HISTORY58 - Grocery Stores
The recent (ongoing?) pandemic greatly reduced Pat’s and my daily outings; seems like our trips were limited to the grocery store. Eventually realizing that I didn’t know much about the history of grocery stores, I decided to write a blog on the subject.
My principal sources include
“Grocery Store” and “Supermarket,” Wikipedia; “The History of the Supermarket,”
omgfacts.com; “How we wound up with supermarkets: A history of the grocery
store,” 10best.com; “The history of the refrigerator: ancient origins to
today,” whirlpool.com; “What Happens to Unsold Food in Supermarkets?”,
thegrocerystoreguy.com; “What do Grocery Stores do with Leftover Food?”, smartcapitalmind.com;
“21+ Grocery Shopping Statistics for Every CUSTOMER in 2021,” spendmenot.com;
“Top 10 Grocers n the United States - 2020 List,” foodindustry.com; “How Your
Grocery Store’s Layout is Costing You Money,” realsimple.com; “The Future of
Grocery Retailing,”
progressivegrocer.com; and many other online sources.
Introduction
A grocery
store or “grocery” is a store that primarily retails a general range of
food products, which may be fresh or packaged.
But
that hasn’t always been the definition of a grocery. Beginning as early as
the 14th century, a grocer (or "purveyor") was a dealer in
food dry goods such as spices, peppers, sugar, and (later) cocoa, tea, and coffee. Because these items were often bought in
bulk, they were named after the French word for wholesaler, or "grossier.” This, in turn, is derived from the Medieval
Latin term "grossarius,” from which the term "gross" (meaning a
quantity of 12 dozen, or 144) is also derived.
As increasing numbers
of staple food-stuffs became available
in cans and other less-perishable
packaging, the trade expanded its province. Today, grocers deal in a wide range
of staple food-stuffs and such perishables as dairy products, meats,
and produce. Such goods are, hence, called groceries.
A supermarket is a large form of the traditional grocery store that
offers a wide variety of food and
household products. A supermarket
typically comprises meat, fresh produce, dairy, and
baked goods aisles, along with shelf space reserved for canned and packaged goods,
as well as for various non-food items such as kitchenware, household cleaners,
drugs, greeting cards, clothes, pet supplies,
and seasonal items like Christmas wrapping paper.
Other food-related
services offered at some supermarkets may include delicatessens, prepared food,
sushi bars, health food, wine and liquor, and cafes/coffee shops.
Additional non-food services provided
by supermarkets could include flowers, banks, staffed pharmacies, childcare centers, photo processing,
DVD rental, and gas stations.
In everyday U.S. usage, "grocery store" is synonymous with
“supermarket.” In this history blog, I
will use the two terms interchangeably after the introduction of the
supermarket in 1930.
Before Grocery Stores
The earliest humans were called
“hunter-gatherers” because they hunted wild animals for food (and useful
byproducts like skins for clothes), and gathered edible plants to supplement
their diet - often traveling great distances to hunt and forage.
Humans started to farm 4,000 - 5,000 years
ago in the U.S., and from then on, generally had food available close-by their
settlements. “Farmers markets” became an
early precursor of grocery stores.
In the years before European
settlement of America, Native American crops included a variety of vegetables,
nuts, and grains. Their diet also
included meat and fish.
When European colonists arrived in
America in the early 1600s, they adapted to many Native American crops, planted
familiar crops from the Old World, and raised domestic animals like cows
and pigs for meat, and cows for dairy products.
Chickens, ducks, and geese were a source of meat and eggs.
Through
the mid-1800s in America, most fruits and vegetables were grown on farmsteads,
and families processed meats such as poultry, beef, and pork. People had seasonal diets. In the spring and summer months, they ate many
more fruits and vegetables than they did in the fall and winter. During those colder seasons, families found
ways to preserve their food.
The
four main ways of preserving food up to the late 1800s included drying, smoking,
salting, and natural refrigeration. The
first three methods drew moisture out of foods to prevent spoiling. Fruits and vegetables could
be dried by being placed out in the sun or near a heat source. Meat products could be preserved through
salting or smoking. A salt cure involved
rubbing salt into the meat, which was then completely covered in salt and
placed in a cool area for at least twenty-eight days. During this time, more salt was constantly
added. When the meat was no longer damp, it was washed, then shelved or bagged,
and left to age. Families would hang
meat preserved through a smoke cure in rooms or buildings with fire
pits. For a month, the meat was
constantly exposed to smoke, which dried it out while adding flavor. Using different kinds of wood for the fire,
such as hickory or oak, could produce different tastes.
Natural refrigeration was practiced since ancient times. People
took advantage of rivers and lakes by storing food directly in the cold water,
or cutting ice for ice houses. Storage
pits in the ground were filled with snow or ice, and often covered with
insulating materials like straw or sawdust. If ice or snow wasn’t an option, underwater or
underground storage, like cold cellars, provided refrigeration. People also began building their own iceboxes
for cold storage, using chunks of ice or snow in boxes insulated with natural
materials like sawdust or seaweed. Manufactured
iceboxes that looked closer to modern refrigerators became popular in the
1800s. These designs consisted of insulated metal or wooden cabinet-type
structures with a tray or compartment that held a large block of ice. These ice
blocks were regularly delivered to households with iceboxes.
The modern electrical/mechanical
refrigeration process we know today grew from the work of numerous inventors in
the 1800s. American Jacob Perkins
invented the first vapor compression system in 1834, while German professor
Carl von Linde patented a new process for liquefying gases in the late
1800s. Refrigerator innovations led to
widespread commercial refrigeration at the turn of the 20th century
for industries like breweries and meatpacking plants.
In 1913, American Fred W. Wolf
invented the first home electric refrigerator, which featured a refrigeration
unit on top of an icebox. Mass
production of domestic refrigerators began in 1918 when William C. Durant introduced
the first home refrigerator with a self-contained compressor.
Timeline of Grocery Store
Development
This section will cover the
history of grocery stores and supermarkets in timeline form:
Late 19th/Early 20th Century.
Before grocery stores became a one-stop-shop for food, people shopped at
separate, small stores for each category of food. A city street would be lined with stores for
fruits and vegetables, dairy shops, butchers, fishmongers, and grocers that
exclusively sold dry, packaged goods.
Some businesses began to offer dry goods and grains in the
same store, but customers had to hand their grocery lists over to clerks at
the store counter, and then wait for them to collect and bag up the goods.
Early grocery store where the clerk collected and bagged the dry goods.
1916. The
first self-service grocery store, Piggly Wiggly, was opened in
1916 in Memphis, Tennessee, by Clarence Saunders, an inventor and
entrepreneur. Self-service
gave customers the power to pick and choose what products they wanted, which
led companies to experiment with new ways to attract consumers. Saunder’s radical
concept store debuted many of the innovations synonymous with today’s grocery
shopping experience, such as food aisles, individual item price marking, checkout lanes, shopping baskets, employee uniforms, and
purposeful product placements, for example candy (and other impulse items) at
the checkout. (See below for more on grocery store layout strategies.) Saunders' invention allowed a much smaller number of
clerks to service the customers.
The first self-service grocery store, Piggly Wiggly, opened in Memphis, Tennessee in 1916,
The
success of Piggly Wiggly was phenomenal.
At its peak in 1932, the Piggly Wiggly operated 2,660 stores.
1920s.
Early
self-service grocery stores did not sell dairy products, fresh meats, or
produce. But
food processing was advancing significantly, with canned and frozen foods,
ready-to-make mixes and even sliced bread.
During this era,
mom-and-pop grocery stores ruled the landscape, and their shops were
considerably smaller and more limited in selection than what we see today. Butchers and produce vendors had traditionally
operated separately, but often in close proximity to grocery stores for
consumer convenience.
Small regional chains
such as the Great Atlantic & Pacific Tea Co. (A&P), Kroger, Safeway,
and American Stores and National Tea were around and growing their presence,
selling basic nonperishable foods with counter service. These retailers were leading the movement to
transition from credit and delivery, to cash and carry.
During
the 1920s, many grocery stores followed Piggly Wiggly’s example and converted
to self-service.
1930s -
1940s. Concurrent with the development and widespread use of modern
refrigeration, combination stores that sold perishable items were developed in
the 1930s.
In 1930, former Kroger and A&P
executive Michael Cullen opened King Kullen, the first true supermarket, in the
Queens borough of New York. The store operated under the slogan "Pile
it high. Sell it low." At the time of Cullen's death in 1936, there
were seventeen King Kullen stores in operation.
Other
established American grocery chains in the 1930s, such as Kroger
and Safeway Inc., at first resisted Cullen's idea, but eventually
were forced to build their own supermarkets as the economy sank into
the Great Depression, while consumers were becoming price-sensitive at a
level never experienced before.
The shopping cart was introduced in
1937 at Humpty Dumpty locations by Sylvan Goodman. The design, inspired by folding chairs, was
initially snubbed by shoppers. Men found them effeminate, and women resented
their likeness to baby strollers. Inventor Orla Watson later pioneered the rear
folding wall "nesting" version of the cart still used today.
During World
War II, ration coupons were
used for families to buy sugar, gas, coffee and milk.
A Kroger grocery store in Lexington, Kentucky in 1947.
1950s -
1960s.
Supermarkets
proliferated across the United States with the growth of automobile ownership
and suburban development after World War II. Most American supermarkets were located in
suburban strip shopping centers as an anchor store, along with other
smaller retailers.
The 50s and 60s were the golden age of the supermarket. New stores opened every day. These were also the decades when advertising
hit its prime, so chains competed with each other to have the most exciting
logos, fonts, and building designs.
The one-stop shopping phenomenon
expanded upon the proven single grocery store model by adding departments
specializing in clothing, pharmacy and health goods, homewares and furniture,
music, and even electronics and appliances.
Stores also started getting larger.
Large supermarket in 1964.
With most people paying by personal
checks, grocery store checkout lanes log-jammed as cashiers and customers
awkwardly juggled handwritten checks, balance books, and driver's licenses
between them. Accepting personal checks
required getting all sorts of personal information not printed on the check,
like home phone numbers. Credit cards
and debit cards, introduced in the 50s and 60s, dramatically shaved checkout
times.
Store coupons with product savings
were actually invented by Coca-Cola in 1887, but the idea didn’t quite pick up
until the 1950s, when The Nielsen Coupon Clearing House formed to help manage
the redemption of coupons.
In the 1950s, supermarkets frequently
issued trading stamps as incentives to customers. Soon most chains started to issue
store-specific "membership cards," "club cards," or
"loyalty cards". These
typically enabled the cardholder to receive special members-only discounts on
certain items when the credit card-like device was scanned at check-out.
In 1962, curbside pickup was started
in some stores.
1970s to Present. In
the early 70s, the canned-food craze of the nuclear era was ending, and more
and more Americans began craving food that was natural and organic. Small health food stores popped up around the
country, but there was no supermarket providing a large amount of natural food
in one place until 1980,
when Whole Foods Market was formed
Product coupon innovations came
in the form of the Valpak neighborhood savings booklets in 1968, and the first
newspaper coupon section insert in 1972.
Target debuted scannable smartphone coupons in 2010.
Single-use plastic shopping bags first became available in
the U.S. in 1979. In 1982, two of the
largest grocery store chains in the country, Safeway and Kroger, began offering
single-use plastic bags to their customers. By the end of the 1980s,
plastic bags had almost entirely replaced paper bags. In the 2010s, concern over the environmental
effects of non-biodegradable plastic bags, producing litter on land and
polluting our oceans, led to eight (so far) U.S. states banning plastic
bags. Today, most grocery stores
aggressively encourage shoppers to use their own reusable bags.
The first self-checkout machines were designed and patented
in the 1990s, but grew to prominence in the early 2000s. Conceived as a
cost and time saving alternative to staffed checkout lanes, they allow one
employee to supervise several kiosks at once, as customers scan their own
items, weigh produce, input coupons, pay for their transaction, and be on their
way. The systems utilize barcode technology, combined with a touchscreen
interface, pre-recorded voice commands, and a system of scales to manage
potential thefts.
Self-checkout at grocery stores has been widely available since the early 2000s.
In 1997, HomeGrocer.com introduced online grocery shopping,
creating an infrastructure needed to support the business, including a huge
warehouse and a fleet of vans. Online grocery shopping grew steadily with
many stores offering this service. The COVID-19 pandemic greatly
accelerated the growth of online grocers, and in the first few months of the 2020
pandemic, online grocery shopping increased by 300%. Today, you can shop online, and schedule a
day/time to pick up your “bagged” groceries, or schedule a home delivery.
Today,
if you have a loyalty card and shop online, supermarkets will build up a
demographic profile of you, and collect data about what you buy, how loyal you
are, and how much you spend. In this way
they can attract you with discount offers on your food preferences.
The
advent of the digital technology and the internet has enabled some truly
remarkable grocery shopping aids. Today,
you can just “Google” the product you’re looking for, and your electronic
device will tell you where (what store) you can find the product, its availability,
and even its location in the store by aisle number.
By
the way, I’m old enough to have seen a dramatic change in the grocery store “food
experience” over my lifetime. From
limited supplies of basic food items and barely edible TV dinners to an almost
unlimited variety of fresh food items, frozen prepared foods, electronic
shopping assists, and all the extras that contribute to one-stop shopping
Big Box Competition
In the 1990s, Kmart and Walmart (and
later Target and Costco) began adding grocery departments to many of their
already gargantuan stores. These stores
soon added curbside pickup and delivery services.
The recent trend towards larger stores
offering groceries has forced consolidation of the grocery businesses in some
areas, and the entry of variety stores such as Dollar
General into rural areas has undercut many traditional grocery stores. The global buying power of such very
efficient companies has put an increased financial burden on traditional local
grocery stores as well as the national supermarket chains.
Walmart and other big box stores have taken over the grocery market.
Many early supermarkets began
as chains of grocer's shops. The development of supermarkets and
other large grocery stores has meant that smaller grocery stores often must
create a niche market by selling unique, premium quality, or ethnic
foods that are not easily found in supermarkets. A small grocery store may also compete by
locating in a mixed commercial-residential area - close to, and convenient for,
its customers. Organic foods are also
becoming a more popular niche market for smaller stores.
Disposing
of Unsold Food
Packaged foods have expiration dates, and in most areas, the
law prevents stores from selling expired foods.
This is for consumer safety, to ensure that no one purchases food that
has gone bad. Produce does not have an
expiration date, but will begin to mold, rot, wilt, or look unsightly. As a general rule, grocery stores try to
reduce the amount of leftover food that they end up with, since unsold food
generates no money for the store.
Often, a grocery store will place food on sale before it
expires, to encourage consumers to purchase it.
Expired food is often donated, composted, or thrown out.
If a grocery store suspects that it is going to end up with
leftover food, it may donate products that are about to expire to
charities. Food banks and homes for the
elderly both benefit from donations of food that is perfectly safe, but was
purchased in excess. Generally, a
grocery store donates leftovers that have at least two weeks before they expire
to ensure that they will be used in time.
A grocery store may donate edible but unsalable produce to
charity or a zoo. Some grocery stores
may donate produce items to animal farms, or sell the
excess cheaply to farmers to feed their stock.
Many grocery stores also get rid of bread and dairy products this way.
If
produce starts to go bad, a grocery store may attempt to compost it. Many grocery stores have access to separate
greenwaste collection so that they can compost produce, bread, and some other
products. The leftover food is tossed
into a large dumpster, which is periodically emptied
and taken to a composting facility. Other food is thrown out, sometimes in locked
dumpsters to prevent liability issues related to
dumpster diving.
It is
estimated that every year, more than 40 billion pounds of food from grocery
stores gets thrown away. Much of the
food is still technically edible, but most large grocery chains severely limit
what food gets donated once it’s no longer able to sell it. The reason is out
of fear of litigation due to poor or vague laws and regulations.
Each year, more than 40 billion pounds of food from grocery stores gets thrown away.
A recent report by Harvard Law School looked at the laws on the books in all 50 states as far as
food safety regulations regarding food donation. Their report concluded that: “Guidance
regarding food safety for food donations vary widely from state to state. Many states have no regulations or guidance.” In terms
of legislators encouraging, supporting, and protecting retailers in donating
more of what’s currently being thrown away, we have a long way to go.
Grocery Shopping Facts & Numbers
1. The U.S. grocery
market size was $741.4 billion in 2020.
2. The
top 10 American supermarket companies in terms of 2020 sales are (source
foodindustry.com):
1.
Walmart
(Walmart and Sam’s Club): $341 billion
across 4,756 stores
2.
Kroger
(Kroger, Harris Teeter and Smith’s):
$122 billion across 2,757 stores
3.
Costco: $103 billion across 543 stores
4.
Albertsons
(Safeway, Albertsons, and Vons): $62
billion across 2,252 stores
5. Ahold
Delhaize (Food Lion, Stop & Shop and Hannaford): $44 billion across 2,252 supermarkets
6.
Publix
Super Markets: $38 billion across 258
stores
7.
H.E.
Butt Grocery: Estimated $28 billion
across 340 stores
8.
Meijer: $20 billion across 248 stores
9. Wakefern
Food (ShopRite, Price Rite, The Fresh Grocer, Dearborn Market and Gourmet
Garage): $16.6 billion across 354
supermarkets
10.
Aldi
and Whole Foods (tie): Estimated $15-16
billion
3. On
average, grocery stores make about 2.2% profit on each product
they sell
4. The average time spent grocery shopping is 41 minutes, with
an average of 1.5 trips per week.
5. Saturday is the most popular day for grocery shopping.
6. The
best day of the week to go grocery shopping is Wednesday, early in the morning.
While new deals will be starting, old
deals will probably still be in place too. Plus, you’ll have access to fresh products and
a quiet store.
7. 64% of U.S. consumers have shopped for groceries online.
8. U.S. online grocery sales totaled $95.8 billion in 2020.
9. Online grocery sales in the U.S. are estimated to reach
$187.7 billion by 2024.
Grocery Store Layout
Strategies
To explain how grocery story product layout influences
customer spending, here are some comments from a team of merchandising experts
to map out a typical supermarket:
According to consumer expert Paco Underhill, author of Why
We Buy: The Science of Shopping, "Two-thirds of what we buy in the
supermarket we had no intention of buying." Supermarkets not only rely on such
behavior - they encourage it. Every
aspect of a grocery store's layout - from the produce display near the
entrance, to the dairy case in the back, to the candy at the register - is
designed to stimulate shopping serendipity.
Flowers: Located just
inside the entrance. "Flowers can enhance the image of a
store," explains Wendy Liebmann, founder and president of WSL
Strategic Retail. "Consumers walk
in to something that is pretty, smells great, and builds the notion of
'fresh.'"
Produce: Located immediately past the flowers to
create a tempting sensory experience. "Stores need to communicate to
shoppers that produce is fresh or else people won't buy anything," says
Liebmann.
Bakery: Located in a
corner beyond the entrance. "The
bakery gets your salivary glands going," Underhill says. This makes you feel hungry, and "the
hungrier you are when you shop, the more food you will buy."
Endcap Displays: Located at the
ends of the aisles. Product manufacturers pay for prominent
"endcap" placement - on the ends of the aisles - to advertise new or
popular products.
General Merchandise, Cooking Ingredients, and Canned Goods: Located in the center
aisles to draw consumers deeper into the supermarket
and expose them to non-essential items along the way.
Dairy Products, Eggs, Meat, and Other Staples: Located along the back
wall of the store. "Stores
typically put these items in the farthest reaches of the store to expose
customers to the maximum amount of product on their 'quick trip' so they will
impulsively buy other things," says Michael Tesler, founder of Retail
Concepts.
Impulse Buys (Candy, Magazines, etc.) Located by the registers
and exit to turn waiting time into buying time. This is the most profitable
area of the store, Underhill says.
After the
end of prohibition in 1933, states were allowed to regulate alcohol sales
themselves. But it resulted in a wide
variety of laws from state to state. By
one accounting, 18 states currently allow grocery stores to sell wine and
spirits. Many states allow you to buy
beer in grocery stores. But some
only allow you to buy wine. Some states
will allow you to buy liquor on Sundays, but even some of those don’t let you
buy it before noon.
Thankfully,
Arizona is one of the states that permits grocery stores to sell wine and
spirits. In the supermarkets that Pat
and I frequent, the wine and spirits section is near (or on) the outside
perimeter of the store.
By the
late 20th to early 21st centuries, supermarkets started
to include delicatessens to sell ready to eat food products such as cooked meats,
cheese, prepared salads and sandwiches, and today even sushi, hot food and
prepared meals.
Again,
in the supermarkets that Pat and I go to, the deli and prepared food section is
located on the outside perimeter of the store.
Typical grocery store layout.
Shopping Tip: Most
shoppers tend to spend the most time in the center aisles of grocery stores,
even though the outside perimeter of the store is
where you’ll find the freshest foods, including produce, meat and dairy. Fresh foods are generally healthier than the
processed foods you’ll find in the center aisles. Because the items in the outside perimeter are
fresh, you can better control the fat and sodium intake in your diet. Maintaining a healthy diet means watching what
is added to foods, as well. Many foods in the center aisles contain
preservatives.
Shelf Layout: The placement of items on store shelves is not
haphazard.
Top Shelf: Smaller brands, regional brands, gourmet
brands. The items here give "tone
and texture" to the shelf layout, Liebmann says, helping the supermarket
stand out from its competitors. These
smaller brands usually don't have the budget to pay for more favorable
placement
"Bull's-Eye Zone" (Second and third shelves from
the top): Bestsellers
and other leading brands. "Brands that sell best are always in
what's called the 'bull's-eye zone,' front and center, right in your sight
line. It is the best placement, and the
manufacturers have to pay for it," says Craig Childress, COO of
Envirosell. Tesler adds: "There's no advantage for
the supermarket to show you the lowest-priced item in the most effective spot. So here you tend to see higher-priced items or
items with the highest markup." Secondary brands hoping to benefit from being
shelved next to the leaders also pay for placement in the bull's-eye zone.
Kids' Eye-Level Shelf: Products
with kid appeal. "Kids can react
and reach out to a product," says Tesler.
Bottom Shelf: Store and private-label brands;
oversize, and bulk items. "Store
brands go on the lower shelves because people who buy store brands will always
hunt for them," says Childress. "The supermarkets carry bulk items to
compete with warehouse clubs like Sam's and Costco," Liebmann explains,
and bulk items are awkward to store anyplace but the bottom shelf.
Driven
by lower profit margins and high competition, grocery stores are desperate to
make their stores better than their competitors. One of the best ways to do that is by changing
the layout periodically. But it’s also a
way to force shoppers down every aisle, counting on them making additional
purchases they hadn’t planned on making.
Future of Grocery Stores
Emerging in 2018, Amazon’s “Just Walk
Out” technology will completely eliminate checkout lines and the necessity of
human cashiers to staff them. The system
uses hundreds of cameras and sensors along with a combination of sophisticated
technologies to determine “who took what” from the store. When a shopper enters the store, he or she
scans a special app. When they take
something off the shelf, it’s added to their virtual cart. When the shopper puts the item back on the
shelf, it comes out of their virtual cart. After they leave the store, they’re charged for
the items they left the store with. The
app on consumer smartphones tracks and charges the items that people walk out
with.
“Just Walk Out technology” will completely eliminate checkout lines and the necessity of human cashiers to staff them.
Another
emerging technology is Microsoft Azure-backed Kroger Edge
technology. Grocery
aisles will be outfitted entirely with digital prices, as well as monitors
displaying video ads for various products.
This new technology will allow Kroger
to change
prices and activate promotions across its stores,
instantly. With the customer’s shopping
list prepared beforehand, items will light up as they walk down the aisles. You could even set dietary restriction
profiles online, and allow the store to build meal plans for vegans or those
with food allergies, just by walking up and down the rows. You could even get information about how to
prepare the food you’ve selected.
Robotics is another technology
expected in future grocery stores. One example is in picking and packing technology. We’re looking at robots that can move
backwards and even replicate the human hand in their gripping abilities. And, since labor challenges seem likely to
continue plaguing the grocery industry, the grocery industry expects to see
further development in labor systems and robots that can assist in menial tasks
in the store and in warehouses.
Sorry, I’ve got to go. My smart watch is telling me that my
drone-delivered grocery order is about to land at my front door.
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