Meditations and Learnings

Meditations and Learnings

Societal Changes and the Swings in Retail Preferences

The population movement from rural to urban America highlighted how the companies with the competitive advantages of those better suited for the new environment overwhelm the industry giants failing to adapt. As people urbanised in the early twentieth century, the mail-order companies were no longer best suited to serving customers better positioned to frequent a local department store. Montgomery Ward and Sears were mail-ordering titans, but when J.C. Penny stores started popping up across urban communities, they beat out by the upstart.

Following World War II, there was suburbanisation of America which made larger stores more attractive. The automobile allowed citizens to travel to a supermarket, buy more goods, and bring them back. A&P grocery stores were booming until the 1970s when there was a consensus-building that people preferred large and less frequent supermarket hauls to smaller and less frequent local grocery excursions. Safeway was quicker to adapt while A&P realised their redundancy too late. What had allowed them to operate more cheaply and therefore charge less had become an impediment. The economies of scale in larger supermarkets won the day, allowing for even lower prices on groceries.