The recent opening of Lucky’s Market sparked a flurry of excitement. People are buzzing about the amazingly low prices and exceptional, fresh, locally grown produce. Functioning as a central source of goods, Lucky’s provides customers a place to purchase food and socialize. Small, specialized “superettes” like The Fresh Market, known for its European-style experience, and Trader Joe’s, known for its Hawaiian T-shirt-clad crew and brand-name packaging of hard-to-find goods, thrive alongside larger supermarkets like Publix. Ward’s Supermarket has a niche as well, as it is the only locally owned grocery store in Gainesville.
How did so many different grocery store formats come about? Let’s trace the evolution of the supermarket industry from the birth of the chain-store concept in the early 1900s to the rise of club stores and supercenters.
In the early 1900s, customers took daily trips to local groceries and food stalls. As most people arrived on foot, stores often delivered what was purchased and sold on credit. There was a wide array of specialty shops: meat was purchased from a butcher, fish from a fishmonger, bread from a baker. Yet, the advent of the chain food store rivaled these small markets by providing everything conveniently under one roof, and the independent grocers either adapted or perished.
One of the first supermarkets, the Great Atlantic & Pacific Tea Co., introduced both scale and standardization to retailing in 1912. Comparable in impact to Henry Ford’s Model T production of automobiles, A&P began an economic store format where they sold branded products produced in A&P factories. Goods were delivered through a vertically integrated supply chain of factories, warehouses and trucks. Bypassing the middleman, the store was able to reduce costs. Other firms, such as Kroger, American Stores and Safeway, quickly adopted the new business model with the integration of both distribution and manufacturing. Continuing into the 1930s, large supermarkets challenged neighborhood stores with nationally branded, low-priced packaged foods.
Supermarket growth really took off after World War II. The increase of the automobile industry and home refrigeration encouraged customers to abandon daily trips to local groceries, meat and vegetable stalls for weekly trips to the supermarket. The invention of the shopping cart helped customers buy more, and services were added to make the shopping experience more pleasurable.
Where to go next but bigger? As in, warehouse size. The first club stores were introduced in the late 1970s and early 1980s, notably Costco and Sam’s Club in 1983 and Save-A-Lot in 1977. Club stores sell large, wholesale-size quantities, offering bargains attractive to customers and restaurant owners. A membership fee keeps the club stores exclusive, and a no-frills format keeps prices low. At the same time, natural food stores began cropping up, like Whole Foods and Trader Joe’s.
No matter the format of the food retail store, values of great food and great prices continue to be promoted. Even during this period of tight money, supermarkets, both large and small, national and local, are stressing quality, rather than price, and are continuing to prosper and grow.
[A version of this story ran on page 8 on 1/22/2015 under the headline “The evolution of the supermarket industry"]
