PRODUCE & MARKET REPORTS FROM DAY TO DAY

Evening Post, Volume CXIX, Issue 88, 13 April 1935, Page 12

PRODUCE & MARKET REPORTS FROM DAY TO DAY

THE CHAIN 'STORE

AMERICAN INQUIRY

INDEPENDENT TRADERS

'■.Evening Post," April' 13. I Considerable t.;s>;ition has been displayed in Sydney by a section of retail traders .to . the ..operation of . the chain store/ The aid of the State Government has even been invoked, but the problem is a. difficult one even for New boutli Wales to solve in the way many retail traders -would like. v The subject has been dealt with on American c::por:enee in an article'in the "Sydney Morning Herald. It.is there,shown by'ths writer that the chain stores in the United States form a particular phase of retailing—that of standard articles and medium and- lowpriced goods—confining themselves to goods ■which are not bulky enough to require delivery.' They also prefer commodities which are purchased many times during the year and few fields have not been expoited; but they' mainly flourish in such Jiiies as grocery and foodstuffs, shoes, certain kinds of clothing, and. as chemist shops, together with restaurants and ethers termed ''variety" stores. . In their conHiit v.-jth .the independent trader th? question whether the chain .store will ultimately drive the independent1 merchant from business is a matter 01, opinion and, unlike an argument on fact, rarely finds a definite settlement. Howover,' the American trend seems to have , shown chain's with standardised ' methods to have forged ahead; but in the case of tho. smaller traders, where efficiency has boon;linked with individuality and style (factors dependent on personal contact, or adaptation to sonic individual community, and hence that ,the standardised chain cannot possess)'thb latter have not only held • thpi'r own, but at times outpaced the chain. GROUP BUYING. The position in America lias been summed up by W; J. Baxter, of the Chain .Store Research Bureau, as follows:—"At the present time chains which have worked out uniform scientific methods of merchandising are: prospering, while chains ■which have not solved these problems, like merchants Ai'ho do not know.'just where they are at,' arc not making such a good ' showing. ' Group buying, buying association's.' resident buyers' chains, ■ jobbers' <-haing, and other collective buying ■organiasliemv, are' being developed. • that incorporate many of the cleineuts of chain nraanisiition without centralised 'owner>hip.' Individual .store.* that give unusually good service, or buy with exceptional skill, are still able to make a better show-j ing than the average chain store, but the genera]' merchandising level of tlie chain. units is above that of the average independent. The extent to which chains will absorb or crowd out the independent stores depends on the extent to which the independents are able to work out a technique that will enable them to buy as effectively, and conduct, their, business as skilfully as chains are conducted." This, seems to boar out that the problem is not >o much one of the independent and'the chain, but rather that of the .unskilled v. theskilled merchants,' and to suggest that where the formation of buy-i ing associations for pool or bulk buying nmoiig- the individuals is possible the chain's biggest advantage is nullified. AN OFFICIAL REPORT. .Recently illuminating disclosures have lieen liiade by an investigation instituted by; United States Senate resolution, -which ■instructed the Federal Trade Commission to' "inquire .into. J(nd report the advant-.j :\Ues or disadvantages of,chain store distribution in ■'comparison with other types of distribution."' 'Though this is not fully published, several functions have been disclosed. A table thows: —

Each store; possessed-from two to three it> srthousand, or more chain units.

The r.enort also shows the chain benefits Kreatly by. its ability to. purchase larger volumas, and in eliminating intermediaries, such as a?ents, brokers, and commission merchants:.but direct buying from manufacturers does not increase rapidly until the/chain grows, to fifty or more units. Al=9; a definite menace exists to .the wholefalcr.^ for of the IG-jj chains reporting to Ihe Comniission 200 were actively engaged in the.whplesalipg business. The independent trader was not seriously worried by the first chain stores, but the subsequent entry of rival chains into fhe retail field was, more than bearable. A price-cutting war among tlje chains and flic independent found them "selling some lines at. less than his wholesale cost. A revenue producing tax was suggested, that would Ultimately.remove the chain store altogether. .No effort was .spared in the campaign, and newsnaper ■advertisements, circulars, and radio broadcasting have lipon us?d to spread anti-chain propaganda in >\merii\i.-

The N.R'.A. has modified' certain aetivil"?« ot the chains, notably the declarin" of "■losi lenders'I —articles sold below cost it. the purpose' of 'attiVtine.trh.de—unfair business practice, and thcrcfore:illcgal. ■

. ' ' otorca Operating VjOO showed 22(i 1910 showed .'.:... 1.127 1920 Showed ...... 13,508 ■ ,-- 192i3 showed 35,271 tXS shnwed ...... 66.246 1930 showed 63,161