Adjusting Our Lives

The recent concentration of retail trade in the hands of “big business” brings about a painful change in the economic situation of a wide section of American Jewry. The chain store has come to be the standard form of organization of the American merchandising system. It absorbs an increasingly greater part of the total volume, not only of the grocery, but of almost all other lines of retail trade as well.

Now, a centralized control of retail outlets for consumers’ goods under an efficient management is an economical method of distribution, but one which reduces considerably the number of independent merchants. Among this latter class, Jewish storekeepers form a large proportion. Prior to 1925, Jewish people found plenty of opportunities for retail trade enterprises in smaller cities and towns of the United States.

EFFECTS OF THE STOCK BOOM

Thus, up to the middle of 1920’s, retail trade still offered an opportunity for the enterprising business man with restricted capital. The newer developments in financial and commercial fields have however made all opportunity of this kind pretty much illusory. A tremendous influx of new capital resulted from the unprecedented activity of investment bankers and real estate and mortgage companies in promoting chains in order to obtain securities for sale, such as stocks and bonds secured by properties in locations particularly suitable for chain store units.

This activity of investment bankers was unusually great in 1926 and 1927, the years during which the growth of the chains reached spectacular proportions. Of course, as a result, it became impossible for a man with small capital to compete successfully with the giant corporations engaged in retail trade. In other words, the formidable competition of the chain store, not unlike the economic effects of the industrial trust, the department store and the mail order house a generation before, has nearly entirely extinguished the small business man.

NEW ECONOMIC CONDITIONS

Particularly for the Jewish small business element, the decline of the fortunes of the independent retail trade is a deplorable development. The Jew in America has come to regard the small store as the first rung of the steep ladder on which he was striving to climb from the despised occupation of a peddler or sweat-shop worker.

This economic tendency, the drift toward small scale commercial enterprise, received a blighting blow from the growth of the chain stores. These stores have expanded, since the war, much more rapidly than has retail trade as a whole. Chain stores, this is to say, have displaced independent unit stores and obtained a growing share of the available business. For example, while sales of independent groceries had risen thirteen points in 1927 over 1922, those of chain groceries had risen 183 points.

A TWOFOLD MENACE

The growth of the chain store movement represents a twofold threat to the Jew. Not only does he lose out as an individual business man but, owing to discriminatory anti-Jewish practices in the personnel and employment offices of the corporations, he is also unacceptable, more often than not, as store employe, except possibly in very distinctly Jewish neighborhoods. The situation is big with unspeakable hardships.

Here is a telling illustration. The independent druggist is being rapidly subdued by the drug-store chains and pharmacies. This development spells the doom of the registered pharmacist in business. The constant growth of drug-store chains will put the majority of the newly registered pharmacists on the payrolls as employees and no longer as drug-store proprietors.

In this way, the growing number of Jewish candidates for this profession are in danger of being subjected to the prejudices of personnel directors in drug – chain store corporations, who frequently have been touched by the virus of anti-Jewish discrimination.

UNCANNY SURVIVAL OF POWER

While recent developments in distribution have made small business a less secure and less certain way for the Jew in America to get ahead economically, the doom of the small retailer is still far from being a foregone conclusion. Gloomy prophecies as to its future, let us remember, were made more than once: first, when the department store appeared, and then again when the mail order house came.

In fact, however, the independent retail store has a unique socio-economic vitality, an uncanny power of survival. Close studies of small retail failures, even recently, have revealed the fact that the large majority of the bankruptcies are due to poor management rather than to other factors.

Again, even in the chain store age, if not as an outgrowth of the chain store movement and its complement, specialty and quality stores seem to offer an opportunity for the right business man with restricted capital.

Last but not least, small retailers have been organizing for group purchasing in order to meet the competition of the large units. Reports from various parts of the country indicate that by such economic co-operation independent retailers can hold their own. Moreover, here and there they have managed to gain a stronger economic foothold, by purposeful cooperation, under the spur of chain store competition.