In September 1916, Clarence Saunders opened his first ‘King Piggly Wiggly’ store in the city that today is better known as the home of Elvis Presley, Memphis Tennessee. About a year later Saunders patented (US Patent 1,242,872) his idea for the ‘self-serving store’ or what we today know as the ‘supermarket’. In doing so, Saunders changed the future of retailing on its head. Forever.
In his self-serving store the “customer will be able to serve himself”, be able “to review the entire assortment of goods carried in stock, conveniently and attractively displayed”, and ultimately after paying, “relieving the store of a large proportion of the usual incidental expenses, or overhead charges, required to operate it…”. Ultimately, the self-serving customer reduced staffing costs. Supermarket chains are big global businesses today offering convenience, choice and low prices to the time-pressed consumer.
Margins are notoriously thin meaning that they go to great measures to secure your custom. In the world of supermarkets information is king, nothing, but nothing is left to chance. Ever tried to quickly run into a supermarket to buy some milk or bread? Try the back of the store.
For to get to the daily necessities, they want you to pass by other products, see their attractive packaging, and hopefully buy them on impulse. Is it not funny how when the brain slows down, you start to scan the display shelves at the till and see those nice looking chocolates? And how one or more of those bars find their way into your basket? In the retail business it’s got a name: ‘impulse shopping’. Manipulating you to spend more than what you intended.
There are probably as many retails tricks as there are supermarkets. The most expensive brands are placed at eye-level so that you could see them first. The same logic applies to ‘sale items’.
Ever wondered why sale items are placed at the end of isles? That way they attract more attention and you would not be able to compare prices with potentially cheaper products that are hidden on the shelves. Often this is only smoke and mirrors, as the ‘normal prices’ are inflated to make savings look bigger.
Ever wondered why dips are placed next to the chips, or cones next to the ice-cream? Changes are that if you buy one, you will at least consider the other. Bakeries with fresh bread and pastries are placed at end of the store and they bargain on the fact that once the smells will lure you there, you would be tired and even hungry and, hence, would not be able to resist the temptation to add a few extras.
Music and colour are additional tools to manipulate shoppers. Recent developments in technology will enable stores to record signals from transmitters on the products in your trolley analyzing your path through the store, your product preferences, and spending breakdown. Coupled with the personal information on your debit, credit or loyalty card there would not be much they would not know about you.
But there is a much darker side to supermarkets than their manipulation of shoppers. Research on their supply chains and effects on local producers paint a worrying picture. The sheer size of these entities means that they can drive down producer prices to the point where they put producers either out of business or at least put them at serious risk.
Their demands for higher volumes, standards and uniformity are often too much for local producers who do not have the required technology, knowledge and inputs and as a result are put out of business. So are those without capital to cover “investment costs” associated with higher yield and better quality production practices. Given their control over economies of scale, supermarkets are able to enforce payment periods that are unfavourable to small producers.
Small producers do not have sufficient cash flow to wait 30 or 60 days for payments, and often end up in debt before going out of business. Fresh produce constitute a relatively small part of supermarkets’ operations, it is mainly the manufacturers of processed and packaged goods that has benefitted from the growth of supermarkets, not local producers of fresh produce.
Supermarkets often impose direct levies on local suppliers. These take the form of ‘slotting allowances’, ‘promotion fees’ and ‘special event charges’ or impose additional cost in the form of special packaging or changes in standards. Ultimately what the local market cannot supply is being replaced with imports putting local producers further under pressure.
Supermarkets have also changed our retail landscape. Fresh produce markets, ‘wet’ markets, small family-based retail and neighbourhood convenient stores are under-pressure or have closed down. Putting an end to ‘shopping with a human-face’. To make things worse, our governments’ seem ill equipped or politically unwilling to protect local producers and traditional retailers. When it comes to shopping we seem willing to sacrifice a lot to embrace manipulated notions of convenience, low prices and consumer choice.
A short while ago I read the following on a food blog, which more or less captures the essence of supermarkets for me: “A new giant supermarket opened near my house. It has an automatic water mister to keep the produce fresh. Just before it goes on, you hear the sound of distant thunder and the smell of fresh rain. When you pass the milk cases, you hear cows mooing and you experience the scent of fresh mown hay. In the meat department there is the aroma of charcoal grilled steaks with onions. When you approach the egg case, you hear hens cluck and cackle, and the air is filled with the pleasing aroma of bacon and eggs frying. The bread department features the tantalizing smell of fresh baked bread & cookies. I don’t buy toilet paper there any more.”