The Foundation of Today’s Retail Ecosystem – 2

As I have stated many times before, ‘When one person changes, everything changes.’ Visionary individuals often inspire those around them to broaden their horizons. Throughout history, societies have witnessed countless examples of “The Butterfly Effect” small individual actions triggering profound and lasting chain reactions. The period between 1860 and 1960 in the United States, which had a profound impact on shaping today’s global supermarket and food retail industry, is precisely the result of such butterfly effects created by the personal ideas and efforts of different individuals. In this sixth installment of our series, which explores and provides insight into the individuals and institutions that contributed to the evolution of modern food retailing, I will discuss three important figures.

In the first part of our series, we mentioned a character named ‘Michael King Kullen,’ portrayed by Erol Günaydın in Ferhan Şensoy’s 1991 play ‘Kahraman Bakkal Süper Markete Karşı.’ We explained that this character was inspired by Michael J. Cullen (1884–1936), the founder of the world’s first supermarket, “King Kullen”. Born in 1884 to an Irish immigrant family, Cullen joined The Great Atlantic & Pacific Tea Company in 1902 at the age of 18 and worked there for 17 years. In 1919, he moved to Kroger Stores and remained until 1930. Henry Kroger, as detailed in the fourth part of our series, was an exceptionally creative entrepreneur who pioneered many innovations in food retailing. Inspired by his employer, Cullen carefully observed changes in consumer habits throughout his 28-year retail career and analyzed contemporary economic conditions thoroughly. American society was rapidly becoming a massive consumer society; moreover, nearly every household owned a car— in 1930, there were approximately 23 million automobiles in the United States, representing about 75% of American households. Cullen considered operating small, high-rent grocery stores in city centers increasingly impractical. Logistics for supplying such stores had become more complex, and offering credit and home delivery services was both exhausting and inefficient. Fuel prices were affordable; allowing customers to shop in larger, standalone stores accessible by car would make shopping part of social life. While serving as Kroger’s district manager in Southern Illinois, Cullen developed the idea that would eventually become the modern “supermarket”. In 1930, at age 46, he wrote to Kroger’s president proposing a new store model ‘focused on lower prices’, ‘larger floor space’, ‘cash sales’, ‘no delivery service’, ‘low rent costs’ and ‘ample parking’. However, Henry Kroger had already sold the company to a Wall Street banking consortium led by Lehman Brothers in 1927 and Cullen’s proposal was therefore ignored by the new management. Undeterred, Cullen resigned from the presidency in 1928, moved to Long Island with his family, and decided to establish his own store. He rented an empty garage at the corner of 171^st Street and Jamaica Avenue in Queens, New York, only a few blocks from a busy commercial district. On August 4, 1930, King Kullen Grocery Company—the world’s first supermarket—opened its doors, offering around 1,000 products, including popular automobile accessories and hardware items.

King Kullen quickly achieved success. As Cullen had predicted, customers traveled miles to shop there. He offered affordable and accessible food products, and the chain expanded rapidly during the Great Depression, when price sensitivity was high. King Kullen stores utilized large, old buildings (such as factories and warehouses that had been closed and abandoned at the time) located in low-rent areas on the outskirts of densely populated regions. Facilities were simple, service minimal and shelves stocked primarily with well-known national brands. The stores’ unpretentious, affordable structure matched the expectations of Depression-era customers. To attract customers with cars and encourage them to shop in bulk, each store had a large, free parking lot in front. By 1936, there were 17 King Kullen supermarkets generating approximately $6 million in annual revenue. Cullen was planning for faster national expansion and franchising. However, that same year, he died unexpectedly at the age of 52 following an appendectomy; after his death, the company’s growth slowed.

Until 1937, there was an object limiting customers’ purchases in all stores: the shopping basket. Once filled or “heavy enough”, customers proceeded to checkout. Sylvan Goldman, owner of ‘Humpty Dumpty’ supermarkets (first opened in 1934), overcame this limitation by inventing the ‘wheeled shopping cart’. He also worked hard to introduce the world’s first wheeled shopping cart, available in his stores, and to encourage customers to get used to it, he hired male and female models whose sole job was to push the shopping cart around the store from morning to night! The first cart featured two removable baskets, was actually very well designed for customers but space-consuming for stores. This problem would later be solved in 1946 by Orla Watson, who redesigned shopping carts to be telescopic (nesting).

Bernardo Trujillo was born in 1920 in Bogotá, the capital of Colombia, where he studied law. He had a keen ability to observe and discern, as well as a remarkable talent for communicating his insights and persuading others. After graduating from law school, he emigrated to the United States and began teaching Spanish in Ohio. However, shortly thereafter, his path crossed with a company called NCR, headquartered in Ohio. At that time, this company was producing cash registers that facilitated cash transactions, giving change, and storing different banknotes in separate compartments, particularly for retail stores and supermarkets. Initially hired as a translator for customers of Latin American and Mexican descent, he quickly distinguished himself by explaining to business owners “all the recent developments in food retailing” and details about consumers’ real lives, sharing his sociological observations to help them run their stores professionally. NCR management realized that it was not the American sales staff who were actually persuading South American and Mexican customers and selling the cash registers, but Bernardo. Statistics supported this fact; unlike meetings with English-speaking American customers, which did not require the company’s interpreter, sales meetings attended by Bernardo always yielded positive results! The company strategically transformed his approach into its marketing strategy, organizing seminars on modern retailing before selling cash registers. Trujillo trained approximately 11,000 people and emphasized principles such as building large supermarkets with ample parking ‘No parking, no business!’ Starting in the 1960s, with the exception of densely populated locations such as Manhattan in New York, almost every supermarket in America was designed following Bernardo’s principles, as standalone structures on independent plots of land with their own parking lots. Moreover, even Frenchmen such as Denis Defforey, Marcel Fournier, Gérard Mulliez, André Essel, Bernard Darty and Paul Dubrule attended his seminars. To clarify, these individuals are the French businessmen who founded Carrefour, Auchan, Fnac, Darty and Accor Hotels, respectively. All of today’s retail giants, such as the American Walmart, German Aldi, and Lidl, were founded between 1960 and 1970, just like the French Carrefour! Thanks to Trujillo’s strategy, NCR Corporation sold hundreds of thousands of cash registers to chain supermarkets. Before his death in 1971, he was already known in the early 1960s as the ‘Pope of the Supermarket.’ Understanding the history and spirit of modern retailing would be incomplete without acknowledging Bernardo Trujillo.

With this relatively extensive series, I have attempted to explain the history of global food retailing through its key milestones, historical figures and significant companies. I thank everyone who patiently read the previous five articles, reflected upon them and provided feedback. In our next article, we will shift our focus to Türkiye and discuss our local supermarket chains, which are our primary area of interest. Stay with love and knowledge; until next time.