A random visit to one of Nottingham's beloved libraries recently resulted in a read of "Trolley Wars : The Battle of the Supermarkets" by Judi Bevan. This post has a few notes from reading the book.
Perhaps the most interesting part of the book is the intial section looking at the history of Supermarkets Although stores were all served-at-the-counter style, there was some serious competition even in the Vicotrian age. The Co-op opened its first store in 1844, Home and Colonial opened in 1885 (and had a hundred outlets across the UK by 1915). The International Tea Company had a 200 stores while Thomas Lipton had around 100 branches. All of these chains focussed on suppling working class people with a limited range of products at low prices.
Sainsburys opened their flagship Croydon store in 1882 and fitted it out to a very high quality, with tiling, marble tops and mosaic floors. All in the name of hygeine but with the benefit of giving a cool and pleasant environment in the store. The chain would grow to have 255 stores by 1939
At the end of the nineteenth century, improvements in transport and the introduction of refrigeration made meat and other products from overseas much cheaper, an effect magnified by the fact that the British free trade policy at the time meant that there was little or no tariff on imported products.
The first self-service store was opened in 1916 in Memphis USA by Clarence Saunders and called "Piggly Wiggly" which was so successful that Saunders was able to franchise the model to hundreds of grocery retailers.
In the UK, the catalyst was a post WW2 trade visit by British firms to the US, which was attended by both Alan Sainsbury and Jack Cohen(Tesco's founder).
A key enabler of supermarket growth in the UK was the removal, in 1964, of "resale price maintenance", a policy that allowed the manufacturer to define the selling price of, say, a packet of Tetley tea bags, and for that selling price to be manadatory in all stores, whether corner shops or supermarkets. Jack Cohen lobbied Edward Heath for removal of RPM and was supported by the right wing free market Institute of Economic Affairs, whose pamphlet "Resale Price Maintenance and Shoppers Choice" was Institur to deforced all stores to sell a particular product (e. at the same price. With this removed, larger chains were able to use their buying power and scale to negotiate better prices with suppliers, and combine this with efficiecy savings to give the consumer a lower price.
Another factor was the rise of "own label" products in Supermarkets, which were given a reputation for quality by their promotion at chains such as Marks and Spencer.
In the 1980s, planning regualtions in the UK were eased under the Conservatives, which resulted in many out-of-town developments being built.
Together with the efficiencies brought about by the technologial changes such as bar coding, this allowed the big players such as Sainsburys, Asda, Tesco and Sainsburys to pull away from the others.
Then, in 1994, the Conservatives unexpectedly clamped down on out-of-town developements, putting a stop of the plans of the biggest players and leaving Tesco, who had purchased land extensively in the previous years, in a commanding lead that allowed them to leverage even better prices from suppliers.
Judi comments that, in response to newspaper campaigns in the 90s and 00s about "rip off supermarkets", the arrival of Aldi and other European chains to the market did more than any Government inquiry or legislation to focus the attention of the big players on their prices. Government inspectors found that prices had fallen, in real terms, by 9% between 1989 and 1998 and that, although still 12-16% higher than in France or Germany, this difference was mainly due to the strength of the pound in the late 90s.
Another factor, according to Judi, was simply supply and demand - in 2002 whole lambs were fetching "as little as £12 a head" but by spring 2014 they had "jumped to £40 a head after the least efficient shepherds pulled out of the market".
The rest of the book focusses on the personalities and battles between the large supermarkets, which is basically just a big (but interesting) soap opera.
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| Trolley Wars by Judi Bevan |
Perhaps the most interesting part of the book is the intial section looking at the history of Supermarkets Although stores were all served-at-the-counter style, there was some serious competition even in the Vicotrian age. The Co-op opened its first store in 1844, Home and Colonial opened in 1885 (and had a hundred outlets across the UK by 1915). The International Tea Company had a 200 stores while Thomas Lipton had around 100 branches. All of these chains focussed on suppling working class people with a limited range of products at low prices.
Sainsburys opened their flagship Croydon store in 1882 and fitted it out to a very high quality, with tiling, marble tops and mosaic floors. All in the name of hygeine but with the benefit of giving a cool and pleasant environment in the store. The chain would grow to have 255 stores by 1939
At the end of the nineteenth century, improvements in transport and the introduction of refrigeration made meat and other products from overseas much cheaper, an effect magnified by the fact that the British free trade policy at the time meant that there was little or no tariff on imported products.
The first self-service store was opened in 1916 in Memphis USA by Clarence Saunders and called "Piggly Wiggly" which was so successful that Saunders was able to franchise the model to hundreds of grocery retailers.
In the UK, the catalyst was a post WW2 trade visit by British firms to the US, which was attended by both Alan Sainsbury and Jack Cohen(Tesco's founder).
A key enabler of supermarket growth in the UK was the removal, in 1964, of "resale price maintenance", a policy that allowed the manufacturer to define the selling price of, say, a packet of Tetley tea bags, and for that selling price to be manadatory in all stores, whether corner shops or supermarkets. Jack Cohen lobbied Edward Heath for removal of RPM and was supported by the right wing free market Institute of Economic Affairs, whose pamphlet "Resale Price Maintenance and Shoppers Choice" was Institur to deforced all stores to sell a particular product (e. at the same price. With this removed, larger chains were able to use their buying power and scale to negotiate better prices with suppliers, and combine this with efficiecy savings to give the consumer a lower price.
Another factor was the rise of "own label" products in Supermarkets, which were given a reputation for quality by their promotion at chains such as Marks and Spencer.
In the 1980s, planning regualtions in the UK were eased under the Conservatives, which resulted in many out-of-town developments being built.
Together with the efficiencies brought about by the technologial changes such as bar coding, this allowed the big players such as Sainsburys, Asda, Tesco and Sainsburys to pull away from the others.
Then, in 1994, the Conservatives unexpectedly clamped down on out-of-town developements, putting a stop of the plans of the biggest players and leaving Tesco, who had purchased land extensively in the previous years, in a commanding lead that allowed them to leverage even better prices from suppliers.
Judi comments that, in response to newspaper campaigns in the 90s and 00s about "rip off supermarkets", the arrival of Aldi and other European chains to the market did more than any Government inquiry or legislation to focus the attention of the big players on their prices. Government inspectors found that prices had fallen, in real terms, by 9% between 1989 and 1998 and that, although still 12-16% higher than in France or Germany, this difference was mainly due to the strength of the pound in the late 90s.
Another factor, according to Judi, was simply supply and demand - in 2002 whole lambs were fetching "as little as £12 a head" but by spring 2014 they had "jumped to £40 a head after the least efficient shepherds pulled out of the market".
The rest of the book focusses on the personalities and battles between the large supermarkets, which is basically just a big (but interesting) soap opera.