In the 1920s, the average working-class family spent about one-third of its budget on groceries. “Most households spent more to put dinner on the table than for their rent or their mortgage.”
And where “food was hugely expensive, relative to wages” neighborhood grocery stores delivered “only moderate amounts of nutrition” according to Marc Levinson. “Only token stocks of fresh fruits and vegetables” were offered. “Fresh fish and poultry were rarities.”
“The poorest third of American households consumed a sorely inadequate daily intake of vitamins and minerals, because there was little of either in the food that their neighborhood shops had for sale.”
And yet grocery stores were everywhere—on nearly every corner.
Last time we learned that by 1911, Philadelphia had more than 5,700 grocery stores, or one for every fifty-four families. By 1929, a national survey documented exactly how widespread the corner grocery actually was. There were 585,980 of them across the United States, “one for every fifty-one American families.”
Behind their wooden counters and “shelves of food …tended by store managers in dark vests, male store clerks in white aprons, and female clerks wearing long skirts and white blouses” was a world where the corporate managers determined what Americans would have to eat and from whom they purchased it. More and more, this tended to be from one or another of the expanding grocery chain stores.
Not that an independent grocer couldn’t make it. “Careful, intelligent grocers with fair credit can and do make good profits if conditions are at all favorable,” economist E. M. Patterson assured readers in 1911. Butter and eggs comprised “about 36 percent of the grocer’s total sales and provided only 10 per cent profit. Flour yielded 16 percent “but ham, bacon and lard less than 5 per cent.” Thing was, the majority of sales provided “gross profit of only about 9 percent” when 15 to 20 percent was needed to stay afloat.
Still, an independent grocer, no matter how dedicated or talented, couldn’t manage their way out of a discount situation created by the chains. As A & P’s John A. Hartford would later put it: “We would rather sell 200 pounds of butter at 1 cent profit than 100 pounds at 2 cents profit.” It might be “good for consumers, it was bad for the hundreds of thousands of retailers, wholesalers, and manufacturers who needed high food prices in order to make a living.”
According to Levinson, independent grocers “were being trampled in the price and premium wars” led by the big chains.
At the start of the 20th century, the Great Atlantic & Pacific (later A & P) “opened an average of one store every two weeks and developed a network of more than 5,000 wagon routes for “commissioned salespeople driving Great Atlantic & Pacific horse carts” throughout much of the United States.
This market dominance paved the way for the rise of the supermarket after World War II. “While consumer spending on food rose by half between 1945 and 1948, A&P’s sales doubled and its profits trebled. In 1945, chains accounted for 31 percent of grocery sales. Just two years later, their share was 37 percent.”
“The number of supermarkets nationwide, around two thousand in 1941, hit fifty-six hundred in 1948” and the supermarket controlled “one-quarter of all grocery sales.”
The supermarket “was a national phenomenon.” But more to the detriment of places like Philadelphia, “it was a suburban phenomenon.” The city’s aging neighborhoods, with their failed and failing corner grocery stores, were transformed into food deserts.
[Sources: Marc Levinson, The Great A&P and the Struggle for Small Business in America (New York: Hill and Wang, 2011); E. M. Patterson, “The Cost of Distributing Groceries,” The Annals of the American Academy of Political and Social Science, Vol. 50, (Nov., 1913), pp. 74-82.]