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Americanisation in 20th Century Europe: business, culture, politics. Volume 2

 | 
Nick Tiratsoo
, 
Mathias Kipping

The Americanisation of food retailing in Britain and France since the 1960s

Isabelle Lescent-Giles

Résumé

Ce chapitre examine l’impact du modèle américain sur la grande distribution alimentaire française et britannique depuis les années 1960. La consommation de masse, les nouvelles techniques de vente et l’internationalisation des habitudes alimentaires atteignent l’Europe une génération après les États-Unis et l’on observe une convergence vers les modes de consommation et de distribution américains. Pour autant, on ne peut parler d’imitation, mais plutôt d’adaptation. Les chaînes de supermarché françaises et britanniques sont tributaires d’un passé spécifique et contraintes d’opérer sur un marché de taille modeste et fragmenté socialement et géographiquement. Pourtant, à partir de 1975, les supermarchés britanniques et français s’imposent à côté des chaînes américaines comme pionniers de l’internationalisation des achats et des ventes, de la modernisation du métier (mécanisation, scanners, gestion informatisée des ventes et des achats, juste à temps) et des ventes (développement de l’offre non alimentaire, crédit, fidélisation et segmentation de la clientèle). Le terme ‘américanisation’devient impropre au sens où les Européens n’imitent plus la grande distribution américaine, ils sont au même titre qu’elle à la frontière de l’innovation. Mieux vaut alors parler de convergence.

Texte intégral

introduction

  • 1 See several of the other chapters in this collection, and, more generally, the work of Matthias Ki (...)

1Historians have usually focused on heavy industry to assess the impact of the ‘American model’ in Europe. But whilst it is true that Taylorism and the Fordist production line symbolise the American way’ for historians steeped in the Chandlerian literature, facets of the American model were implemented elsewhere. Food retailing experienced a ‘commercial revolution’in the 1960s, with product standardisation, mass consumption, new sales techniques and an internationalisation of taste. A ‘managerial revolution’ saw long-standing family firms such as Tesco and Marks and Spencer hire professional managers, increase market share and open shops abroad. Work processes changed radically through increased mechanisation of points of sale, offices and warehouses. This chapter argues that, from the late 1950s, French and British retailers Americanised’, influenced by a new management orthodoxy spread by consultants, accountants and managers1 and by the success of American retailers. But even at its peak, this ‘Americanisation’ was, to borrow Luciano Segreto’s phrase, an “adaptation rather than an adoption”. British and French retailers operated within the constraints and opportunities of their own market and selected from the palette of American techniques those that suited them best: scale, diversification and internationalisation for France, standardisation and financial expertise for the UK. They were constrained by smaller and segmented markets with strong social and geographical differences in earnings and tastes. From 1975 onwards, while Americanisation increased in terms of internationalisation, concentration and management techniques, it declined in terms of product standardisation, as the focus of competition moved from price to quality and service. European retailers ditched the ‘Chandlerian American model’ in favour of flexibility and customisation in products and work practices. So, too, did American retailers. The result was a growing convergence between American and European retailing in the1 and 1990s, which differed from Americanisation’ since leadership was now shared between European and American firms.

the rise of the ‘affluent society’ in the 1960s

  • 2 W. Applebaum, Perspective on Food Manufacturers’ and Distributors’ Brands in the United States, Bo (...)
  • 3 Marketing in Europe, March 1975, p. 39.

2Urbanisation, growth in real incomes, the rise of female employment and increasing numbers of single households had a profound impact on retailing. The US population grew by 29 per cent between 1948 and 1963, but sales of foodstuffs rose by 84 per cent.2 Europe followed this pattern in the 1960s, as post-war reconstruction ended and real earnings started to rise. Fridges, still a luxury item in the 1950s, became a ‘must-have’ in the 1960s, boosted by the drop in prices associated with mass production: by 1974, 88 per cent of French households had a fridge and 12 per cent had a freezer.3 The result was a reduction in the number of shopping trips, especially for milk, butter and meat.

  • 4 Marketing in Europe, 25 April 1973, p. 2.
  • 5 W Mueller and L. Garoian, Changes in the Market Structure of Grocery Retailing, Madison, Universit (...)
  • 6 Marketing in Europe, January 1975, p. 3.
  • 7 Marketing in Europe, 1960, p. 691.
  • 8 Ibid.

3For most Europeans, shopping was a chore to be done quickly and conveniently. A 1969 survey of French shoppers suggests that speed of service was the most important factor in choosing a store, followed by the possibility of buying both food and non-food lines. By 1973, however, cheaper prices had become the main driver as inflation soared and recession loomed.4 This was true all over Europe. But style was also important: the young middle and lower-middle-class housewife of the 1970s found the co-ops “downmarket, cheap and frumpy” and yearned for novelty. Self-service was one answer. It came to Britain in the 1950s, some thirty years after the US5 then spread to continental Europe. By 1973, two-thirds of Belgian grocery sales were made in self-service outlets.6 In the6 Britain’s 7,000 self-service shops had a 20 per cent share of the grocery market. The majority were small and medium-size outlets, but 400 were American-style supermarkets, offering a one-stop shop for food and basic household goods in larger outlets. They quickly attracted a devoted following of busy young urban housewives and single workers for whom speed of service was paramount. Queues at the checkout were the main impediment to growth and supermarkets invested a lot of effort and money in reducing them. At the 1960 London Self-Service and Supermarket Equipment Exhibition, the major attraction was an automatically controlled conveyor belt which “enabled the cashier to do her job with the minimum of effort and so [sped] up her part of the check-out process”. Customers emptied their trolleys and packed their own goods.7 Convenience and style also played a role in the success of supermarkets. They offered trolleys with child seats and an attractive environment with streamlined refrigerated cabinets and large neon lights. By contrast, traditional shops and co-ops looked decidedly old-fashioned.8

  • 9 Retail Business, September 1964, p.3.

4As a result, supermarkets quickly established their supremacy in Europe. Britain led the way, with 175 in 1958, rising to 996 in 1962.9 But by 1972, Germany had more outlets than Britain, and France was catching up (Table 1, column 1). In terms of supermarket density, however, the leaders were Denmark and Belgium, followed by Britain and Switzerland (column 2). The Netherlands, Germany and France lagged behind while Southern Europe was almost untouched.

Table 1: Supermarket penetration in Europe at 1/1/72

Numbers

Outlet per million inhabitants

West Germany

2802

46

Great Britain

2110

58

France

2060

40

Netherlands

622

47

Belgium

606

62

Italy

600

11

Switzerland

335

55

Denmark

325

65

Source: Marketing in Europe, March 1974, p. 3.

  • 10 O. Ogenyi, Retail Marketing, London, London, Financial Times Management Pearson, 1999, p.43; Marke (...)
  • 11 Ogenyi 1999: 141.

5Contrary to received wisdom, France’s more severe planning laws did not prevent a reasonable level of supermarket penetration. Consumer pressure proved more powerful than the vested interests of small retailers and the French voted with their feet.10 France’s originality lay elsewhere. French retailers pioneered a new format, the ‘hypermarket’, characterised by larger stores (25,000 to 200,000 sq. ft against 4,000-25,000 for a standard supermarket) and a more diversified range of goods, including textiles (clothes, bedding, towels etc). Hypermarkets quickly spread to the rest of continental Europe (Table 2). By January 1972, France had 147, Germany 370 and Belgium 46. The UK only had 22, because British planning legislation favoured smaller outlets.11

Table 2: Hypermarket penetration in Europe at 1/1/72

Outlets

Outlet per million inhabitant

West Germany

370

6

Belgium

46

5

France

147

3

Great Britain

22

0.4

Italy

1

0.006

Source: Marketing in Europe, March 1974, p. 3.

  • 12 INSEE, Turnover in retailing, Paris, INSEE, 1990.

6By 1989, hypermarkets and supermarkets together controlled 56 per cent of the French food market, leaving just 37 per cent for independent food retailers and 1 per cent for co-ops.12 Small shops selling dry groceries, milk, butter and detergents suffered more than butchers, fruiterers and fishmongers. Small retailers resisted better in Southern Europe, possibly because customers demanded better quality meat, fruit and vegetables, but more likely thanks to State protection, particularly in France and Italy.

the rise of the ‘supermarket giants’

  • 13 Marketing in Europe, October 1973, p. 1.
  • 14 Retail Business, September 1964.
  • 15 Retail Business Annual Supplement, 1964, p. 28-37.
  • 16 L. Chavane, Le Phénomène Leclerc: de Landerneau à l'an 2000, Paris, Plon,1986.

7Most European supermarkets were owned by multiple retailers, old (Tesco and Sainsbury) and new (Asda, Carrefour). By 1972, Europe’s biggest supermarket group was Switzerland’s Migros, followed by Britain’s Tesco and Germany’s Tengelmann-Kaisers Kaffeegeschäft group.13 Europe’s supermarket chains were as varied in structure as their US counterparts. Britain favoured wholly owned chains and Sainsbury, Tesco and Safeway were the biggest players, although Marks and Spencer was the largest fruit retailer after 1964.14 Supermarkets concentrated in Greater London, the South, the South-East, and the North-West, mostly reflecting patterns of urbanisation and wealth. Initially situated in city centres, supermarkets spread to suburbs, with larger outlets and more parking space. France had both wholly owned chains such as Carrefour and franchised chains such as Leclerc. French franchising, though, was not as complex or organised as its US counterpart.15 The Leclerc group was born from a chance encounter between some farmers and Edouard Leclerc.16 He seized the opportunity and built a national buying group with a minimal outlay. Other groups, such as Spar, were just central buying agencies for small convenience stores.

  • 17 Hoover Handbook of World Business, 1999.

8The growth in size led some British family firms such as Sainsbury’s to follow the example of Marks and Spencer (in 1926) and Tesco (in 1947) in turning to the stock exchange. But in other European countries, most supermarket chains remained in family hands. Even amongst the firms that opened their capital to outsiders, founding families such as the Marks (M&S) and the Cohens (Tesco) remained influential. The switch to professional management started in the 1970s: Tesco managed a relatively smooth transition between Leslie Porter, son-in-law of founder Jack Cohen, and a ‘professional manager’, Ian McLaughlin. Marks and Spencer found it harder and only hired its first non-family Chairman (Derek Rayner) in 1984.17 Former McKinsey man Archie Norman was the first consultant to head a supermarket chain (Asda) in the 1980s.

  • 18 EDC for the Distributive Trades, Newsletter, 6 June 1968, p. 7.
  • 19 Investors Chronicle, 27 March 1981.
  • 20 M. Spilsbury, J. Toyes and C. Davies, Occupation and skill change in the European Retail Industry,(...)

9From the late 1960s, British retailers felt the need for specialised management training. Senior managers mostly went to Ashridge and Henley Business Schools, but complained that “all case studies related to manufacturing”. Things started to change in the late 1960s: Manchester Business School introduced a distribution option on its post-graduate courses, the National Economic Development Council for the Distributive Trade sponsored research at the University of Bradford to produce case studies in retailing, and the College for the Distributive Trade developed courses for management training. The Oxford Institute of Retail Management followed later.18 In 1981, though, Noel Stockdale, then Chairman of Asda, complained that “we could build 12 stores a year but we could not manage them”. Asda took 120 trainees a year, straight from school, and trained them in house.19 By the 1990s, European store managers were still recruited from sales staff or as management trainees, and the number of graduates only rose at head office.20 Food retailing remained a sector where ambitious youngsters with little education could reach the top.

the limits of americanisation

  • 21 K.A. Tucker, Concentration and costs in retailing, Farnborough, Saxon House, 1978, p.70.
  • 22 Marketing in Europe, July 1971, p. 8.
  • 23 Retail Business Annual Supplement, 1974.

10European retailers remained small compared to their US counterparts. Concentration even fell in the UK grocery business between 1961 and 1971 as more supermarket chains appeared.21 Europe remained a fragmented market with strong regional tastes and high inequalities. The elderly, housewives and rural households shunned industrial foodstuffs: in 1971, 69 per cent of German housewives preserved fruit and vegetables.22 Consumer pressure groups were under-developed by American standards. France was typical, with uncoordinated and under-funded family pressure groups and trade union offshoots competing with government agencies in a sea of consumer indifference.23 Britain was the only country where consumer associations had real influence in the 1960s, mainly through their magazines.

  • 24 Competition Commission, Supermarkets: a report on the supply of groceries from multiple stores in (...)
  • 25 M. Sieff, Don't Ask the Price: the Memoirs of the President of Marks & Spencer, London, Weidenfeld (...)

11The ‘American model’ was adapted to national tastes and regulations. French retailers, faced with strict planning laws but favoured by weak non-food retailing chains and lax building regulations, invented the shed-like ‘hypermarket’ and internationalised early. UK supermarkets, faced with tougher building regulations24 and higher land costs, excelled at financial and land management and were shaped by the historical strength of the co-operative movement, the dynamism of non-food retail chains and the long-term consequences of food rationing on shopping behaviour. European retailers could be at the forefront of innovation. Marks and Spencer was the first to airlift sun ripe winter tomatoes from the Southern hemisphere. Although they cost 50 per cent more, they were an instant hit. Marks and Spencer saw its food sales soar from £24 million in 1960 to £97 million in 197025 thanks to a string of new products for the affluent urban market.

12Was ‘Americanisation’ good or bad for consumers? This hotly debated topic cannot be resolved in a few lines. Still, two surveys of European food prices at the end of the 1970s, based on straight price comparison and a crude version of purchasing power parity, suggest that food prices were lowest in the countries where supermarkets were well established, and highest in the countries where small shops were protected. Rome emerged as the most expensive city, with Paris only marginally cheaper. London, Brussels and Copenhagen were average (Table 3). This was confirmed by a Financial Times survey. French manual workers had to work twice as long as Britons and Germans to buy a kilo of bread (Table 4).

Table 3: Food prices (pence per pound) in 1979

Table 3: Food prices (pence per pound) in 1979

Source: Marketing in Europe, July 1973, p. 1.

Table 4: Minutes of labour necessary for a manual worker to buy 1 kg of various products in London, Paris and Munich

London

Paris

Munich

Bread

13

25

23

Beef

119

188

157

Pork

82

204

149

Sugar

11

17

17

Butter

49

138

106

Source: Financial Times, quoted in Marketing in Europe, 28 July 1973, p. 1.

the turning point of the 1970s

  • 26 Retail Business, July 1964, p. 39
  • 27 Marketing in Europe, 25 April 1973.

13In 1964, the US correspondent of Retail Business wrote: “the trends that were noted in 1961...larger and fewer stores, electronic data processing, mergers and the growth of chains, the expansion into food discounting...have become full blown”.26 Ten years later, these trends reached Europe. During the 1970s, Europe’s growing convergence with the US on female employment, urbanisation, single households and GDP per head caused the market for convenience food to explode. In the depressed conditions of the early 1970s, canned food (especially canned vegetables and prepared meals) was one of the few segments exhibiting growth. In 1970, French production of pasta-based meals increased by 43 per cent in volume. In 1971, sales of canned prepared meals rose by 26 per cent and consumption of frozen foods by 38.5 per cent in value. Sales of the latter reached 36,000 tons (worth 331 million francs). Fish was the fastest growing item, with vegetables next. Sales of dried soup also rocketed once the memory of war-time dried eggs had waned. However, most French mothers still thought home made soup was healthier and offered better nutritional value and ‘industrial’ varieties accounted for less than 8 per cent of the soup consumed.27

  • 28 Investors Chronicle, 23 November 1977 and 5 May 1978; 9 June 1978; and 25 August 1978.
  • 29 Investors Chronicle, 16 December 1977.
  • 30 Retail Business, February 1971, p. 2.

14The 1970s saw customers’ renewed awareness of price. High inflation led to pressures for the reintroduction of price Controls, especially in Britain. But ultimately, it was the fierce competition amongst retailers that proved the strongest incentive to keep prices low. Asda offered low prices to customers in the North. Tesco and Sainsbury fought it out by keeping prices of “basic baskets” artificially low, increasing margins on other products. Tesco’s 1977 price-cutting initiative, ‘Operation Check-Out’, succeeded beyond its promoters’ wildest dreams and established it as a potential market leader. Sainsbury followed with its ‘Discount 78’operation. Its cost was more than offset by a rise in market share, from 7.3 to 7.8 per cent. European retailers also developed US-style consumer credit, offering credit cards with interest free credit in exchange for regular monthly repayments.28 But it was discounters that benefited most from the new price awareness. Born in the UK and Germany after the Second World War (although the Victorian co-operative movement was a precursor), they spread in the 1970s. The UK’s leading discounter, Kwik Save, was more ‘European’ than ‘American’, though, selling a limited range of goods in small town centre stores.29 Afraid of being taken downmarket, most shopping centres banned discounters on account of their working-class customer base. France was the exception, probably because most of its discounters belonged to ‘normal’ supermarket chains.30 Overall, the impact of discounters remained modest in Europe until the 1990s.

the internationalisation of european retailing

  • 31 Applebaum 1967: 27; J. Walsh, Supermarkets Transformed: Understanding Organizational and Technolog (...)
  • 32 The biggest being Vivo and Favor: Marketing in Europe, 22 January 1973.

15Pressure for lower prices stimulated mergers. American retailers concentrated before the 1950s, with a second wave in the 1980s.31 In Europe, mergers started in the 1960s and intensified in the 1970s, producing fewer larger outlets. Between 1965 and 1972, the number of grocery outlets dropped by 38 per cent in Belgium, 35 per cent in Sweden, 29 per cent in Germany, 27 per cent in the Netherlands, 25 per cent in the UK and 24 per cent in France. The US figure was 23 per cent. Concentration in Europe reached American levels although outlets remained smaller. In Sweden, seven supermarket chains controlled 74 per cent of food distribution by 1973.32 In France and Belgium, the top 2 per cent of grocery stores accounted for 50 per cent of total turnover. French retailers were less concentrated than the British, but more than the Spaniards and the Italians. Northern Europe was closer to America than Southern Europe.

  • 33 Marketing in Europe, 22 January and 23 February 1973; February and September 1974; and May 1975, p (...)

16The 1970s saw the rise of the first multinational food retailers. The Americans were the first to cross the Atlantic, driven by fierce competition at home. The Southland Corporation was typical, investing first in Britain (Cavenham Foods), then in France and in Germany. European retailers, faced with increased competition, either merged with local rivals (such as Belgium’s GB and Innovation-Bon Marché in 1974) or ventured beyond national borders. In 1973, Marks and Spencer, one of Britain’s most successful retailers, opened stores in Paris, Brussels and Lyon. France’s Carrefour set up 50/50 joint ventures in Belgium (with Delhaize), the UK and Italy. Its first hypermarket supermarket opened near Milan in 1972, with 35,000 lines, dry cleaning, banking services and a travel agency partly owned by Club Méditerranée. By 1977, Carrefour had 26 hypermarkets abroad, including ten in Spain and three in Brazil.33

17But the US market was the priority for most European retailers. In 1975, Belgium’s Delhaize bought Food Town Stores for $27 million. A wave of acquisitions followed (Table 5)

Table 5: European investment in US food retailing 1973-84

Table 5: European investment in US food retailing 1973-84

Source: compiled from data in M. Kacker, Transatlantic Trends in Retailing, Westport, Connecticut, Quorum Books 1985, p. 30-31.

  • 34 B. Sternquist and M. Kacker, European Retailing’s Vanishing Borders, London, Quorum Books, 1994, p (...)
  • 35 P. Halley, “The Internationalization of the Promodès Group”, International trends in Retailing, Ch (...)
  • 36 Wall Street journal, 23 April 1985.
  • 37 Investors Chronicle, 22 December 1978, and Tesco’s Annual Report for 2000.
  • 38 Marketing in Europe, July 1973, p. 2.

18These trends accelerated in the 1980s and 1990s. European retailers’ (food and non-food) investment in the US reached $3 billion in 1981 and $13 billion in 1990.34 The top ranking international operators in US retailing were, in descending order, Tengelmann (Germany), Delhaize Le Lion (Belgium), Ahold (Netherlands), Carrefour (France), Albrecht (Germany), Promodès (France) and J. Sainsbury (UK).35 Carrefour tried and failed to develop hypermarkets in the US but was more successful in South America and Asia.36 UK retailers, on the other hand, limited their investment to one foreign market, the US for Sainsbury, Ireland for Tesco, until the 1990s.37 Internationalisation also took the form of international buying groups to force manufacturers’ prices down. In 1973, the eleven Spar voluntary chain organisations, led by the British, German and Dutch branches, formed a joint buying agency called Intergroup Trading, with a buying power estimated at $34 million.38

new strategies for the 1970s

  • 39 Investors Chronicle, 3 February 1978.
  • 40 Department of the Environment, The Effects of Major Out of Town Development, London, HMSO, 1992, p (...)
  • 41 Marketing in Europe, March 1971, p. 2 and December 1972.
  • 42 Hiller Parker, British Shopping Development Master List, London, Hiller Parker and British Council (...)
  • 43 Ibid. 32-33.
  • 44 Department of the Environment 1992: 10.

19European supermarkets imitated American retailers in cutting prices and turning to mergers and acquisitions at home and abroad. They also adopted American-style ‘shopping centres’ in order to avoid the increased planning restrictions brought by France’s Loi Royer in 1973 and Britain’s 1977 central planning regulations from the Department of the Environment.39 Regional shopping centres, built around a supermarket but offering space to specialist retail shops, attracted less resistance from planning authorities.40 Modelled on the American shopping centres dreamt up by Sears, Roebuck and Sears in the 1920s, they spread to Europe in the 1970s. Germany opened its first in 1964, and had 60 by the mid-1970s.41 In London, Brent Cross, opened in 197 642 had all the features of a 1970s centre: large parking spaces, proximity to motorways and a concrete architecture that contributed to a feeling of insecurity, and a nose for popular ‘family entertainment’. In some cases, supermarket chains were mere tenants, but in others they were the promoters of the new shopping centres. Between 1965 and 1987, Asda built 35 shopping centres, such as the Trallwyn District Centre in Swansea, and ranked seventh on the list of developers of UK shopping centres.43 In the 1980s, regional shopping centres continued to grow. UK retailers imitated their American counterparts and moved away from the concrete sheds of the 1970s in favour of glass shopping arcades and ‘High Streets out of towns’.44

  • 45 Ibid.
  • 46 Investor’s Chronicle, 10 February 1978.
  • 47 Competition Commission 2000 vol.2: 87, and P. Hakansson, Beyond Private Label: the strategic view (...)

20But in the competitive and depressed climate of the 1970s, this was not enough. European retailers tried two other routes, diversification and product innovation. British retailers (in particular Asda and Sainsbury) finally built continental-style hypermarkets45 and increased the share of non-food items in ordinary stores. At Tesco, 38.5 per cent of sales space was devoted to non-food items by 1978.46 Product innovation was also explored. Some chains invested heavily in food technology. In the 1970s, Marks and Spencer started selling chilled ready meals and sandwiches. The idea came not from US supermarkets, but from America’s small family deli shops. Under Marcus Sieff’s watchful eye, M&S strove to replicate, by industrial means and in large quantifies, the taste of family cooking. In this sense, it was the Henry Ford of family cooking. And, whilst most American and British supermarkets stuck to national dishes like bangers and mash and steak and chips, Marks and Spencer again followed American delis in introducing foreign ready meals. Italian pasta, French stews, Indian pakoras and Chinese chow mein became top selling lines. Innovation also came in the form of processes. In the late 1960s, British supermarkets followed America’s lead and switched to centralised buying at regional (Tesco) or head office level (Sainsbury). This eliminated middlemen and gave them an advantage both in price and quality, as goods arrived faster on the shelves. Some went further: Marks and Spencer, having pioneered central buying techniques in the UK, started to buy directly from farms in order to influence farming techniques. New markets at home and abroad, bigger and cheaper stores in shopping centres, and new products were the recipe for success in the 1970s. For the most part, European retailers followed in the footsteps of America’s retailing giants. But regional tastes and government restrictions remained important forces in Europe. Conversely, consumer activism remained marginal and own-brands, although pioneered at the end of the Nineteenth Century by the British co-ops and Sainsbury, did not have the impact in Europe that they had in the US.47

globalisation and the challenge of flexibility since 1977

21From the midi 970s, the development of the common market and the introduction of new technology started a revolution that moved European retailers away from the ‘Chandlerian American model’ towards more flexibility in products, processes and work patterns. In spite of growing convergence, the ‘Euro-consumer’ remained elusive. National markets varied in size, with Britain’s market half the size of France. Rates of female employment ranged from 25 per cent in Spain to 51 per cent in Denmark. Geographical and sociological differences remained. Britons continued to consume Heinz canned pasta while the French went for dehydrated packets. But America too had its share of sociological and geographical differences, from California’s healthy eaters to Texas’ steak lovers. Lifestyles may actually be closer in Paris, London and New York, that between Paris and Poitiers, London and Liverpool or New York and New Orleans.

  • 48 Tesco, Annual Report, 2000.
  • 49 Competition Commission 2000 vol. 2: 89.
  • 50 See material produced by Cofremca, a European research institute on socio-economic trends.
  • 51 Competition Commission 2000 vol. 2: 94.

22Supermarkets, after trying unsuccessfully for two decades to standardise tastes, started playing with product mix. Products were adapted to the region and the sociological mix of the area: in London, Fulham’s Sainsbury stocks balsamic vinegar, melons and panettone, all conspicuously absent from the Lewisham branch. There, Parson’s vinegar sits proudly next to British (green) tomatoes and apple pies. Overall, standardised foods and huge supermarkets with little personal contact are fading away. The affluent Western consumer of the Twenty-First Century wants to feel special and different, and yearns for the village of yesteryear, without, that is, relinquishing the lower prices, car parks and long opening hours of today. Both American and European retailers use this trend to their advantage. First, in architecture: supermarket buildings are moving away from the ‘utilitarian shed’. In Britain, Tesco has adopted a ‘mock-Tudor style’, complete with black beams, identical to France’s Leclerc stores in Normandy. Regional styles are in : Avignon’s recently refurbished ‘Mistral 7’shopping centre replicates a Provençal Nineteenth Century market town: the Auchan hypermarket is flanked by smallish boutiques in mock two-storied houses complet with wrought-iron balconies and potted olive trees. Inside, supermarkets have been refurbished to give that ‘old market’ feel, and counters, once a dangerous waste of space and labour, are reappearing fast, either operated by supermarkets staff or leased to small traders. California’s Andronico’s markets, an upmarket supermarket chain, has now restricted traditional shelving to centre aisles and the three walls accommodate food counters specialising in meat, fish and ready meals. In France, the trend started in the 1980s, as the French rediscovered the ‘cuisine du terroir’. Supermarkets installed temporary stands of regional produce such as foie gras, choucroutes, and dried sausages, complete with tastings and folkloric costume. In Deauville, Normandy’s favourite resort for affluent Parisians, a centre-of-town medium-sized ‘Champion’ supermarket is snatching clients from larger edge-of-town rivals thanks to a fish counter staffed by a colourful fishmonger. In the UK, to give just two examples, Tesco reintroduced counters in the 1990s to answer consumer demands for personalised service48, while Morrison adopted a ‘Market Street’ format for the layout of its food halls.49 Sociologists attribute this to a yearning for security exacerbated by recession, fast socio-economic change and food scares such as BSE or salmonella.50 Consumers are turning to brands reminding them of bygone days, such as the ‘Bonne Maman’ jam featuring a white haired granny hand-stirring jam in a copper cauldron. Industrial groups have been quick to exploit this trend: most eggs sold in France and Britain, fresh from the batteryshed, are packed into boxes featuring idealised farms out of 1930s children’s books. In both Europe and America, some consumers have joined the ranks of the nostalgic in searching for old-style breeds and organic foods. Others are seeking reassurance in information, traceability and enhanced safety. This obsession with hygiene originated in America in the 1950s and spread to Europe with cellophane packing for fruit and vegetables. It intensified in the 1990s with the introduction of new safety standards borrowed from the pharmaceutical industry. Overall, consumers and retailers in Europe and America have narrowed the Atlantic gap in behaviour, strategies and structures. Concentration now reaches American levels in some countries.51 Market segmentation and conflicting consumer demands for customised goods have been the dominant trend of the 1980s and 1990s, in retail just as in manufacturing.

‘play global, act local’

  • 52 French Chamber of Commerce in Britain, “Distribution & Logistics”, Info, May-June 2001, p. 5 and 2 (...)
  • 53 Competition Commission 2000 vol.2: 88.

23Traditional ‘Chandlerian methods’ continued to be used in the 1980s and 1990s to cut costs. Internationalisation went further. By 1990, France’s top 24 retailers had 2,336 foreign outlets in Europe, 320 in the US, 35 in Japan and 102 elsewhere (East Asia and South America). British retailers owned 1,335 outlets in Continental Europe, 350 in the US, but none elsewhere (Table 6). With the rise of business to business internet dealing and online auctions, retailers can now take advantage of manufacturers’ differentiated pricing across countries, so that sourcing is increasingly globalised. Tesco has joined World Wide Retail Exchange (WWRE), founded in March 2000 to enable web-based transactions between retailers and suppliers, and has already taken part in online auctions for canned goods. France’s Auchan, Casino, Cora, and Britain’s John Lewis, Marks & Spencer and Safeway are also members.52 Asda now uses Wal-Mart’s European buying division. To cut prices, manufacturers also promoted cheaper own-labels, which are at last catching up in Europe. In the UK, their market share has risen to 35.3 per cent, close to the US figure, and sales at Asda and Sainsbury are reaching 40 per cent of turnover.53 Finally, American discounters are threatening to invade European markets and gain substantial market share there.

Table 6: Internationalisation of European retailers in 1990 (food and non-food)

Table 6: Internationalisation of European retailers in 1990 (food and non-food)

Source: STERNQUIST and Kacker 1994: 9.

  • 54 Ibid.

24But beyond that, Americanisation has not progressed further. On the contrary, retailers have moved away from Chandlerian standardisation and are trying to differentiate themselves through service. This is true both of American and European retailers. Western consumers now want “more for less”, to quote a Tesco slogan. Retailers can no longer offset lower prices by switching to lesser quality brands, cutting expenses on store equipment or shelving staff. European discounters like Aldi, Netto, Ed and Lidl failed to gain a substantial market share in the UK because consumers found their range narrow and their environment “cheap”.54 Sainsbury, Safeway and Marks and Spencer suffered from being stuck between cheaper operators now matching their quality and high-quality niche players such as Waitrose. On the other hand, Tesco, by achieving the right balance between quality, service and prices, overtook Sainsbury as market leader in the 1990s.

  • 55 Ogenyi 1999: 247.
  • 56 Ibid. Tesco sold Levi 501 jeans, Calvin Klein underwear, and Adidas sportswear.
  • 57 The first opened in July 2001 in Surbiton, the second in Twickenham, with 50 more in the pipeline:(...)

25Retailers are diversifying into petrol, medicine, books and jewellery. Sainsbury offered own-label paracetamol and plasters at a 40 per cent discount55 and Edouard Leclerc made a name for himself in defying big petrol retailing chains and funeral parlours. Many, such as Tesco and Sainsbury, are following the American example and selling designer jeans, sportswear and electrical products below market price.56 Supermarkets have also tried to improve service through new formats for stores and deliveries. Tesco reorganised its portfolio into hypermarkets, supermarkets, petrol stations cum convenience stores (Tesco Express) and convenience stores (Tesco Metro). The latter, situated in prime city locations, stock basic lines and upmarket goods for hard-pressed executives. Sainsbury and Marks and Spencer are also investing in convenience stores.57 New forms of shopping are being investigated, including internet shopping, to boost customer loyalty, but they still remain marginal, in Europe just as in the US.

  • 58 M. Maggart, “Determining Electronic Point-of-Sale Cash Register Requirement”, journal of retailing (...)

26Service improvement has also come from increased flexibility in working patterns. Staff are now expected to switch instantly between tills, customer service, stock management and shelve replenishing to reduce queues and achieve the ‘zero empty shelves’ target. More part-timers (students, mothers, old age pensioners) are employed at peak rimes, again a sign of ‘Americanisation’. But the biggest difference has been made by electronic point of sales (EPOS), introduced at the end of the 1970s. Jams now come from customers unable to pack their goods quickly enough as scanners come into operation. Sophisticated software is now used to redesign store layout and staffing levels by analysing customer in-store flows.58 Increased mechanisation and flow analysis add up to a new Taylorism, just when Taylorism appears to be dying in manufacturing industry.

the it revolution

  • 59 National Computing Centre, Computers in Distribution: a brief survey of computer application in th (...)
  • 60 Ibid., p. 24.
  • 61 Walsh 1993 : 94.
  • 62 Marketing in Europe, May 1973, p. 3.
  • 63 Investor's Chronicle, 22 December 1978.
  • 64 J. Reynolds, “Managing the local market: information technology applications in retailing”, journa (...)
  • 65 But part-timers are increasing everywhere in Europe, and specialists think they will reach British (...)
  • 66 French Chamber of Commerce in Britain, “Distribution & Logistics”, Info, May-June 2001, p. 9.

27As early of 1968, the UK’s National Computing Centre outlined potential applications of computing in retailing59 and stressed that some retailers already used software for sales analysis, invoicing or warehouse location.60 But the biggest potential lay in scanning technology. By 1972, it was ready for implementation61, but did not become widely used until the late 1970s. In 1973, only 100 retail firms in the UK had Sweda electronic registers, but many retailers introduced them when Britain joined the EEC, as existing machines could not calculate the new VAT on food.62 Sainsbury and Tesco introduced EPOS after 1978. Tesco’s pilot store in Wellingborough was linked to a central stock control computer at head office and to minicomputers in the group’s warehouses.63 Whilst computerisation helped industry decentralise, it increased centralisation in retailing. Up to the 1980s, store managers were responsible for the sourcing of fresh foods, deliveries and shelf allocation. From the 1980s, the introduction of sophisticated software analysing customer behaviour, such as ‘category management’, increased the role of head office. Data gathered at point of sale on what was bought, by whom and when, is now analysed by head office staff, who alter product mix and reallocate shelves.64 Logistics and complaints are being dealt with at central level. So shop managers are becoming mere executants and are being ‘reinvented’ as team leaders in charge of staff motivation and customer happiness65 IT software is used to reduce stocks and increase sales space at the store. Head office, informed in real time of what is being sold, immediately reorders goods from suppliers, summoned to deliver within the next hours. Retailers are also investing heavily in logistics software developed in the US but quickly introduced in Europe. In the late 1980s, Sainsbury was the first European retailer to switch to a central warehouse dispatching goods to individual stores. Automated forklift trucks cut manhandling to a minimum, as they moved goods in pallets from lorries to warehouse shelves, then back into the retailers’ lorries. But the extension of bar coding from individual items to pallets in the 1990s means that head office can now assess stocks in real time via hand scanners carried by forklift truck operators. Tesco and Asda took the lead as Sainsbury struggled with its central warehouse, already obsolete. Stores now have three ‘just in time’ deliveries a day from a central warehouse, to adjust to differing shopping patterns between mornings (old pensioners and housewives with children), afternoons (mixed) and evenings (young professionals in search of top ups and ready meals). And Sainsbury and Tesco are now developing collaborative Systems with suppliers to improve information flows and reduce lead times.66 All leading retailers are also experimenting with mixed deliveries (where goods from several suppliers are Consolidated into pallets for store deliveries) and fleet management (lorries with satellite positioning Systems are rerouted according to store needs and forewarn stores and warehouses of impending arrival so that staff awaits them for unloading). All are being developed and introduced concurrently by European and American retailers at the leading edge of technology, so that the term Americanisation’ can no longer be applied. Retailing is converging on both sides of the Atlantic, both in terms of consumer demands and retailers’ offers.

conclusion

28From the late 1950s, French and British food retailers entered a period of Americanisation, with, on the demand side, mass consumption and the internationalisation of taste, and, on the supply side, a management orthodoxy promoting growth through internationalisation, diversification, automation and centralisation. After 1975, the situation became more complex. In some ways, French and British retailers pushed Americanisation further: they concentrated, internationalised, diversified, mechanised, centralised and hired professional managers. But they also moved away from the ‘Chandlerian model’ by increasing flexibility, product choice and customisation. Still, American retailers followed the same patterns, so that by 2000, differences with European retailers were smaller than ever before. But this amounts to globalisation, not to Americanisation’, as leadership in product, processes and management is now shared almost equally between players on both sides of the Atlantic.

***

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Burt S.L. 1991. “Trends in the Internationalisation of grocery Retailing: the European Experience”, International Review of Retail, Distribution and Consumer Research, 1, p. 487-515.

Chandler A.D. 1962. Strategy and Structure, Cambridge, MIT Press.

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Hiller Parker 1987. British Shopping Development Master List, London, Hiller Parker and British Council of Shopping Centres.

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Kacker M. 1985. Transatlantic Trends in Retailing, Westport, Connecticut, Quorum Books.

Maggart M. 1981. “Determining Electronic Point-of-Sale Cash Register Requirement”, journal of retailing, 57(2).

Marion B., W. Mueller, R. Cotterill, F. Geithman and J. Schmelzer 1979. The Food Retailing Industry, New York, Praeger.

Molle P. 1992. Le commerce et la distribution en Europe, Paris, Liaisons.

Mueller W. and L. Garoian 1961. Changes in the Market Structure of Grocery Retailing, Madison, University of Wisconsin Press.

Office of Fair Trading 1982. Microelectronics and retailing, London, HMSO.

Ogenyi O. 1999. Retail Marketing, London, Financial Times Management Publishing, Pearson.

National Computing Centre 1968. Computers in Distribution: a brief survey of computer application in the distributive trades, Manchester, National Computing Centre.

Rachman D. 1979. Retail Strategy and structure: a management approach, Englewood, New Jersey, Prentice Hall.

Reynolds J. 1992. “Managing the local market: information technology applications in retailing”, journal of Information Technology, 7, p. 267-277.

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Sieff M. 1986. Don’t Ask the Price: the Memoirs of the President of Marks & Spencer, London, Weidenfeld and Nicolson.

Spilsbury M., J. Toyes and C. Davies 1993. Occupation and skill change in the European Retail Industry, London, Institute of Manpower Studies.

Sternquist B. and M. Kacker 1994. European Retailing’s Vanishing Borders, London, Quorum Books.

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Notes

1 See several of the other chapters in this collection, and, more generally, the work of Matthias Kipping and Rolv Petter Amdam.

2 W. Applebaum, Perspective on Food Manufacturers’ and Distributors’ Brands in the United States, Boston, Harvard University Press, 1967, p. 22.

3 Marketing in Europe, March 1975, p. 39.

4 Marketing in Europe, 25 April 1973, p. 2.

5 W Mueller and L. Garoian, Changes in the Market Structure of Grocery Retailing, Madison, University of Wisconsin Press, 1961, p. 14.

6 Marketing in Europe, January 1975, p. 3.

7 Marketing in Europe, 1960, p. 691.

8 Ibid.

9 Retail Business, September 1964, p.3.

10 O. Ogenyi, Retail Marketing, London, London, Financial Times Management Pearson, 1999, p.43; Marketing in Europe, May 1974, p. 1.

11 Ogenyi 1999: 141.

12 INSEE, Turnover in retailing, Paris, INSEE, 1990.

13 Marketing in Europe, October 1973, p. 1.

14 Retail Business, September 1964.

15 Retail Business Annual Supplement, 1964, p. 28-37.

16 L. Chavane, Le Phénomène Leclerc: de Landerneau à l'an 2000, Paris, Plon,1986.

17 Hoover Handbook of World Business, 1999.

18 EDC for the Distributive Trades, Newsletter, 6 June 1968, p. 7.

19 Investors Chronicle, 27 March 1981.

20 M. Spilsbury, J. Toyes and C. Davies, Occupation and skill change in the European Retail Industry, Institute of Manpower Studies, London, 1993, p. 48-49.

21 K.A. Tucker, Concentration and costs in retailing, Farnborough, Saxon House, 1978, p.70.

22 Marketing in Europe, July 1971, p. 8.

23 Retail Business Annual Supplement, 1974.

24 Competition Commission, Supermarkets: a report on the supply of groceries from multiple stores in the UK, volume 2: background chapters, London, 2000.

25 M. Sieff, Don't Ask the Price: the Memoirs of the President of Marks & Spencer, London, Weidenfeld and Nicolson, 1986, p. 184-185.

26 Retail Business, July 1964, p. 39

27 Marketing in Europe, 25 April 1973.

28 Investors Chronicle, 23 November 1977 and 5 May 1978; 9 June 1978; and 25 August 1978.

29 Investors Chronicle, 16 December 1977.

30 Retail Business, February 1971, p. 2.

31 Applebaum 1967: 27; J. Walsh, Supermarkets Transformed: Understanding Organizational and Technological Innovations, New Brunswick, Rutgers University Press, 1993, p. 71; B. Marion, W. Mueller, R. Cotterill, F. Geithman and J. Schmelzer, The Food Retailing Industry, New York, Praeger, 1979, p. 20 for a table of acquisitions of US food retailers to 1962.

32 The biggest being Vivo and Favor: Marketing in Europe, 22 January 1973.

33 Marketing in Europe, 22 January and 23 February 1973; February and September 1974; and May 1975, p.2; Investor’s Chronicle, 28 April 1978.

34 B. Sternquist and M. Kacker, European Retailing’s Vanishing Borders, London, Quorum Books, 1994, p. 4.

35 P. Halley, “The Internationalization of the Promodès Group”, International trends in Retailing, Chicago, Arthur Andersen, 1985 and S. L. Burt, “Trends in the Internationalisation of grocery Retailing: the European Experience”, International Review of Retail, Distribution and Consumer Research, 1, 1991, p. 487-515.

36 Wall Street journal, 23 April 1985.

37 Investors Chronicle, 22 December 1978, and Tesco’s Annual Report for 2000.

38 Marketing in Europe, July 1973, p. 2.

39 Investors Chronicle, 3 February 1978.

40 Department of the Environment, The Effects of Major Out of Town Development, London, HMSO, 1992, p. 101 et ff., and D. Rachman, Retail Strategy and structure: a management approach, Englewood, New Jersey, Prentice Hall, 1979, p. 54 et ff..

41 Marketing in Europe, March 1971, p. 2 and December 1972.

42 Hiller Parker, British Shopping Development Master List, London, Hiller Parker and British Council of Shopping Centres, 1987, p.2.

43 Ibid. 32-33.

44 Department of the Environment 1992: 10.

45 Ibid.

46 Investor’s Chronicle, 10 February 1978.

47 Competition Commission 2000 vol.2: 87, and P. Hakansson, Beyond Private Label: the strategic view on distributor own brand, Stockholm, Stockholm School of Economics, 2000, p. 5.

48 Tesco, Annual Report, 2000.

49 Competition Commission 2000 vol. 2: 89.

50 See material produced by Cofremca, a European research institute on socio-economic trends.

51 Competition Commission 2000 vol. 2: 94.

52 French Chamber of Commerce in Britain, “Distribution & Logistics”, Info, May-June 2001, p. 5 and 23. GlobalNetXChange and Transora are others.

53 Competition Commission 2000 vol.2: 88.

54 Ibid.

55 Ogenyi 1999: 247.

56 Ibid. Tesco sold Levi 501 jeans, Calvin Klein underwear, and Adidas sportswear.

57 The first opened in July 2001 in Surbiton, the second in Twickenham, with 50 more in the pipeline: Evening Standard, 27 July 2001.

58 M. Maggart, “Determining Electronic Point-of-Sale Cash Register Requirement”, journal of retailing, 57(2), 1981, and Office of Fair Trading, Microelectronics and retailing, London, HMSO, 1982, p. 18-20.

59 National Computing Centre, Computers in Distribution: a brief survey of computer application in the distributive trades, Manchester, National Computing Centre, 1968.

60 Ibid., p. 24.

61 Walsh 1993 : 94.

62 Marketing in Europe, May 1973, p. 3.

63 Investor's Chronicle, 22 December 1978.

64 J. Reynolds, “Managing the local market: information technology applications in retailing”, journal of Information Technology; 7, 1992, p. 270 and Economist, 4 March 1995.

65 But part-timers are increasing everywhere in Europe, and specialists think they will reach British and German levels by 2010. See Spilsbury, Toyes and Davies 1993: 4.

66 French Chamber of Commerce in Britain, “Distribution & Logistics”, Info, May-June 2001, p. 9.

Table des illustrations

Titre Table 3: Food prices (pence per pound) in 1979
Légende Source: Marketing in Europe, July 1973, p. 1.
URL http://books.openedition.org/irhis/docannexe/image/1975/img-1.jpg
Fichier image/jpeg, 117k
Titre Table 5: European investment in US food retailing 1973-84
Légende Source: compiled from data in M. Kacker, Transatlantic Trends in Retailing, Westport, Connecticut, Quorum Books 1985, p. 30-31.
URL http://books.openedition.org/irhis/docannexe/image/1975/img-2.jpg
Fichier image/jpeg, 143k
Titre Table 6: Internationalisation of European retailers in 1990 (food and non-food)
Légende Source: STERNQUIST and Kacker 1994: 9.
URL http://books.openedition.org/irhis/docannexe/image/1975/img-3.jpg
Fichier image/jpeg, 68k

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