[6] ‘Clarence Saunders (Grocer)’, Wikipedia, http://wikipedia.org
[7] B Cosgrove, ‘We Hardly Knew Ye: Remembering America’s First Automated Grocery Keedoozle’, Time, 25-Aug-2014, www.time.com
[8] “In five years”, he boldly (and unwisely) asserted in 1948, “there will be a thousand Keedoozles throughout the U.S. selling $5 billion worth of goods” (in reality there was only ever three (Memphis) built between 1937 and 1949!), ‘Saunders is sure Keedoozle will build his third fortune’, Life, 3-Jan-1949; Cosgrove, ibid.
[9] Life, loc.cit.
[10] ‘A Quick History of the Supermarket’, Groceteria.com Exploring supermarket history, www.groceteria.com

Port Chicago 1944 – A Black and White Situation: The Naval Mutiny and its Ramifications

Military history, Racial politics, Retailing history, Society & Culture, , , , , , , , , , , , , ,
San Francisco Bay

On 17th July 1944 a catastrophically massive explosion at the Port Chicago Naval Magazine in California resulted in the loss of 320 lives, the majority African-American sailors. Less than four weeks after the worst wartime disaster on American home soil, the Navy, without regard for the sensitivity of the situation, instructed the surviving Black sailors to resume loading munitions onto the USS Sangay standing at the dock. 258 of them refused, contending that the conditions at the dock being still unsafe, and commenced a work stoppage. Threatened with court-martial (and a possible death penalty) 208 of the sailors eventually backed down. The navy authorities subsequently took punitive measures against these seamen (forfeiture of pay, pension entitlements curtailed) and they were eventually returned to service elsewhere[1].

The remaining 50 were charged by the Navy with mutiny. The defence counsel and the African-American men themselves denied this charge all through the proceedings, arguing that at no time were they attempting to seize control from the frontline commanders or overthrow the authority of the Navy (as argued by the prosecution team), but were refusing to work in what was clearly an unsafe environment, a protest against their being used as “guinea pigs”[2]. As Robert Allen explained, the mutiny charge was levelled against the defendants because the rightful description of what they were doing, striking against deleterious working conditions, only applied to the civilian sphere[3].

The trial of the “Port Chicago 50”
A court-martial was arraigned to be held on the Navy’s administrative facility at Treasure Island in San Francisco Bay. The conduct of the trial was a travesty of equality before the law for the African-American servicemen involved … the accused black sailors were ridiculed as ‘primitive’ in their intellectual abilities, and “unreliable, emotional, lack(ing) capacity to understand or remember orders or instructions” (as the official ‘Finding of Facts’ stated[4]. The court hearings disintegrated into a shambles at times, eg, the judge fell asleep during the testimonies. After a six-week trial and a deliberation of only 60 minutes, a verdict was reached with unseemly haste – all 50 of the accused were found guilty of mutiny. The 50 convicted seamen were sentenced to between eight and 15 years imprisonment with hard labour as well as being on the receiving end of dishonourable discharges from the Navy[5].

Treasure Island court-martial site

One keen observer who attended the day-to-day court proceedings was NAACP❈’s Thurgood Marshall (later to become the first African-American judge on the US Supreme Court). Marshall was publicly critical of the trial, announcing: “This is not 50 men on trial for mutiny. This is the Navy on trial for its whole vicious policy towards Negros. Negroes in the Navy don’t mind loading ammunition. They just want to know why they are the only ones doing the loading!”[6]. In 1945 the NAACP produced a pamphlet entitled ‘Mutiny? The Real Story of How the Navy Branded 50 Fear-shocked Sailors as Mutineers’. Marshall and the NAACP focussed the issue very squarely on the racial dimension … the treatment of the convicted men was symptomatic of a broader pattern of discrimination by the Navy against African-Americans – by mid-1943 there were 100,000 Black men serving in the Navy, but not a single Black officer among them[7]. Marshall organised an appeal on behalf of the 50 prisoners, however in June 1945 the original verdict was reaffirmed by the naval authorities.

Aftermath and consequences of the mutiny trial
The Port Chicago mutiny had an immediate punitive outcome for the 50 Black sailors who were prosecuted, but in the long run it was a Pyrrhic victory for scientific (sic) racists and White supremacists (covert and overt) both inside and outside the military. The whole episode served in the long run to raise national consciousness about practices of racial discrimination within the US military forces. And it was to prove a catalyst and inspiration for the postwar Civil Rights movement[8]. For the Navy the ramifications of Port Chicago made itself felt in short time. By the end of the World War the Navy had, in piecemeal fashion, initiated its own reforms of discriminatory practices, anticipating President Truman’s official decreeing of desegregation of the American armed forces – which did not come into law until 1948. With the world war over the Navy found it untenable to justify the continuing incarceration of the Port Chicago 50 … in January 1946 all of the men were released and assigned to other details overseas. Significantly though, none received pardons for their ‘crimes’, the convictions remained on the books[9].

A dangerous job – for White servicemen!

The Port Chicago episode – a closed book reopened?
As Erika Doss has noted, “for decades the full story of the Port Chicago disaster of July 1944 was declared “classified” information and rendered virtually absent from historical narratives of the “good war”, as patriotic Americans like to call WWII[10]. The egregious treatment of African-American seamen remained an inconvenient chapter in America’s war history, one best forgotten (Port Chicago’s subsequent name change seems intended to support this objective of burying the thorny facts of the episode).

By the 1990s the whole shameful business had started to become more openly addressed … in 1994 a memorial to the Port Chicago 50 was created on the former base’s site. But in the same year these good intentions were turned on their head by a fresh Navy inquiry which found (unbelievably) that “race was not a factor” in the 1944 court case – a finding that would not be out-of-place in the annals of the “Flat Earth Society”!

Port Chicago Naval Magazine

(Photo: National Park Service)

A number of the convicted African-Americans then still alive agitated for a just resolution, a reversal of the wrongs perpetrated against them. One of “the 50”, Freddie Meeks was talked into requesting a pardon which was finally granted in 1999 by President Clinton[11]. However five others including Joe Small refused to request the same, steadfastly insisting that as they had committed no criminal act, they was no question of seeking a pardon.

PostScript: High hopes for justice with Obama
The continued denial of justice for the Port Chicago 50 led it to become a cause célèbre in the US. This remains the case in 2017 despite the fact that all of the convicted African-American sailors are now dead. Their relatives were among those calling on the Black president, Barack Obama, to exonerate “the 50” and overturn their verdicts. Disappointingly, Obama’s outgoing powers of presidential pardon, recently enacted, did not include any of the Port Chicago 50 in its number – though this was more to do with the Obama administration’s inability to find a legal mechanism to make this a reality, rather than any lack of will on the part of the president[12].

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❈ National Association for the Advancement of Colored People

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[1] ‘Port Chicago mutiny’, Wikipedia, http://en.m.wikipedia.org
[2] Joe Small, one of the survivors of the disaster and labelled as a ‘ringleader’ by the Navy, summed up the position taken by the 50 defendants,
“(we) weren’t trying to shirk work. But to go back to work under the same conditions, with no improvements, no change, the same group of officers…we thought there was a better alternative”, E Doss, “Commemorating the Port Chicago Naval Magazine Disaster of 1944: Remembering the Racial Injustices of the ‘Good War’ in Contemporary America’, American Studies Journal, Number 59 (2015), www.asjournal.org
[3] B Bergman, “War, ‘mutiny’ and civil rights: Remembering Port Chicago”, Berkeley News, 10-Jul-2014, www.berkeley.edu
[4] A Gustafson, ‘The Port Chicago Disaster: Race and the Navy in World War II’, (Turnstile Tours), 29-Aug-2014, www.turnstiletours.com
[5] Bergman, loc.cit.
[6] Marshall, quoted in NA Hamilton, ‘Rebels and Renegades: A Chronology of Social and Political Dissent in the United States’, (2002)
[7] Doss, loc.cit.
[8] ibid.
[9] US Secretary of the Navy James V Forrestal and Admiral Ernest King, working together, were instrumental in getting the wheels of integration in the Navy going forward, S Sundin, ‘Port Chicago – Desegregation of the US Navy’, (Sarah’s Blog), 28-Jul-2014, www.sarahsundin.com
[10] Doss, op.cit.
[11] C Nolte, ‘Clinton Pardons Wartime ‘Mutineer’ / Port Chicago black sailor of 50 in infamous case’, (SFGate), 24-Dec-1999, wwwsfgate.com
[12] ‘Full list: Obama pardons these 78 people, shortens 153 prisoners’ sentences’, (Pix 11), 19-Dec-2016, www.pix11.com

The Mass Appeal of Woolworths: A Brand Name Worth Copying

Commerce & Business, Financial history, Popular Culture, Retailing history, Social History, Society & Culture, , , , , , , , , , , , , , , ,

The seeming ubiquity of Woolies?
Woolworths is an internationally known name synonymous with traditional merchandising budgeted within the reach of the average consumer. When I was a kid I thought that the Woolworths variety store-cum-supermarket chain in cities and towns strewn all around Australia and New Zealand was an offshoot of the famous pioneering Woolworths “dime and nickel” company in the US. Until I actually went to South Africa I wasn’t even aware that there was Woolworths in that country as well. When I did discover its existence travelling around the RSA garden route I initially assumed that it too was a spoke in the far-reaching American F W Woolworth imperial retail wheel.

Imperial Arcade, Sydney: Woolworths Stupendous Bargain Basement, 1924

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Only much, much later did I learn of the total absence of any business or corporate connection between the three ‘Woolworths’ entities (sometimes displayed in singular form, sometimes plural, sometimes with an apostrophe). Both the retail chain in Australasia and the one in South Africa got the name ‘Woolworths’ through the same legalistic loophole. When a collection of businessmen began the Australian retail enterprise they acquired the name because the original American company had not registered the name in NSW (or anywhere in Australia). Thus the first store in Sydney CBD’s Imperial Arcade in 1924 was called Woolworths Stupendous Bargain Basement. The transition to the eventual nomenclature used (simply ‘Woolworths’) was not quite that simple. Before settling on ‘Woolworths’, the first notion that came to Percy Christmas (Woolworth’s inaugural CEO) and his directors was to call it ‘Wallworths Bazaar’, a pun on the American retailer’s name[1].

Somerset Mall ‘Woolies‘
Western Cape RSA

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Similarly, the South African ‘Woolworths’ acquired the name because there was no legal trademark impediment to it using the name in South Africa. Founder Max Sonnenberg and his son Richard started the first Woolworths store in Cape Town in 1931, and like the Australian namesake it has never had any financial connection to the prior existing F W Woolworth Co business. Woolworths South Africa-style was a different sort of retail animal, modelling itself on the upmarket British Marks and Spencer rather than the F W Woolworth bargain basement store concept[2].

Woolworths ground zero: Creating the retail template
The American phenomenon started in 1878 when Frank Winfield Woolworth, son of a poor potato farmer, started his first store in Utica, New York, the basis of his business strategy was to sell a wide selection of items at low price (initially all the merchandise was set at 5 cents each). The store was poorly located and failed abjectly but Woolworth persisted, opening a second dry goods and variety store the following year in Lancaster, Pennsylvania, and the formula eventually caught on. The entrepreneur expanded his store concept to a “five-and-dime” one (items set at 5¢ and 10¢ each).

The early F W Woolworth & Co

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Woolworth’s brother Charles (known as ‘Sum”) got in on the business, starting up his own retail stores soon after his older brother’s. Frank expanded F W Woolworth Co into a chain by mergers and partnerships with his cousin Seymour Knox I and with other relatives and friends❈. By gathering together a little club of owners Woolworth could purchase large quantities of goods directly from the manufacturers. As the US stores multiplied and prospered, Frank, remembering his own disadvantaged childhood, took pride in the fact that the “ordinary man” could afford to buy from Woolworth stores[3].

From 1890 FWW would embark on annual (sometimes biannual) large-scale buying trips to Europe, always paying the suppliers in cash on principle. Exposure to European manufacturers promoted awareness of market potentiality in other countries and may have prompted Woolworth’s eventual decision to branch out internationally. Anglophile Frank had his eye firmly on Britain as his 1890 trip diary indicates: “a good penny and sixpence store, run by a live Yankee, would be a sensation here”[4]. The chain had already extended north to Canada and subsidiaries were launched in the UK, Germany, Austria, Mexico and Cuba. The UK Woolworth sub-set itself opened stores in the Republic of Ireland, Palestine, Cyprus, the British West Indies and Southern Rhodesia (now Zimbabwe).

FW Woolworth store in Glasgow (Source: Pinterest UK)

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British F W Woolworth
Woolworths came to Britain in 1909 with the first store, selling clothing, stationary and toys, opening in Liverpool in northern England (family cousin Fred Moore Woolworth was the British arm’s first managing director). The pricing strategy matched the US “five-and-dime” one with items selling at 3d and 6d. The British chain flourished from the 1920s on, becoming a household name through the UK, so much so that most consumers in Britain and Ireland believed that their ‘Woolies’ shops were a local invention, “where sixpence once went a long way”[5].

Like the parent company in America, British Woolworths proved a retail innovator. The Liverpool store introduced lunch counters (followed by Blackpool and other large UK stores)回, which were the precursor to the standard food courts which became integral to shopping malls later in the 20th century[6]. The Woolies restaurants also adhered to the 3d and 6d price formula, although by 1941 there had been some increases, eg, a split lobster salad had risen to the princely sum of one shilling (12d or 1/-)[7].

Woolworth UK’s rise and fall
The 1930s marked a high point for Woolworth in the UK … outside of the Christmas season the chain was opening a new store every five days! During the price inflation of the late 1930s the Woolworth giant kept the sixpence limit on its prices by asserting its buying power to coerce suppliers into accepting lower margins for their goods¤. By 1958 F W Woolworth Co had amassed 1,000 branches in Britain[8].

The first signs of the downturn in Woolworth UK’s fortunes can be traced from the 1960s, the parent company forced the British arm into introducing Woolco, a series of one stop shops usually located out-of-town. These did not succeed, as they had in America because the UK lacked the US’s higher car ownership which suited out-of-town shopping. This was also an unwise move away from Woolworth UK’s strength, its high street stores. The UK business’ problems continued in the 1970s – Britain’s decimalisation in 1971 caught Woolworth unprepared because unlike other retailers it had resisted the move to self-service. The upshot was costly to Woolworth (£5 million and a five-year process trying to replace their over-abundance of store cash registers. Also in the 1970s a number of Woolworth stores in Britain and Northern Ireland burned down, attributed at least in part in incompetent and short-sighted management … resulting in brand damage to the trusted F W Woolworth name from which it never entirely recovered[9].

Closing down: Bromsgrove store (Worcs.)

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British elements (principally Kingfisher plc) finally gained a controlling interest in the UK enterprise in 1982, but Woolies, this British institution on the retail landscape ultimately fell foul of intense competition from cut-price retailers … many customers defected to British supermarket giants Tesco and Sainsbury’s. Falling sales❀ and a cash-flow crisis affected its entertainment arm. The downturn was exacerbated by the adverse effects of the Global Financial Crisis of the late 2000s. In 2007 Britain’s Woolworth Co experienced its first trading loss in 95 years … and much worst was to come. Over Christmas 2008 807 stores in the UK closed. With Deloitte’s administrating, the whole Woolworth chain had a complete shutdown over a 41 day period (months short of what would have been 100 years of operation in the UK). The carve-up saw restructure specialists Hilco Capital acquire the retail business and the Shop Direct Group (owned by the Barclay brothers) taking over the online retail sector … this too however was closed down in 2015[10].

Rise and fall of the prototype organisation
The America parent Woolworth company was spectacularly successful in creating a chain of “cash-and-carry” dime stores. By 1977 there were 3,414 stores in the US, Puerto Rico and the Virgin Islands and 1,884 outside of the US[11]. The pioneering merchandising methods of F W Woolworth with the founder’s emphasis on sales and customer service, and direct purchasing, established a solid base to enable his successors as CEO to continue to sustain and grow the Woolworth retail empire. However after WWII there was shift in the nature of shopping propelled by the burgeoning car culture … retailing in America and elsewhere moved on from the high street stores which had been the mainstay of Woolworth to the new malls located in the suburbs. Woolworth tried slowly to adjust but found itself less able to adapt to this change than its major competitors.

Woolco, Canada (Photo: Reddit)

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By the 1960s the original five-and-dime stores had morphed into other commercial entities: whilst the Woolworth flagship was retained there was a move into speciality stores and the large discount retail chain Woolco, which had a measure of success. Through the eighties and into the nineties the ailing FWW giant lingered on.

La Crosse (Wisconsin) store, 1992 (Source: La Crosse Tribune)

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In 1997 F W Woolworth Co in the US folded, following years of diminishing competitiveness with its rivals (the chain in 1996 posted a crippling loss of $US37 million). The Venator Group took its place and F W Woolworth ceased to be a trading name. Venator’s retail focus fixed on the foot ware market with Foot Locker and Kinney Shoes. This was a sudden end to a gradual process by which Woolworth Five-and-Dimes were overtaken by the likes of more dynamic enterprises, Wal-Mart, Kmart (formerly Kresge), Target and other commercial players who adapted to change far better than the veteran Woolworth[12].

F W Woolworth Co ultimately suffered the same fate as the British Woolworth – an accumulated obsolescence. As Jennifer Steinhauer summarised its plight, it had “faded in the collective memory of a nation warmly nostalgic for old stores but not willing to shop in them”. The pioneering retailer had become increasingly irrelevant to American consumers … the advantage of convenience it once possessed (where shoppers could get “lipstick, diapers and a milk shake at a discount, all under the one roof”) was now all-too-easily available at the abundance of handy drugstores, supermarkets and discount stores popping up everywhere[13].

PostScript: South Africa and Australia – Higher and Higher
Whilst the Woolworths brand name no longer decorates the urban commercial landscape in the US and Britain, the Woolworths name in the Southern Hemisphere is a different story. Over the last 20 years both Woolworths Holdings Limited (RSA) and Woolworths Limited (Australia) have experienced impressive growth through expansion and diversification.

Woolworths Holdings Ltd (WHL) achieved a net income of R3.12 billion in 2015 as a provider of clothing, footwear, accessories, groceries, beauty products, home wares and financial services. WHL has pursued an aggressive campaign of expansion, taking over companies in South Africa (Mimco, Trenery) and Australia (David Jones stores, Country Road, Witchery).

Woolworths Casula (NSW)

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Woolworths Limited (WL) made a net surplus of A$1.2 billion in 2016 with its variety stores (Big W), supermarkets (Countdown, Food For Less, Safeway, Flemings, etc), grocers (Thomas Dux). Part of the company’s impressive growth has come from diversification – into petrol stations (Caltex-Woolworths) and into liquor stores (taking over BWS and Dan Murphy’s), hotels and gambling (Australian Leisure and Hospitality Group)[14]. The Aussie Woolworths brand currently maintains a presence in Australia, New Zealand and India▤. Business success aside, it has not been all smooth sailing for the RSA and Australian companies … both WHL and WL have been embroiled in controversies in their home countries from time to time. In 2010 WHL removed Christian magazines from its shelves (a financial decision by Woolworths), provoking a huge outcry from the powerful Christian community in South Africa with WHL having to back down[15]. WL’s move into alcohol has been extremely profitable (together with Coles it is estimated to account for ¾ of Australian liquor sales). Allied to this is Woolworths’ impact on poker machine gambling … through its ALH arm it has in excess of 12,650 pokies in pubs. Anti-gambling campaigners have accused WL of targeting children to push up pub sales by offering loyalty reward cards to frequent gamblers (and placing “Kid’s Club” playgrounds close to the poker machine areas in its hotels)[16].

﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌﹌
❈ FWW’s mergers absorbed Knox & Co, Kirby & Co, Charlton & Co, C S Woolworth & Co and Moore & Co

回 the concept was an elaboration on F W Woolworth’s ‘Soda Fountain’ introduced in his Lancaster (US) store in 1907

¤ a similar bullying practice to that used by Woolworths Australia (and its rival Coles) this decade against local manufacturers

❀ one exception being the old Woolies favourite, the pick ‘n’ mix confectionary lines

▤ in 1989 Industrial Equity Ltd (IEL), part of the AdSteam Group (Adelaide Steamship Company), successfully took over Woolworths Australia … however the Woolworths company was subsequently publicly floated several years later

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[1] ‘Woolworths Limited’, Wikipedia, http://em.n.wikipedia.org

[2] after WWII the South African firm actually had a business relationship with Marks and Spencer for a number of years, ‘Woolworths (South Africa)’, Wikipedia, http://em.n.wikipedia.org

[3] One incident in particular resounded with him, being unable to afford an item in a Watertown store as a child, ‘Biography of F.W. Woolworth’, (Woolworths Museum), www.woolworthsmuseum.co.uk

[4] J Robinson, ‘Woolworths: the rise and fall of the departmental store giant’, The Guardian (London), 20-Nov-2008, www.theguardian.com

[5] ‘Christmas Past and Christmas Presents’, (Woolworths Museum), www.woolworthsmuseum.co.uk

[6] ‘The British Lunch Counter 1938-41’, (Woolworths Museum), www.woolworthsmuseum.co.uk

[7] ibid.

[8],’A potted history of F.W. Woolworth’, (Woolworths Museum), www.woolworthsmuseum.co.uk

[9] ibid.;’Preparing for decimalisation “D-Day” on 15 February 1971′, in ibid.

[10] ibid.; Robinson, op.cit.

[11] J N Ingham, Biographical Dictionary of American Business Leaders, Vol. 4

[12] F W Woolworth also tended to cling to outmoded lines, eg, in its toy department old-fashioned puzzles and no action figures, J Steinhauer, ‘Woolworth’s Give Up the Five-and-Dime, New York Times, 18-Jul-1997, www.nyt.com

[13] Woolworth Co’s competitors ultimately offered more choice of products, quicker checkouts and often lower prices,ibid

[14] Woolworths’ move into hardware stores via Masters Home Improvement was far less successful with the retail giant getting badly singed, E Stewart, ‘Masters: Five reasons Woolworths is pulling the plug on struggling hardware chain’, 18-Jan-2017, ABC News, www.mobile.abc.net.au

[15] ‘Woolworths (South Africa)’, op.cit.

[16] L Mulligan, ‘Woolworths under fire from anti-poker machine groups for introducing gambling rewards card in pubs’, ABC News, 17-Sep-2015, www.abc.net.au