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The Past And Future Of America’s Biggest Retailers

Filed by KOSU News in Business.
November 19, 2012

It’s an anniversary that most Americans can celebrate — the birthday of the Big Box. Discount shopping as we know it, began 50 years ago. In 1962 enterprising retailers invented Wal-Mart, Target and Kmart.

These stores changed the way we shop and the way we think about price. Historian Marc Levinson, author of The Great A&P and the Struggle for Small Business in America, talked to NPR’s Linda Wertheimer about what happened all those years ago, and how the stores will continue to evolve in the Internet age.

Interview Highlights

On why 1962 was the year of the big-box store

“In 1962, a number of different companies decided to try and create brand new store formats. The leader in that in 1962 is forgotten today. It was a company called Woolworths and it opened a store called Woolco. Woolco was expected to be the giant because Woolworth’s was gigantic. And everyone thought Woolco was going to conquer the world. Woolco, as your listeners will know, didn’t make it.”

On how the big-box stores popularized the idea of discounting after World War II

“There were laws meant to prohibit big retailers from getting volume discounts, so they couldn’t buy merchandise more cheaply than mom-and-pop stores and mark it down. The other thing was that the manufacturer could make a product, could tell the retailer, ‘You may sell our good, but only at the price we set.’ And so if a retailer wanted to sell a certain brand of camera or a certain phonograph record or whatever, it had to sell it at the set price. That started breaking down in the 1950s and that really opened the way to discount retailing.”

On how big-box stores cornered the suburban market

“One of the prerequisites for the big-box was the car. Everybody had to have a car because the big-box was sitting out in a parking lot somewhere. The big-box made shopping into a family experience. Mom and dad and the kids all piled into the car, they went out to this big store, and they could spend several hours there because there was by the standards of the day an enormous amount of merchandise. Now, you’ve got to give people a little sense of scale. We’re talking about stores that were gigantic for their time and that meant they might have about 50,000 square feet of space. If you go into a typical Wal-Mart Supercenter today, it’s perhaps four times that size. So big is relative, but for its day, 1962, these stores were quite large.”

On how the big-boxes evolved from traditional variety stores

“Stores had to figure out how to distinguish themselves. You couldn’t all have the same merchandise and be just like the other one. And we went through a period of experimentation … Some [companies] no longer with us. Some of them tried strategies and they just didn’t work out. It was not clear in 1962 that running a discount store like this was going to be a winning strategy.”

On whether Big Box stores will still be around in 50 years

“There are very few retailers that have that kind of lifespan. There aren’t too many that have been around for a hundred [years]. But even if they still exist they may be quite different. For example, you see now retailers trying very much to integrate their physical store with their Internet store. So maybe the physical store becomes mostly a showroom — you don’t actually go there to buy things and walk out with them. You go there to look at things and then you order them online and then they’re delivered to your house. Or maybe you order them online and you go to the store to pick them up, but the store may not be filled with quite so much merchandise. There are quite a few possibilities and I think it’s really foolhardy to guess what this is going to look like frankly in 10 years, much less 50.” [Copyright 2012 National Public Radio]

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