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Richard N. Picard E9158 AK fNVESTEGAflON iNTO 'E'HE NEED FOR A CHAN-OPERAWD SQWRETTE Thais fie: flu Doro. aé M. A. MlCHiGAN SVATE UHEVERSETY Richard N. Picard E9158 THESBS LIBRARY Michigan Static University PLACE IN RETURN BOX to remove this checkout from your record. TO AVOID FINE return on or before date due. MAY BE RECALLED with earlier due date if requested. DATE DUE DATE DUE DATE DUE 6/01 c:/ClRC/DateDue.p65vp.15 AN INVESTIGATION INTO THE NEED FOR A CHAIN-OPERATED SUPEKETTE By R1 Chard No P1 Card AN‘ABSTRACT Submitted to the School of Graduate Studies of Michigan State‘University of Agriculture and Applied Science in partial fulfillment of the requirements for the degree of .MASIER OF ARTS Department of marketing and Transportation.Admistration Curriculum in Food Distribution Sponsored by The National Association of Food Chains 1958 ‘i R1 chard Ho Pi card The purpose of this study was to review the historical trends in the size of food stores since 1920, to investigate the need for a lower volume food store, and to present the potentialities of a suitably designed superette which might be profitably operated by a food chain. The material for this study was gathered from a number of sources. Personal interviews with men prominent in the food industry provided the investigator with a general knowledge of the many problems involved in the chain-operated superette concept of food distribution. A.number of food organizations were surveyed by written correspondence. Opinions and views of both large regional chains and affiliated independent groups were obtained from.this correspondence. .Added insight was gained through correspondence with a manufacturer of food store equipment, and a manufacturer of prefabricated low-cost buildings. Secondary data including books, periodicals, theses, convention proceedings, government bulletins, and textbooks proved to be a source for general applied information. Where ever possible, the most recent pertinent information was used. The investigation revealed that due to the increase in competition between supermarkets, and the inability of certain areas to support supermarkets, the time is ripe for the food chains to scrutinize the potentiality of the superette. The superette could Operate in areas Which could not support a supermarket. The superette does not require as :nany family units, or as much building space, as does a super- mrkOt o ‘0. Richard N.Pioard In the past years superettes, as a class, have not been as profitable as supermarkets. This is one of the primary reasons why food chains have shown little interest in this type of food store. Recent studies in store design, con- struction, and space allocation, however, might improve the profit structure of these smaller stores. Inventory control, and space allocation studies conducted by the Kroger Company indicated that stores could be reduced in size without a reduction in sales. These same studies revealed that efficiency and gross profit could also be improved. These principles could be applied to modern superettes to improve their Operating efficiency and profit. InnovatiOus in building design and construction could be utilized in future superettes. Conclusive results have been obtained by some major food chains which indicate that building costs can be substantially reduced.' The application of prefabricated buildings could also be used when designing future superettes. Superettes might aid a chain organization to reap a richer harvest from its operating area. These stores could profitably exist in locations which will not support super- markets. Many current food stores are obsolete, or uneconomical to operate dispite good locations and relatively low rentals. ‘ Some of these stores might be converted into efficient and profitable superettes by incorporating modern space-saving techniques and merchandising methods. In the long run, a chain may find it cheaper to modernize an established store than to completely withdraw from an area. on . «as- I. I u a a . s . s .. V . a . u I... ,. «a O I i o I . ....( . In . a , . .\ n | I O t. r a d . a .i . .. u .r . y o . u . r. .. O r - .‘ v . a . \ . ,. 1 . \ . v w v c. o . V. A; . .s . [a I . - U . k e I . t . 4.. t t .I . o . 1 I ll . I . a . n. s , . A y . .. x c . .. ) . I . .. t. A I a h a , ,. ‘ . e . .. o In \ .40 . a . O. .. o 5 . “N . y. t e . .J. t f . I. O . u s . .- r v.- A . v . o. 1' II; . ., ‘ i n‘. o .e . v . Zu‘ y . , I , l- . - . r z 0 ~ u - a .I. r d .. .. O . D Richard N. Picard The investigation concludes that while not every area could possibly support a supermarket, many areas could possibly support a profitable superette. As competition between supermarkets becomes more severe, the superette may serve as a future avenue for chain expansion and growth. I .. a . - ' ' . n r ‘ . a a . I. v v I. I Vr. A . r. I I .I w u, e l . s . o u 7 4e. ‘ a .. .I. a eI e l a . I 0 . A n . l . a e I by . I I U I I a D I . r .. r . a. e . I ,. o. r I .. I . n. e . t I I 0 e. .. r I . l - . C l I ' no .r x .. ... .r I a I . .r 4 . v n. o a. is . ‘- . .4 l. I I O O O . r {,0 A . - ... u . ‘ M I e .u o . s O .. A. Q. p . I . I. o e , .r . l ,I . I . I o I f . u \ t . ' '- t.. | . r . .r r I .. I ‘ . z . e . a . u a . is . I \ "r .::r 1' ‘V 4 '7\.T 11$ T\VY7V. r": “ r“ 1"“ '1 71 Al} 13“ 1—1.") Inf-L Iknt.‘ .1 4‘ kt, e-‘T i-y‘l .L O l I[;- I...J-¢1) r OLKK ’fin Richard N. Picard A THESIS Submitted to the School of Graduate Studies of Michigan State University of Agriculture and Applied Science in partial fulfillment of the requirements ' for the degree of LnQTER '.fi - CE v APTS . Department of Marketing and Transportation Administration Curriculum in Food Distribution Sponsored by The National Association of Food Chains 1958 The Food Distribution program at Michizrn Siete University is under the sponsorship of the National issueintisn of Food Chains ACE-3307.” EDGE‘BETT‘ITS The writer wishes to express his sincere appreciation to Dr. E. A. Brand, Director of the Food Distribution Curriculum, for his interest, supervision, and helpful suggestions in the preparation of this thesis. Gratitude is also due Hr. R. C. Kohler, for his guidance in the initial development of this 1nvestigation. The writer is indebted to the v:rious contributors, too numerous to mention. However, special recognition is due to at. John Hassel, Director of Store Planning of the Kroger Company, Mi. Paul L. Earn, Real Estate manager of the Detroit Division of the Kroger Company, Mr. E. H. Stone, Vice President of I. C. Bohack Compnry. Mr. D. P. Grimes, President of ISA, RI. R. I. Pyerly, President of Super Vslu Stores, Inc., Er. E. 3. Rows, General Manager of the Raleigh Division of the Colonial Stores, Inc., Mr. C. Kornolau, Director of Research of the Super Market Institute, Inc., and Hr. C. L. Arnold, Director of Personnel of tne Kroger Company for their cooperation in making available their resources for much of the material.used in this investigation. Sincere gruditude is also due my wife. Patricia, Whose aid and effort has contributed immeasurably to this thesis. TATLE OF COTTT‘ETJ 8 CHAPTER * . ’ - PAGE I. THE PROBZEH LED DEFINITIONS OF THREE USED . +4 The Prgblem e o e e o e e o e e e e e o o e e 0 O O O O O C O Statement of the problem -. O I Impertance of the study . , . .'. .,. Definitions . Supermarket . Superette . .I. Bantam Super . ¢ . Food Chain . Independent . .i. .r. Limitations and Scope . Methodology 0 o e e e e o e o e o e 6 e o e o e 4 mammmmo‘pkt—“HH II. HISTORICAL TREND :3 THE SIZW OF "JED tr STQHES . The service-type period . <5. The_selI-service combination store . 12 The supermarket period , . 17 Why the supermarket movement . 25 The post-war supermarket . 25 The supermarket movement . , . 26 Summary, Chapter II . o e o e o 0'. e o o o o o 34 CHAPCER EAT-T’NJESUPER................. III. ‘F'L‘J 5-] Brief history of the Bantam Super operation. Description of the typical Bantam Super . 0 Brand selection and space allocation . Specialized equipment .. Owner Advantages of the Bantam Super operation Customer advantages of shopping in Bantam Supers Summary, Chapter III . IV. POTENTIALITI‘FTS OF WEE 30???me ‘. Current exgansion plans of food chains .0. Profitability of superettes . Inventory control and space allocation . Proposed Operating Areas for Superettes . Densely populated metropolitan areas . Rural DOPUIation areas 0 I I e o o e o o o e e Prefabricated Lower-cost Buildings . Remodeling Obsolete or Uneconomical Stores . Concomitant Aspects of a Profitable Superette Upera’tion O O I O O O O I O O O O O O O O O O 75 Maintaining chain representation and growth. 75 Training locations for future store managers 78 Summary, Chapter IV 0 e o o e e e e e o o e o 0 79 v. SL124} “REY Aim COImSION . 0 3 g . g g o o g . 81 Summary 0 o e e o e o o e e o e o e e o e e e e 81 COUCIUSIOH o e 9 o 9 o e e e o o o e o e e o e O 84 BIBLIOGWI—LY o I O o I O O 0 O O '0 o o e o.
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