Chain stores: The "A&P" effect on homesteading.

In the 1920s farmers had many familiar and recurring problems such as weather and low prices. But there was another one that is seldom heard about today: chain stores. Called "the greatest marketing development of the last 50 years," grocery chains had some curious ripple effects on farming--and even more on homesteading.

By 1929 there were about 800 chain groceries operating 60,000 stores. A&P alone had 17,000 of those, having doubled the number in just five years.

James Boyle, a professor of rural economy at Cornell University, said of the chains in 1929, "Their strong financial position makes them dangerous competitors for the independent retailer, for the jobbers, and wholesalers." This, he added, had implications for farmers.

They included what Boyle called "bait" (loss leaders); pushing for lower prices (for both farmers and consumers); standardization; and increasing consumption.

Using farm produce for "bait"

There was a good potato crop in 1928, in both quantity and quality. "Regular potato buyers were nervous over the future trend of the market," Boyle wrote the next spring, "and they were on the verge of becoming panicky. Therefore when the chain stores used the potato as a leader or as bait, it was the last straw. The market was demoralized."

Many chain stores put on a special "potato week" in the fall of 1928. They took advantage of the low prices, and then did something unheard of: they lowered the price to consumers even more, actually selling at a loss! The idea, of course, was to get customers into their stores with cheap potatoes, hoping they would buy other products that would provide profits.

The traditional mom-and-pop groceries couldn't compete and stopped buying potatoes. Wholesalers followed. The price to farmers fell as low as 10 [cts.] a bushel, and many growers left entire fields to rot.

"The big crop meant a low price, it may be admitted; but chain store policy still further depressed this low price," Boyle said. "The farmer was the shock absorber. He bore the brunt of it, for he could not shift either the risk or the loss to other shoulders."

This spread to other farm products--not only "sell it or smell it" fresh produce, but also canned goods. "Every year some canner of peas, corn, tomatoes, peaches and so on cans too big a pack. He rushes to the chain stores with his surplus. They recognize this surplus as `distress' merchandise and drive a hard bargain, often buying below the cost of production. This stuff then becomes a leader. The effect, if the chain be a large one, is to depress prices of the product over the whole United States, for the market is very sensitive. Here again the farmer is the shock absorber in the mend, for canners can protect themselves best by paying farmers less.

"This kind of merchandising, offering bait to lure the customers in, is not dignified merchandising. It is hardly worthy of an honorable merchant." Boyle noted that "our merchant princes, our Filenes, our Wannamakers, our Marshall Fields, our Jevnes--have not resorted to such dodges. May the chain stores see the error of their ways! Genuine clearance sales have nothing in common with the `bait' system now used by some chains."

Working for the consumer

The owners of the chains were following the lead of the industrial magnates. It had become obvious that great wealth was possible for anyone who could increase efficiencies through volume. The chains reduced overhead by selling far more--per store and per worker--than the traditional neighborhood family-run store. More customers meant more rapid turnover, and increased profits. They could offer a much wider variety, and often fresher goods. Their buying power also meant bargaining power, and their resources allowed selling some items below cost.

All of this was, of course, "good" for the consumer. Who Could complain about a wider variety of fresher products at a lower price?

Except, of course, the farmers, jobbers, wholesalers, smaller processors and grocers who were forced out of business.

But this became complicated, because in the new culture, where self-sufficiency was out, sufficiency was no longer enough, and specialization was becoming common, those who were forced out of business were also consumers. They undoubtedly appreciated the low prices of the goods they didn't produce. The only way out of the dilemma was compromise.

Specialization

The traditional grocery store was owned and operated by a family, and served only the immediate neighborhood. (The old "general stores" had already been displaced by more specialized retailers of clothing and dry goods, hardware, and similar products.)

Members of the family did the purchasing, stocked the shelves, ground the coffee, took items off the shelves as customers placed their orders, neatly wrapped some bulk products in plain brown paper and securely tied them with string, and often as not, extended credit and made deliveries with a horse and wagon before sweeping the floor and turning off the lights.

The chains were well-capitalized, building stores (and overnight business) that could displace dozens of neighborhood shops that had been built up slowly by their owners, sometimes over generations. Customers picked their own goods, took them to a checkout counter in a shopping cart, and carried them home in paper sacks instead of their own market baskets or wrapping paper. Some workers did nothing but stock shelves, while others only worked the cash registers. And one buyer could purchase for the entire chain, not pounds, but tons and tons.

No longer did the grocer cut a piece of cheese to the customer's specifications from a massive hunk, or hand-dip ice cream from tubs into smaller containers. Crackers were no longer sold out of a tin, or pickles out of a barrel. For the chains, prepackaging was essential.

There was another side to specialization. Before, grocers sold groceries. The housewife also had to visit the butcher for her meat, the baker for her sliced bread, and the druggist and the variety store for their specialties. The large chain stores started to replace all of these, adding convenience to their other attractions. Although the local specialists started to go out of business, they were replaced by even greater specialization as baking and butchering became big businesses, operating on Henry Ford's production line principles.

The home delivery milkman was one of the last occupations to be replaced by the chains, which by then had become "supermarkets."

Standardization

Packaging led to grading and standardization. Uniformity was more important to national chain buyers than it was to local grocers, who often bought or bartered products locally produced by people who were also their customers.

But the largest impetus for standardization was probably simplification.

Members of one California co-op grew 40 kinds of apples. The chains only wanted one. It was worse in New York. Growers produced 200 apple varieties, only 10 of which sold to the chains. Producers could no longer appeal to dozens or hundreds of tastes and preferences. Now the only customer who counted was the chain store's buyer.

Rural economist Boyle saw this as a good thing, since it worked to help industrial agriculture's new assembly line attitudes and techniques.

Increased consumption

Chains also increased consumption of some products, with obvious benefits to farmers who produced those products. Lower prices, along with standardization and consistent quality, resulted in people eating more fruits and vegetables, and probably, Boyle thought, more meat and dairy products as well. Self-sufficient reliance on homegrown products was replaced by a growing dependence on foods of greater variety, many grown in different regions and climates. And the passing of sufficiency meant fewer diets of bread, or beans, or meat and potatoes, and an increase in both the variety and amount of what people ate.

A change in the farmer attitude

Until the rise of the chains, Boyle said, farmers "looked on themselves as principals, and on consumers as a mere silent, passive mass. But the chain buys for a quick turnover, and keeps in the closest possible touch with consumers. The chain will thus force the farmer to adjust his production more and more to consumer demand. The chain store will furnish the best barometer yet devised for gauging consumer demand. It will be speedy and accurate. The farmers will then make those shifts and adjustments in production, both in quantity and in quality, which the consumers vote for by their purchases."

The implications for homesteaders

The shift from self-sufficiency to sufficiency to consumerism involved a web of multiple causes and enablements, many working in concert like the gears of the new machines themselves. Smokestack industries, improved transportation, mechanized agriculture and chain stores were all meshed together, each being dependent on the others while at the same time feeding the spread and growth of all of them.

These in turn were tied to industrial food processing and preparation, the newfangled radio and the development of advertising to increase wants (as opposed to needs), and much more.

Under these conditions, self-sufficient small farms and homesteads lost their appeal. They lost not only their reason for existing, but often their ability to exist. The small farmer had to become a large farmer to survive, and the homesteader had to find an outside source of income. The result was the modern homesteader.

Deja vu all over again?

Some homesteaders (and others) think the pendulum has swung too far. The markets indicate that they might be right. Some of the ways much of America is returning to those pre-1930s customs and practices are almost startling to those who didn't even realize there was a pendulum to swing back.

Perhaps it started with "organic" foods becoming popular ... to the point where they are now available at farmers' markets, CSAs (community supported agriculture), so-called "health food" stores, as well as at small chains specializing in such foods. Even "conventional" supermarkets often offer organic foods, produced by small farmers with decidedly non-industrial methods. But there are many other examples.

Heirloom seeds, in all their wondrous "non-standard" (and pre-industrial open-pollinated) variety, have become popular. Specialty cheeses are made by small factories and even on small farms. Food processing is returning to the home kitchen via bread and pasta machines. Home gardening is common, as are a variety of "old-time" crafts and skills. The small backyard flock of poultry, dairy goats, wood heat and alternative energy and even home schooling all point to the desire of many people to distance themselves, to some degree, from the assembly line and chain store mentality that arose in the 1920s.

The reasons have not been studied or analyzed, although the desire for fresher, more flavorful, more wholesome foods, grown on naturally healthy soil and without chemical additives or genetic manipulation, is often cited. A desire for greater personal control, security, variety, and a sense of participation and satisfaction are also factors. Even a desire for simplicity motivates some.

We have been looking at all of these, and others, in the context of how agribusiness and mass marketing came about in the first place. Drawing on that, would it be possible to glimpse the future?

The goals of greater abundance coupled with lower prices and decreased labor (to produce necessities)have been reached, and exceeded. But we might ask ourselves if these goals overshadowed, and perhaps replaced, others that might have been just as important, or more: personal satisfaction, sustainability, community, and many others that don't show up on the balance sheets of the capitalist industrial system.

Are the new parameters nothing but a passing fad, or the tip of an iceberg? If not a fad, and they spread, will the old system somehow adapt to them? Or will a new culture evolve, perhaps developing a new system?

The answers might well define the future of homesteading ... and even civilization.