Competition in the Retail Grocery Trade 1850-1939

This article outlines the principal events in the development of competition in the retailing of groceries and provisions between 1850 and 1939. Special attention is given to price competition, both because it was a marked and pervasive feature of business behaviour during the major part of the period and also because price competition (or its absence) figures prominently in present-day discussions on the nature of competition in retail markets. The treatment in this article is non-statistical. It is not possible to express the extent or severity of price competition in quantitative terms; and statistics which might have been useful to illustrate parts of our historical account are not available.2 In the course of our discussion we refer to several of the attempts of organised grocers to regulate and reduce competition because they give some indication of the severity and character of competition at different times during the period covered. However, we do not present a history of organisations of retail grocers. It must suffice here to mention that during the second half of the nineteenth century numerous local associations of grocers were formed for a variety of reasons, and that the Federation of Grocers' Associations was founded in 1891. Among its many functions the Federation was from the beginning concerned with measures for the control of competition, though neither its activities nor those of the local associations had any appreciable effect on the course or intensity of competition.3 1 We acknowledge, with thanks, research assistance provided by the Economics Research Division of the London School of Economics. 2 For example, there are no time series of gross margins on particular lines or in the grocery trade (however defined) generally. J. B. Jeffery's recent study, Retail Trading in Britain 1850-1950, 1954, provides estimates of the shares of the trade handled by the main types of retail undertakings since 1850. Such statistics, though interesting in themselves, are of limited significance for our study of competition. The market influence of successful new types of firm was far greater than that suggested by the share of the trade handled by them. Moreover, the usual classification of retail undertakings for statistical pu-poses necessarily fails to take account of several characteristics which are imporiant for the study of market behaviour (e.g., age of firm, price policy and range of merchandise handled). In particular the category which usually includes all retailers other than co-operative societies, department stores or multiples contains a heterogeneous collection of firms which did not have uniform pricing policies, methods of operation or attitudes towards competition. 8 The associations and the Federation in the main represented the self-styled trade which, however, is not easy to' define. Roughly, it referred to retailers who practised the more traditional or established methods of business, and who felt most keenly the impact of the emergence of new types of competitor or of novel methods. Since what was customary or established changed with the years, the nature of legitimate tra'de also changed

Business · Commerce · Competition (biology) · Grocery store · Retail trade · Ecology · Historical Economic and Social Studies · Marketing

• Institutional Change in Retailing

  Open Access•Brown, Stephen Brown•Progress in Human Geography•1987

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