The epic biography of retail legend John G. Schwegmann
Blog #6: An Eccentric Panoramic Survey of U.S. Retail History
April 17, 2017
From its own peculiar vantage point, The People’s Grocer presents a panoramic survey of U.S. retail history spanning nearly 150 years—from the pre-industrial 1850s to the post-industrial 1990s. Since the Schwegmann family grocery dynasty just so happens to rise, climax, and fall over this long-term time frame, its chronicle serves as the perfect foil to highlight key developments that helped shape the modern retail world. These developments are sketched out below in a progressive sequence of decades.
Key Developments in U.S. Retail History: 1850s to 1990s
The definitive transition begins across big cities and small towns from outdoor markets and street peddlers to indoor “brick-and-mortar” stores.
The aftermath of the Civil War witnessed the rise of corporations and the birth of brands—their all-powerful offspring. Together, corporations and brands formed the foundation for a new historical phenomenon called the “mass market.”
As the key portals assigned under this dynamic new system to funnel the coming abundance, retailers struggled to keep up with the consumer-paradise paradigm shift—most often taking refuge in static business models. Department stores and a few rare chains took the lead in innovation during this time.
These three decades represented the glory days for both Main Street USA (independent, mostly family-owned retailers) and old-time corner grocery stores. Yet the gradual emergence of corporate-owned chain stores slowly cast a threatening shadow over this classic American scene. By the end of the period, fierce resistance began to coalesce among the independents against these destroyers of small-town and urban-neighborhood livelihoods and values.
The extreme turmoil of the Great Depression produced extremely contradictory developments. Consider that the supermarket originally emerged in 1930, the first full year of the Depression. This entirely novel, rational, and overwhelmingly successful alternative to the old grocery store business model had fully embraced mass-market and discount principles. Yet at the same time, also sweeping the nation in the early 1930s were so-called “fair trade” laws, which attacked discounting as a sinful abomination. This confusion over valuation can also be seen in the political sphere, where a widespread “soak-the-rich” populism yielded to aristocratic leadership under FDR.
Enjoying their last hurrah during WWII, old-time corner grocery stores were almost entirely eclipsed after the war under the competitive onslaught of supermarkets. By the 1950s it was clear that corporate chain stores, under heavy attack by populist forces for a quarter century previously, had weathered the storm and emerged victorious. Meanwhile, under Cold War pressures, both consumer sentiment and legal opinion began turning against the legitimacy of dictatorial fair trade laws.
With the withering away of manufacturer-mandated price fixing over the 1950s, the age of legitimate discounting had finally arrived. Right on cue, Kmart, Wal-Mart, and Target first appeared in 1962. For their part, supermarkets began taking advantage of the new pricing freedom by fearlessly expanding on all levels—in store size, format type, and geographical scope.
During these final twentieth-century decades, distended types of discount outlets—including supercenters, hypermarkets, warehouse clubs, “category killers.” and other big-box concepts—emerged to satisfy consumer society’s demand for one-stop-shopping convenience at the lowest possible price points. Shopping options just got better and better. But there was a fly in the ointment.
For over these same decades, the very basis for mass-market prosperity was being undermined. The great consumer society was premised on income growth. But by the 1980s, with wages stagnating and even beginning to decline, debt growth replaced income growth.
On the retail level, the new debt-driven consumer society was reflected in the almost utter destruction of the independent store sector by entities set up specifically to capitalize on debt dynamics—namely, leveraged buyout firms. The miniature Schwegmann supermarket empire fell victim to the LBO vultures in the late 1990s. And that is more or less where the story ends.