The Evolution of the Supermarket From Dry Goods Stores to Amazon Go
The next time you stop off at your local supermarket to grab a couple of things, you might want to consider how the modern supermarket got its start.
Up until the mid-20th-century, when you went shopping for groceries, you went to a greengrocer for fruits and vegetables, a butcher for meat, a fishmonger for fish, and a dry goods store for soap and cleaning supplies. At each store, a clerk would have to fetch the items a customer wanted. Milk, cream, butter, and cheese were delivered by a milkman.
The modern supermarket begins
In 1915, the scion of the immensely wealthy Astor family, Vincent Astor, sank $750,000 of his own money into the creation of the 165 by 125 foot (50 x 38 m) open-air Astor Market. Located at 95th Street and Broadway in Manhattan, Astor Market sold produce, meats, and flowers, however, it wasn't well attended and it closed in 1917.
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While Vincent Astor might not have been successful in the North, at the same time in the South, Clarence Saunders was creating the first self-service grocery store which launched in 1916 in Memphis, Tennessee.
This first Piggly Wiggly store originated many of the features we take for granted in a modern supermarket including self-service, aisles, checkout stands, prices on individual items, and shopping carts.
The store was set up so that shoppers followed a continuous path which brought them in front of all the products the store sold. Saunders received patents for the "Self-Serving Store," the store's design, individual price tags on items, and the printed cash receipt. By 1923, there were 1,267 Piggly Wiggly stores across the U.S.
Soon, the Great Atlantic and Pacific Tea Company began launching its eponymous A&P stores in both the U.S. and Canada. To settle competing claims as to who developed the first supermarket, the Food Marketing Institute along with the Smithsonian Institution researched the issue.
They determined that the five characteristics of a supermarket were: separate departments, self-service, discount pricing, chain marketing, and volume dealing. They also determined that the first true supermarket in the U.S. was created by a former Kroger employee named Michael J. Cullen. Cullen launched the first King Kullen store on August 4, 1930, inside a former garage located in Jamaica, Queens, New York.
Kullen's innovations included separate food departments, a parking lot, and the selling of large volumes of food at discount prices. King Kullen's stores' slogan was "Pile it high. Sell it low." By 1936, there were 17 King Kullen supermarkets earning over $6 million annually.
During the 1930s and 1940s, supermarkets began muscling out "mom and pop" grocery stores across the country because they could offer food at lower prices due to their much larger buying power. Then, in 1945, the end of World War II ignited America's love affair with the car.
The automobile brought vast suburban housing development, and supermarkets began cropping up in newly-built strip malls. Chains such as Kroger began offering regional branding to appeal to local shoppers, and these local stores included Ralphs, City Market, King Soopers, Fry's, Smith's, and QFC.
In Canada, the Loblaw chain included Fortinos, Zehrs, No Frills, and the Real Canadian Superstore. The UK was slower to embrace supermarkets with its first supermarket, the American affiliated Premier Supermarkets, opening in 1951.
During the 1930s, British businessman Jack Cohen began creating Tesco grocery stores, and by 1939, there were 100 of them. Cohen partnered with developers who were building shopping centers, and a Tesco store was often the first tenant. Today, Tesco is one of the UK's "big four" supermarkets which include, Asda (owned by Walmart), Sainsbury's, and Morrisons.
The technology of supermarkets
The first cash register was created in 1883 by James Ritty, a saloon owner in Dayton, Ohio. Ritty was inspired by a machine he had seen on a ship that counted the number of times a ship's propeller completed a full revolution.
The new cash register had compartments for various denominations of currency, an adder that summed purchases, and when the till was opened, it made that familiar bell sound. In 1884, Ritty's patent was bought and his cash registers were sold under the name National Cash Register Company, which is the behemoth technology company we know as NCR today.
The first coupon was created by the Coca-Cola Company in 1887, however, coupons didn't catch on until the 1950s. That's when electrical engineer and Chicago businessman Arthur C. Nielsen created the Nielsen Coupon Clearing House to administer the redemption of coupons. Nielsen went on to form the A.C. Nielsen company which is famous today for its market research and television ratings.
By 1972, coupons were appearing in newspaper sections, and in 2010, the Target Corporation pioneered the scannable smartphone coupon.
The first shopping cart was created in 1937 by Humpty Dumpty Supermarkets owner Sylvan Goldman to replace handheld wire and wooden baskets. Goldman had noticed that as soon as customers' handheld baskets became heavy, they would head straight to the cash registers. By eliminating the need to carry their purchases, customers could now buy more.
In 1946, engineer and inventor Orla Watson created the rear folding wall for shopping carts which allowed them to nest together, thus saving space. On August 16, 1949, Watson was awarded Patent #2,479,530 for the "Telescope Cart".
The 1940s also saw the emergence of the first credit cards, which were then known as "charge cards". Supermarket owners quickly noticed that customers tended to spend more when they used charge cards instead of cash.
In the late 1940s, servicemen returning from abroad fueled the rise of so-called "international foods" in supermarkets. Today, it's hard to imagine that these "international foods" included spaghetti, pasta sauce, and canned La Choy chow mein.
In 1967, Joe Coulombe was the manager of a small chain of convenience stores in Los Angeles when he got the idea to create a grocery store that sold unique products. Thus was created Trader Joe's, with the first store opening that year in Pasadena, California. Today, this much-loved chain operates over 500 stores across the U.S. and is famous for its "Two Buck Chuck" wine which sells for just $2.00.
In the summer of 1974, the first Spectra-Physics model A barcode scanner was installed in a supermarket in Troy, Ohio. The scanners could read the new Universal Product Code (UPC), and the first item scanned was a pack of Wrigley’s chewing gum.
Besides making the checkout process exponentially faster, the scanners and UPC codes revolutionized the tracking of inventory. The first point-of-sale system (POS) was introduced by IBM in August 1973 with its IBM 3650 and 3660 store systems. The system was comprised of a mainframe computer that controlled up to 128 point-of-sale registers. This was the first commercial use of client-server technology, peer-to-peer communications, local area network (LAN) simultaneous backup, and remote initialization. The system was installed in Pathmark grocery stores and Dillard's department stores.
In 1986, the first touchscreen POS system and its software was demonstrated at that year's Comdex computer show in Las Vegas. The ViewTouch was based on the Atari 520ST color computer, and it allowed the configuration of menu items without needing low-level programming.
Buying in bulk
In 1976, the first Costco warehouse store opened in San Diego California in what had been an airplane hangar. Originally intended for small businesses to buy products in bulk at wholesale prices, the store soon moved to the paid membership model used today. Sam's Club, which is owned by Walmart, followed in 1983.
The 1980s brought the first supercenter stores, which included banks, pharmacies, beauty shops, and fast food stores along with groceries, all within the same store.
During the 1990s, a wave of supermarket mergers in the U.S. began, and by 2009, four chains were selling over 50% of all groceries. They were: Walmart, Kroger, Costco, and SuperValu. Also, during the 1990s, supermarkets began issuing loyalty cards which could be read by barcode scanners.
In 2007, Amazon launched its online grocery delivery service Amazon Fresh. Today, Amazon Fresh delivers in over 19 U.S. metropolitan areas and Berlin, Hamburg, London, Munich, Tokyo, and several Indian cities.
In 2018, Amazon launched its first cashier-less Amazon Go store in Seattle, Washington. Customers use their smartphone to enter the store, then their purchases are tracked and they are charged through the Amazon app.
COVID-19 has caused rapid changes to the way many of us shop at the supermarket. The use of home delivery and curbside pickup has skyrocketed; however, only time will tell how the supermarket will next evolve.