Supermarket USA by Shane Hamilton

Author:Shane Hamilton
Language: eng
Format: epub
ISBN: 9780300232691
Publisher: Yale University Press

Figure 12 A 1958 USDA publication visually presents the contract production of poultry as a chain, with the farmer beholden to an all-seeing suited figure at a desk. (U.S. Department of Agriculture, Contract Farming and Vertical Integration in Agriculture, Agriculture Information Bulletin no. 198 [Washington, D.C.: USDA, 1958].)

Where and for whom did Corporate Man work? Most likely in a procurement office for a national supermarket chain such as A&P. His ability to call up 250 truckloads of dressed chickens at any given moment and at a place of his choosing would have been the source of Corporate Man’s power. But supermarket chain-store buyers procured much more than chicken, and as their systems of mass purchasing grew in scale and scope in the 1950s the systematic impacts on the farm and food marketplace became ever more apparent. Among those most concerned were the owners of independent retail grocery stores and small regional chains. Many of these retailers belonged to the National Association of Retail Grocers, which in 1959 published a pamphlet declaring that a “cold war” was “going on in the consumer market” as national supermarket chains swallowed up their competitors. “Those who win this contest at the retail level,” warned the retailers in an effort to paint the issue as a matter of national economic security, “will have enormous advantages in extending their power backward over food manufacturing, processing and farm production as well.” Whether or not the scramble to create mass buying power through mergers and acquisitions qualified as a cold war, the pace of consolidation was indeed hectic through the 1950s. As one business analyst put it in 1961, all food chains shared a “dilemma—acquire or expire.” Between 1949 and 1958, 83 supermarket companies acquired 315 other companies. Medium-size chains (as measured by sales volumes) were the most acquisitive, seeking not only to remove the competition of smaller firms from the market but also to build a retail network of sufficient size to warrant a large-scale wholesale buying operation that could compete with the largest national supermarket chains in the procurement realm. Such chains could exercise significant market power as both buyers and sellers at a regional level, even if their share of grocery store sales was minuscule at the national level.17

Cooperative buying groups and voluntary associations had enabled regional chains to exercise the same sort of concentrated buying power as the largest national supermarket chains by the end of the 1950s. The largest included Topco Associates (created in 1948), Cooperative Food Distributors of America (1936), and the Independent Grocers Alliance (IGA; 1926). By joining such a group, medium-size supermarket chains could gain the benefits of large-scale purchasing power without having to acquire retail competitors. Donald P. Lloyd of Cooperative Food Distributors of America explained to a congressional committee in 1959 that his group represented twenty-seven thousand retailers, providing them with ninety-six wholesale warehouses for procuring foodstuffs. Unlike a traditional wholesaler, however, the Cooperative ran its operations not for profit but “to get the benefit of mass purchasing power for our individual retailer members.

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