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The need for large-scale marketing operations reflects fundamental changes 

 that have talcen place in food marketing. The day of the old-time corner 

 grocery is about over, and in its place we see the large modern supermar- 

 ket geared to mass distribution and selfservice of food to a rapidly ex- 

 panding population. For instance, in 1939 there were 561,000 food stores 

 in the country, but by 1954 this number had declined to 385,000. Con- 

 versely, the average annual volume per store has risen greatly. Half of 

 the new stores built today have an annual gross of $2 % million. Along 

 with this decrease in the number of stores and the increase in their volume 

 has come an increasing concentration of large stores--both chains and 

 independents. In 1956, supermarkets--those doing over $375,000 a year-- 

 accounted for 9 percent of the stores in the country, but had over 62 

 percent of total sales. Only 7 years ago, in 1952, supermarkets had only 



43 percent of total sales, and in 1950, their share of total sales V7as 

 about 25 percent. 



The just-released Federal Trade Commission's "Economic Inquiry into 

 Food Marketing'' has some other figures showing the relatively faster growth 

 of large scale retail firms. From 1948 to 1953, total food store sales 

 increased from $29 billion to $50 billion, or 72 percent. The sales of 

 individual stores and chains with less than 11 stores increased 53 percent. 

 However, sales of chains with 11 or more stores increased during this 10- 

 year period by 118 percent. Stated another way, chains with 11 or more 

 stores accounted for 29 percent of total food store sales in 1948, but 

 in 1958 they were doing 37 percent of total sales. 



Besides chain stores having 37 percent of the nation's food sales, another 



44 percent of total sales are done by retailers that are affiliated with 

 voluntary or cooperative v;holesale buying groups. This means that over 80 

 percent of all sales in grocery stores are today handled by retailers that 

 obtain their supplies jointly through corporate or voluntary chains. 



Along with this decrease in number and increase in size of retail stores, 

 has come an integration of marketing functions. The wholesaling function 

 has largely been integrated with retail ing--either by retailers purchasing 

 wholesale facilities, forming cooperative wholesaling groups, or malcing 

 contracts with private wholesaling firms. -.;,: S; i ; ,. ; f ,> ; -,,' 



In order to meet the needs of mass distribution, retailers need an assured 

 supply of products, and these products must meet certain specifications 

 as to quality and appearance. This has influenced their procurement 

 policies, that is, their way of buying supplies, including apples. 



As Professor George Mehren stated in a paper submitted before a Congress- 

 ional Sub-Committee on Agricultural Policy, "There have been 2 major 

 changes in the past 15 years in procurement procedures by retailers. 

 First, retailers have become large enough in some local or regional markets 

 to develop their own merchandising policies and thus require suppliers 

 of some food products to sell to the retailers on a straight price-speci- 

 fication basis. Secondly, retailers have become large enough to require 

 many suppliers to adjust the terms of delivery and of services to the physi- 

 cal requirements of the new types of retailing." 



