Oval Partnership Briefing Note
Commerce dates back into the earliest stages of human history. Early human settlements would have traded with one another exchanging goods or services either under a bartering or gift system. Money was a much later development. Many cultures developed ‘commodity money’ which had an intrinsic value. They were based on things like gold, silver, peppercorns, shells etc. The first stamped coins date from about 600 BC. Commodity money was eventually replaced with representational money at first based on a claim on a real commodity but that link was eventually severed. An important component of modern retail had arrived.
Whether ancient economies were based on bartering, gift or commodity money the distance goods could be transported were very limited. Another development was needed. Markets and fairs meant that more human settlements came within reach of one another. Towns started to be built and the process of urbanisation began.
In the 16th Century, most goods would still have been bought at market stalls but a change was already under way. Stalls were gradually replaced with permanent shops with living space attached. The effects of this can still be observed in older shopping areas although it is less likely that shop owners will now live on the premises.
Early retail shops tended to focus on a narrow range of products. Local bakers, butchers, confectioners, fish mongers, greengrocers, newsagents, tobacconists etc. were common place. Over time economies of scale were to be found by shops offering a wider range of products. Early winners included newsagents as they expanded into tobacco and confectionary sales. However, a major limiting factor was shop frontage. Victorian shops tended to have narrow frontages making it difficult for shops to expand. The picturesque high street with lots of small independent shops was always going to be vulnerable to larger competitors.
Perhaps the biggest change in the retail sector has been driven by developments in the food and drink industry. The development of tin cans (patented in 1813) and self-contained fridges (1823) contributed to a revolution which continues to this day. In 1916, the first self-service grocery store opened in Memphis, Tenessee. Until then, customers had been served by shop staff. The new self-service method needed fewer staff. If this were the only factor then shops would have reached a certain size and further growth would have been limited. Another element was needed. As cars became more common, it was possible to travel further from home and return with larger amounts of shopping. Larger shops could now reach more customers than would be the case if all customers had to walk to their store. The supermarket had arrived.
Of course customers would only be willing to drive/travel a limited distance to a supermarket so again growth would reach a limiting point. To maintain growth, supermarkets started to expand beyond the range of the traditional grocer. Books, electronic goods and clothing started to appear. The development was welcomed by some and pilloried by others as specialist shops offer a range of expertise that a general supermarket would find difficult to match.
While all this supermarket growth was going on, there was a corresponding decline elsewhere. Traditional local shops such as fish mongers, greengrocers, butchers, newsagents etc. started to disappear. What emerged in their place was a new range of local shops: general grocers, mini-marts and convenience stores. Like the supermarkets, they offered a wide range of products albeit with a narrower range of brands. Many of these shops are independent but some operate under a franchise arrangement such as that of Costcutters which has 'more than 1,550 convenience stores in the UK'. Such local shops were an effective response to the rise of supermarkets offering one thing that supermarkets would find difficult to match- location. However, that is now changing. Large supermarket chains like Tescos and Sainsburys have buying and marketing power far beyond the reach of independent retailers. By operating smaller stores they could move into areas that would otherwise be dificult to reach. Sainsbury piloted their first Sainsbury’s Local at Hammersmith in 1998 and they now have more than 340 such stores. Tescos followed with Tesco Express and now has over 1,500 such stores. The expansion continues.
Impact of the internet
As the internet continues to grow, buying habits are changing. According to ONS statistics for 2010, some 60% of adults access the internet every day -nearly double the estimated figure for 2006. They did more than just access though, Some 31 million adults had bought or ordered goods or services online within the previous 12 months. Increasing numbers are now purchasing food through the internet. Why visit a local supermarket if you can get your shopping delivered to your door? Ironically this has resulted in a return to the past when things like milk and bread deliveries were a familiar sight in local streets but now the entire weekly shopping can be delivered.
In the new world of internet purchasing the proximity of a shop is not an issue and customer loyalty can change at the click of a button. However, as convenient and efficient as internet purchasing can be, there is something lacking. The company of others.
As local shops and traditional high streets declined, the opportunity for local people to meet and socialise reduced. As a result, communities were weakened. The resurgence of farmers markets have helped reverse this trend. One day per week, they offer an opportunity for the local community to get together in the same way as has happened for thousands of years.