SELF-SERVIlSrG IN RETAILING FOOD PRODUCTS. 3 



that customers are required to make their own selections of mer- 

 chandise, taking the goods off the shelves or tables and carrying them 

 to a special place where payment is made for those selected. This 

 system applies not only to the distribution of foodstuffs, but is appli- 

 cable to almost any line of merchandise. It is being successfully 

 applied to the retail distribution of clothing, millinery, shoes, dry- 

 goods, and other lines, which at first thought would seem to be of 

 such a nature as to prohibit their sale under the self-service plan. 



There is a common belief among the retail grocers of the country 

 and the general public, especially in the East, that the term self- 

 service is used only in connection with a certain corporation operating 

 a number of self-service stores. This is no more true than that the 

 expression "chain-store method of distribution" means a certain 

 company operating a chain of stores. Neither is the idea correct 

 that permission must be secured from any corporation to operate a 

 self-service store. The corporation referred to does hold certain 

 patents covering floor plans and certain interior arrangement of their 

 stores, but principles of self-service can not be patented, being nearly 

 as old as distribution itself. Particular floor plans and arrangements 

 apparently are not vital to the operation of a self-service store. 



In the ordinary type of retail store merchandise can not be pur- 

 chased without paying for the cost of certain services. There is no 

 such thing as " free service," as commonly advertised by many re- 

 tailers. A direct charge for service may not be made, but its cost is 

 included necessarily in the selling price of the merchandise. The 

 average food store has only one price for each article sold. One per- 

 son may buy an article, pay cash, and carry it'home. The next pur- 

 chaser may ask to have a similar article delivered several miles away 

 and to have it charged, not paying for it for 30 to 60 days. Yet to 

 each of those customers the price is the same. This is obviously 

 unfair to the " cash and carry " customer. Furthermore, such a sys- 

 tem stimulates a demand for service and penalizes the consumer who 

 does not ask for it nor want it. In the average retail store the cost 

 of delivery amounts to about 2.4 per cent of total sales and the cost 

 of credit to about 1 per cent^ (one-half per cent loss from bad debts 

 and one-half per cent for keeping the account). If a charge were 

 made for the credit and delivery service rendered, based on the actual 

 cost of the service, the second customer would pay about 3^ per cent 

 more for his goods than the first. 



Self-service may be operated on the " credit and delivery " basis, 

 but in this bulletin it is assumed to be operated on the " cash and 

 carry " basis. In fact, it is operated on the " cash and carry " basis 

 in nearly every instance. In a few cases delivery service is furnished 



2 Figures compiled by the bureau of business research of the graduate school of busi- 

 ness administration of Harvard Uaiyergity. 



