In Memphis, Tennessee, 100 years ago (plus three days) the world forever changed.
Where are we going? To the first supermarket.
The Beginning of Self-Service
In 1900 or so, grocery shopping meant going to the general store. Entering, you gave the clerk your shopping list. Then, item by item, he gathered what you needed and figured out the prices. With cash rarely changing hands, you would have paid with your store account.
Clarence Saunders said there had to be a better way.
As a wholesaler who sold to general stores, Saunders saw all that was wrong. The clerks were either too busy or idle. The store accounts created a delayed cash flow and the stores were too small to have any purchasing power. Meanwhile, customers wasted time waiting for orders and lost money because of the mark-ups.
His solution was a well-lit self-service store with aisles stocking more than 1,000 items. The butter was in refrigerated cases, the flour was pre-bagged, and the national brands included Campbell’s soup. As for the prices, little hooks held the tags. Even the shopper’s basket was an innovation.
For the retailer though, the biggest difference was the check-out. Clerks with registers and adding machines accepted only cash.
Below is a 1918 Piggly Wiggly:
On September 6, 1916, Saunders opened his first Piggly-Wiggly on Jefferson Street in Memphis, Tennessee. With prices far less than the general store and sales much higher, we soon had “Piggly Wiggly Junior,” then “Piggly Wiggly the Third” and by 1932, 2700 Piggly Wiggly stores.
Our Bottom Line: Creative Destruction
Explaining “creative destruction,” economist Joseph Schumpeter (1883-1950) said that economic growth depends on the pain of old industries dying and new ones taking their place. With Piggly Wiggly and a new way to shop, the general store could not survive.
People have said that Saunders figured out something “as simple as looking out the window or scratching your ear.” But don’t the most elegant new ideas always look simple?
My sources and more: Commemorating “The Inventor of the Grocery Store,” yesterday, WSJ introduced me to Clarence Saunders. Captivated, I enjoyed a Mental Floss post on Piggly Wiggly with old ads and pictures and several pages from a Google book excerpt on Saunders. Please note that a sentence from Our Bottom Line was in a previous econlife post.