Market forces

26th March 2004 at 00:00
From humble beginnings in 1916, supermarkets have evolved into retail giants with many tactics to make us march up the aisles. Jerome Monahan reports

In the winter of 19445, wartime British audiences were enjoying the latest Hollywood import, a Billy Wilder thriller in the style later dubbed "film noir". It was Double Indemnity, a tale of adultery, insurance fraud and murder. At one point the anti-hero Walter Neff (Fred MacMurray) meets his partner in crime Phyllis Dietrichson (Barbara Stanwyck) in a neutral spot to go over their plans - including the dispatch of Phyllis's husband. The location they chose was amid the aisles and groaning shelves of one of the new style of shops - a supermarket.

Such a place would have been a familiar to US audiences - by the mid-1940s more than two-fifths of all US food sales were being rung up in such outlets. However, on this side of the Atlantic, in a Britain experiencing it's fifth year of conflict and rationing, such a setting and such a seeming abundance of products probably seemed as exotic as the glamorous protagonists and the grim crime they were rehearsing.

In fact, there was one supermarket-style shop in the UK: a Co-op had opened inside a Romford department store in 1942, but this was an anomaly in a country in which shopping had remained more or less unchanged for more than a century. It was a process requiring the customer to trail from one specialist shop to the next, queuing patiently in each one for service or advice bestowed by a shop assistant. As such it reflected a world - already vanished for those women caught up in the struggle to combine domestic duties and war work - in which time was not of the essence. A world in which the buyer anticipated delays and expected their purchasing to be a highly mediated affair - their food literally passing through another's hands into packets or bags.

By the Second World War, such practices would have seemed outlandishly quaint in the US where experiments in modern food retailing had been going on for more than 20 years. In 1916 entrepreneur Clarence Saunders opened the first in what would become a nationwide phenomenon - the Piggly Wiggly stores. Although not true supermarkets, given their relatively small size, they did contain many of their elements, including an abundance of groceries on display and an aisle arrangement requiring the customer to behave like a mouse in a maze, literally wiggling their way around the shop floor.

Among the several rivals for "first-ever supermarket" accolade, one of the most influential was the Big Bear chain founded in 1932. At the height of the Depression, many of the Big Bear supermarkets and those of its rivals were to open in recently closed factories and warehouses. They offered highly discounted foodstuffs, priced to suit people's limited disposable income, and they provided parking for their customers. A Big Bear store was a place of entertainment and to complete the carnival atmosphere many would feature a performing bear, dressed and trained to behave like a customer.

British shoppers would have to wait until the mid-1950s before supermarkets started taking off. It was only then that rationing was finally removed. Up until this time the country's construction priorities had excluded shop building or refitting. However, once the reins were off, the proliferation of supermarkets was astonishing. There were only about 600 self-service stores in 1950, but 10 years later there would be more than 5,800.

Similarly, in 1960, only a modest 367 supermarkets with floor space more than 2,000 square feet (185 square metres) and three or more checkouts were doing business. Within six years the number had leapt to 2,500.

Since then supermarkets have come to dominate our lives, reflecting the cash-rich, time-poor existences many of us lead. They are true barometers of the age. In the 1970s and 1980s they mirrored the general population's greater mobility and suburban desertion of built up areas, in favour of out-of-town and greenfield sites. Now, faced with a far more restrictive planning climate and large-scale urban renewal, they are leading the charge back into our towns and cities. The big nine names in the marketplace - ASDA, Marks amp; Spencer, Morrisons, Safeway, Sainsbury's, Somerfield, Tesco, The Co-op and Waitrose - have been buying up or opening chains of smaller stores and creating the kinds of "shopping offers" to suit our increasingly frazzled and fragmented existences.

Meanwhile, along the way, supermarkets have honed their operations, employing every art to secure market share. They helped pioneer the use of bar codes in the 1980s, rendering stock control a paperless operation and vastly cutting queuing times. In the 1990s they developed the loyalty card, both as a means of securing our custom and of measuring a precise picture of our individual purchases. And to make sense of the enormous amounts of data generated and cope with the logistical problems associated with keeping their shelves stacked while minimising wastage, they became one of the most sophisticated users of computer technology in the world. "We even have the capacity to anticipate the effect local weather conditions might have on sales," explains James McKechnie, Sainsbury's resources and recycling manager.

And securing market share is precisely the name of the game these days, with food sales more or less static and food costs constantly decreasing.

"We have been in a long period of food price deflation," says Dr Hugh Phillips, a researcher in the department of retailing at Bournemouth University. (such a trend is unlikely to change anytime soon as Morrisons, the recent buyers of Safeway, has promised further price reductions).

"The key to survival is improving the 'shop-ability' of your stores - attuning them ever more precisely to the specific demographic to be served in each location and encouraging people to purchase things from you, beyond their normal fresh food and grocery needs."

It is this imperative, Dr Phillips points out, that explains the increasing range of non-food items to be found in even the smallest supermarkets and on which the profit margins greatly outstrip those of food sales.

The new Sainsbury's store in Pimlico, London, is one among a new breed of "market" stores - "a concept" the company's format development manager Andrew Coterill derived from a year of qualitative research (interviews and focus groups) with customers. "They told us they wanted a very different kind of layout and experience; one that reflects a growing interest in food - driven by celebrity chefs and cooking programmes - but also a concern that many people don't feel confident about cooking or using unfamiliar ingredients. Cooking skills have also declined in recent years with the loss of practical home economics lessons in schools," he says.

Not only does this underline the care with which the customers' views have been absorbed into the Pimlico store's layout, it also provides fascinating insight into the design of all other supermarkets.

The following introductions illustrate its key departures from the norm: lJIn an initial plan design there is a clear view from the entrance to the back of the store. Far from forcing the shopper into a rigid route, the aim is to promote browsing.

lJThis same intention is reflected in the way the store has, as Andrew Coterill says: "pulled all the fresh food to front." Therefore cheeses, meats and fish are on lavish display in discrete stands where the customer can be attended to by sales people happy to chat about products, make recipe suggestions and offer tastings. This marks a return to the kind of personal service model that once prevailed in shops.

lJEven more exotic is the presence of an in-store chef who provides demonstrations using unusual items and offers cookery classes three evenings a week. Behind the chef's "station" a special kitchenware section has been created, selling the very items used in the demonstration. This bears out the increasing focus in modern supermarkets on driving the sales of non-food items.

lJBeyond the in-store chef lies the realm of produce. Fruit and vegetables are usually the first things supermarket shoppers encounter. They are placed first for the freshness and colourful impact they have over the sterile packaged goods and rows of tins. However, Pimlico's customers pointed out that they wanted to choose such things after their main meal items, and so they have been moved.

lJTo encourage the sense that the food should "speak for itself" the lighting has been deliberately focused on the displays, and the signs, far from proclaiming this to be a Sainsbury's store, are largely geared to explaining the foods and making suggestions for its preparation.

lJBeyond the fresh food sections are the traditional aisles. Here the talk is all of "gondolers" and "plinths", which are, respectively, the main blocks of shelving and the aisle-ends reserved for promotions or for selling unusual or more expensive items. Andrew Coterill confirms research that suggests our behavior has changed little since our ancestors embarked on big game hunting expeditions. The ideal shelf, it seems, is just below eye-level and the way we negotiate our way around the store is decided by our ability to use particular items or brands as our visual cues amid the mass of competing products. The Pimlico store boasts more than 25,000 different items on its shelves. According to Dr Hugh Phillips shoppers carry a sophisticated "cognitive map" of their favourite store and a shop that tampers with its layouts, does so at its peril. "There can be as much as a 15 per cent decline in sales for two weeks after major readjustments in store layout," he explains.

lJAnd so to checkout - the moment of truth when all the pleasant browsing can end in a misery of delays. It is this point in the shopping experience that probably exercised supermarket researchers more than any other. Today, the model is shifting towards self-administered checkouts, with customers in some stores carrying their own bar code checkers as they shop.

The supermarket experience is now so commonplace that we probably don't pause to think of the forces at work on us as we drift down the aisles or reach for an unanticipated item.

How Green is Your Supermarket?

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