New Deals Of The 1930s

The decade of the Great Depression rang in the controversial birth of the supermarket, along with laws to ensure ethical business practices for a new era of retailing.

Just as the Great Depression began seeping into the American psyche following the stock market crash in late 1929, grocery stores began popping up across the urban landscape, promising lower prices, more convenience and free parking.

It was a deal too tempting to resist.

Setting the stage for the supermarket's success, auto registrations had increased from 8 million in 1920 to 23 million in 1930. Meanwhile, mass-circulation magazines and radio made it possible to advertise national brands.

King Kullen, the banner that's widely credited as the first U.S. supermarket, opened its doors in 1930, in a garage in Jamaica, Long Island, N.Y. Its founder, grocery veteran Michael J. Cullen, had proposed his idea to two of his former employers — Kroger and A&P — but they turned him down. Cullen's plan called for the following: Sell 300 items at cost, 200 at plus 5 percent, 300 at plus 15 percent and 30 at plus 20 percent, and establish a low-rent location, night hours, cash-and-carry, self-service and aggressive advertising.

Aggressive marketing was a key component to his new business venture, and it immediately put independent grocers, manufacturers and others in the business on the defensive. A full-page King Kullen advertisement threatened, "Chain stores read these prices and weep … [G]ive the poor buying public a chance."

King Kullen named itself "The World's Greatest Price Wrecker," while another Northeastern supermarket chain, Big Bear, billed itself as "The World's Greatest Price Crusher."

Big Bear opened in a former Buick factory in Elizabeth, N.J., in December 1932. The supermarket attracted customers from up to 50 miles away. Reacting to pressure from opponents of these new "price crushers," newspaper publishers rejected Big Bear's ads, and the New Jersey legislature voted to conduct an investigation into its practices.

Another, unrelated Big Bear — Big Bear Stores out of Columbus, Ohio — opened its first supermarket in 1934. Manufacturers boycotted the store, forcing the owner to buy from a wholesaler in a nearby town. Meanwhile, other food retailers attempted to prevent it from staying open in the evenings.

Also in Ohio, William H. Albers, a former president of Kroger, began opening supermarkets around Cincinnati in 1933. His stores were known as Albers Super Markets.

Kroger, for its part, had 50 supermarkets by 1935, and the company established itself as the first grocery chain to routinely monitor product quality and test foods offered to customers.

A&P, a chain that had already been operating successful grocery stores, opened its first supermarket in 1936. The 28,125-square-foot store in Braddock, Pa., home to Andrew Carnegie's first steel mill, was showcased as "enabling customers to select their own groceries without the assistance of a clerk."

Toward the end of the decade, A&P began consolidating its thousands of small-service stores into larger supermarkets, often replacing as many as five or six stores with one large, new one. By 1940, its store count had been reduced by half, but its sales were up.

Similar transformations occurred at all of the major chains.

Albertsons came onto in 1939, when Joe Albertson, with partners L.S. Skaggs and Tom Cuthbert, opened his first one-stop shopping market, called Albertson's Food Center, in Boise, Idaho. Albertson had been district manager for Safeway Stores; Skaggs' family helped build Safeway.

Hanging On

While supermarkets were an exciting new element in the retail world, the 1930s were no doubt a trying time for the U.S. economy. The January 1935 issue of Progressive Grocer noted that total retail sales declined an unbelievable 49 percent from 1929 to 1933 (retail sales of all kinds sold through all types of stores). By comparison, food stores showed a slightly smaller decline — 37 percent. The number of food stores declined 5 percent.

In PG's "1934 survey," published in the March 1935 issue, it was noted that total retail food sales had increased approximately 8 percent — definitely a silver lining to the gray clouds created by the Depression. By 1937, business was really looking up. Retailers closed the year at a high level, and Christmas trade was the best it had been in many years.

As business began perking up, independent supermarket operators were apparently en vogue. In the January 1937 issue, PG's editors recalled that in 1936, "independents on the whole gave chains the stiffest competition of their lives."

To keep up with the larger chains, some independents expanded and became supermarkets on their own. Others relied on wholesale grocers to help them, and many became affiliated with large voluntary or cooperative wholesale groups. Even more chain stores were going independent. For example, all of the chain stores owned by S.M. Flickinger Co. out of Buffalo, N.Y., were being converted into independently owned voluntary stores.

Cracking Down

During the 1930s, government played a big role in trying to reverse the losses of the Great Depression, and to make sure that business was being conducted ethically. The National Recovery Administration (NRA), a primary agency in President Franklin D. Roosevelt's New Deal government, was established to set minimum prices and wages, labor standards and competitive conditions in all industries.

PG's editors voiced the concerns of the industry in the January 1935 issue: "One of the matters of greatest interest to the grocers and all business is what is going to be done by Congress to the NRA, which goes out of existence by law in June, if not otherwise provided for."

After the NRA expired, the National Association of Retail Grocers pledged to keep to the ideals and objectives of fair trade practices in food merchandising.

Just a year later, in 1936, the Robinson-Patman Act — commonly referred to as "the chain store act" — became law. For independents, wholesalers and supermarkets, the law's provisions helped correct discount abuses and established guidelines under which food retailing and wholesaling could be carried out on a fair basis.

In PG's January 1937 issue, the editors incisively noted: "The outstanding happening of 1936 was the passing of the Robinson-Patman act. It came quite suddenly. … The Patman committee, before it even presented its law to Congress, conducted its famous investigation and revealed to legislators and the country the iniquities of trade, the secret discounts, allowances and rebates that prevailed."

According to a Grocery Manufacturers of America survey cited in the editor's note, after six months of operation under the act, 75 percent of the food trade still endorsed the "spirit of the act."

Another piece of legislation that greatly impacted the retail industry as we know it today was passed in 1938: the Food, Drug and Cosmetic Act, which required that beverages, foods, drugs and cosmetics be proved safe.

EDITOR'S NOTE: Readers are invited to share memorabilia illustrating the significant role supermarkets have played, by sending an e-mail to [email protected].

New Products Hit the Scene

1930: The first line of retail frozen foods went on display in Springfield, Mass., with products manufactured under the Birdseye brand.

1930: Frank Mars introduced a chocolate-and-nut candy bar called Snickers.

1932: Gerber introduced baby cereal, supplementing its line of strained baby foods that debuted in 1928.

1937: Kraft Macaroni & Cheese is introduced.

1937: The Hormel Food Co. debuts SPAM (name derived from Shoulder Pork HAM).

Supermarket Sales in 1933

Here's a glimpse at the annual sales at major U.S. grocery chains, as reported in Progressive Grocer's January 1935 issue: