The Hindu Business Line : Out in the supermarket jungle

Tesco, the world's fifth-largest retailer, has "earmarked at least £250 million for its much anticipated US entry in the autumn" and "is rapidly expanding into non-food" in the UK, reported www.ireland.com last week. "Tesco, like world leader Wal-Mart and Carrefour, the number two supermarket owner, is targeting emerging markets China, India and Russia."

The air is rife with rumours on whom Tesco will tie up with in India. Meanwhile, a Delhi-datelined posting on www.newswiretoday.com is about the UK's Association of Convenience Stores (ACS) saying that supermarkets are pressurising small players to close and reduce choices for customers. "The allegation comes after the Competition Commission produced its initial report on the effect of supermarkets on competition and stated it is concerned over the influence of supermarket at ground levels." In Chennai, one hears of protest meetings organised against Reliance's retail operations. And in the speaker list of a conference of `Retailers' Association of India', Wal-Mart is obviously absent.

Just the right time to read Judi Bevan's `Trolley Wars,' from Viva (www.vivagroupindia.com) , which is about how `the big beasts of retail' were born, and how they battle it out in `the supermarket jungle.' Like rock'n'roll, hamburgers and jeans, supermarkets began in America, begins Bevan. "Clarence Saunders, a flamboyant inventor, came up with the idea that shoppers should serve themselves and he opened the world's first self-service store in 1916. It was an idea that would revolutionise the entire grocery industry."

Saunders called his group Piggly Wiggly; "he believed the name would intrigue people." The first outlet, opened on September 6, 1916, in Memphis, drew mixed reviews. "Unlike any other grocery store," said one; "shopping baskets, open shelves, no clerks to shop for the customer - unheard of," gasped another!

Narrates Bevan: "Customers, however, soon grew to like self-service shopping, enabling Saunders to issue franchises to hundreds of grocery retailers for the operation of look-alike stores. Within a few years Piggly Wiggly was so successful that Saunders was able to float the company on the New York Stock Exchange... Trolleys were invented in 1937."

The UK, though, had to wait till after two world wars to adopt `the self-service revolution'. Just after the Second World War, Alan Sainsbury and Jack Cohen, Tesco's founder, visited the US, "as part of a government-sponsored initiative to educate British businessmen about the latest trends on the other side of the Atlantic." Returning, they put to practice their US lessons. For instance, Cohen turned his shop counters `back-to-the-front' and piled them with produce.

"When supermarkets first arrived in post-war Britain, they were a novelty - part shopping, part entertainment," chronicles Bevan. "Throughout the 1950s and 1960s the opening of a big supermarket was an excuse for a party - and party they did. Film stars and comedians were shipped in to cut the ceremonial opening ribbons to the sound of brass bands and the bursting of balloons." Tesco is said to have used chimpanzees to make `regular appearances'!

According to Bevan, `the most powerful force' that drives the retail market `onwards and upwards' is convenience. Another major factor behind the competition among supermarkets in the UK is `the abolition of resale price maintenance in 1964,' observes the author. "Until then, manufacturers had controlled the price of their goods by setting a `resale price', so a jar of Nescafe would cost the same in the corner shop as in the supermarket," explains Bevan. "Resale price maintenance was great for the manufacturer, which could dictate the prices retailers charged for their goods, but not so great for consumers or aggressive retailers."

A book to toss into your trolley!

http://BookPeek.blogspot.com

D. Murali