New perspectives on 20th-century European retailing

Introduction

Retailers are often regarded as ‘intermediaries’, whereas in fact they are actors in their own right. They influence, and are influenced by, their local and national ‘ecosystems’, together with other national retailing ‘ecosystems’ with which they interact. The history of this process in 20th-century Europe has been incompletely explored, while the English-language literature remains dominated by the ‘Americanisation’ model, whereby innovations pioneered in the United States gradually diffused to the more ‘backward’ countries of Europe, a process mediated by barriers to competition that varied in extent and severity between different European nations. In this essay, we re-evaluate this model in the light of the special issue authors’ contributions and other recent studies, including the new specialised journal History of Retailing and Consumption.

The United States is often shown to have been a major source of knowledge transfer to Europe, but the information flows were more complex than many advocates of the Americanisation model acknowledge. For instance, while most marketing scholars see the sources of the ‘modernisation’ of European retailing in American department stores, chains and supermarkets, recent research has shown that such an innovation as self-service began in several small independent American grocery stores during the 1910s and ‘spread in small retail outlets, sometimes well before the advent of the large retail spaces which are traditionally viewed as the origin of the self-service economy’.¹ Moreover, American-inspired formats were not always appropriate welfare-maximising models for European countries (and, arguably, in some cases, such as regional shopping malls, even for the United States).

Americanisation model

The story of Europe’s retail revolution during the 20th century (and particularly after 1945) is sometimes presented as an irresistible March of American best practice across Western (and eventually Eastern) Europe in the face of uneven, but sometimes substantial, barriers in individual nation states that were often slow to appreciate the advantages of becoming part of America’s ‘Market Empire’ of consumer sovereignty.²

Detailed historical analysis reveals a more complex process of international knowledge diffusion, where the ‘pull’ of European retailers seeking improved methods was often at least as important as the ‘push’ of American evangelists for these methods. Europe had a long tradition of bench-marking retail productivity and best practice, knowledge-sharing and co-operation in diffusing innovations – sponsored by major retailers, retail trade associations and retail academics (often working in partnership with trade bodies). International knowledge-sharing was facilitated by the lack of substantial foreign direct investment in most sectors of retailing prior to the 1980s, which reduced the risks to participants’ competitive advantage (as direct competition between firms based in different countries was extremely limited). Performance bench-marking exercises could produce surprising results; for example information exchange between British and American department store associations during the 1930s revealed that British department stores had higher productivity and greater scale economies, a result corroborated by recent re-analysis of their raw data.³

While foreign direct investment in most sectors of retailing was rare during the early and middle decades of the 20th century, it was not always insignificant, as illustrated by the case of post-war European supermarket development. In 1959, Nelson Rockefeller opened its first Supermarkets Italiani in Milan, with the help of a low-interest Italian government loan.⁴ The Jewel Tea Company in Chicago, born in 1901,⁵ is one of the American corporations whose investments in the first European hypermarkets has recently been revealed.⁶ As for sales methods, the expansion of US consumer durables’ firms into European markets brought with them two important and enduring retail innovations – American-style door-to-door sales, organised on modern corporate lines, and instalment credit products (typically provided as an integral part of the sales transaction and marketed by the salesman).

I. M. Singer & Co. pioneered the extension of corporate direct sales methods to Europe from around the early 1860s.⁷ Singer was soon followed by Baldwin, a Cincinnati dealer who built a piano firm, then a chain of company-owned retail outlets which – from 1875 – introduced consignment of his instruments for independent retailers and financed individual customers’ purchases after hiring sewing machine salesmen.⁸ In contrast with this fully fledged Americanisation by manufacturers, some large retailers, both in Europe and in the US, adopted a less radical style of instalment plans that evolved organically from retailers’ traditional credit practices. For example, the business that became the large Paris department store Palais de la Nouveauté – founded in 1856 to sell furniture and household equipment to a popular market – soon developed a system whereby instalment credit was collected from customers by an employee, weekly, fortnightly or monthly.⁹

The inter-war years witnessed an intensification of such direct marketing by manufacturers of new consumer durables, such as Frigidaire (a subsidiary of General Motors) and Hoover. US firms also led the way in introducing new instalment purchase systems for cars to Europe, a process that led several US consumer credit firms, including Consumer Investment Trust and Continental Guaranty, to establish subsidiaries in several European countries, bringing with them innovations such as credit risk assessment.¹⁰

Yet even here, diffusion was not a straightforward, unidirectional, process. For example, by the 1920s, Sweden’s Electrolux was pursuing a multinational strategy of direct sales and (where necessary) manufacturing subsidiaries. By 1929, it had established over 350 sales offices in practically every part of the world (together with manufacturing plants in Sweden, Great Britain, Germany and France).¹¹ Its sales methods appear to have been as sophisticated as those of the most successful US vacuum cleaner firms; in 1934, its US subsidiary displaced Hoover as the American vacuum market leader, by both value and volume.¹² Even Hoover’s European expansion was not a purely American initiative, as its European subsidiaries were operated by its British sales and manufacturing arm, which used the methods of the US parent but was run by British executives from 1927.¹³

Americanisation was a particularly active force in the late 1940s and 1950s, under the Technical Assistance Program and other initiatives that reflected both the urgent need for European post-war reconstruction and the political imperatives of the Cold War to promote ‘consumer democracy’ as an alternative to communism. Organisations such as the American Supermarket Institute evangelised the ‘American way of retailing’.¹⁴ However, a recent study of the development of self-service and supermarkets in West Germany found that, while promotion by various US agencies was important, the decisive factor behind the modernisation of grocery retailing in the Federal Republic (and, to some extent, in other West European nations) was the establishment of European networks promoting rationalisation.¹⁵ The co-operative movement was in the vanguard of this process, building on long-established fraternal links between the various national co-operative organisations, while voluntary chains were also particularly active in building knowledge-sharing networks.¹⁶

Moreover, European countries adapted, or even rejected, some key characteristics of the American retail environment. For example, while West Germany was happy to accept self-service methods, it was much less keen to embrace the American trend towards large supermarkets and suburban or out-of-town shopping malls, given their potentially devastating impacts on central shopping disricts. In 1972, shopping centres were estimated to account for only 4 per cent of total retail sales in West Germany, compared with over 40 per cent in the United States.¹⁷ Urban planning and other policies (such as supporting resale price maintenance and limited shopping hours) both slowed the growth of the new retail formats and reduced their competitive advantage compared with small and other established retailers. These actions prevented the decline of central urban area shopping that was so prevalent in the USA and – to some extent – the urban decay and attendant social problems that became characteristic of US cities by the 1970s.

Even at this stage of systematic adaptation of American retail formats, large European retailers should not be depicted as pure and simple followers. For instance, in Belgium, the GB company, after wavering between two American models, the shopping centre and the discount department store, chose the latter. However, it focused on low-cost furniture and in 1961 combined food and non-food self-service, which – although unusual in the US – had been observed by their CEO in 1959 at the eighth store of Grand-Way (the discount mart division that New Jersey’s Grand Union had been the first American retail chain to spin off in 1956). ¹⁸ Thus, in 1961, Belgium became the first European country to introduce hypermarkets; contrary to the perceptions of many French scholars that France was Europe’s hypermarket first-mover. Antwerp’s Grand Bazar opened three hypermarkets in Bruges, Auderghem and Anderlecht, two years before Carrefour, and two of them were bigger. In France, the creators of the Carrefour hypermarkets in 1963 chose another American model – the supermarket – but they too soon ‘brought together food and non-food “under one roof”, creating a hybrid formula for success’ that ‘Wal-Mart did not adopt before 1985’¹⁹.

The weakness of crude ‘Americanisation’ models is also evident when we examine technological innovation within the store. For example, one key innovation, machine-readable codes, was actually pioneered in Switzerland. Retailing coordinates two types of flows: first goods flows from manufacturing firms or farms to warehouses and stores, and second goods, customers and data channelled through their stores. The largest Swiss retailer, Migros, a federation of regional co-operatives, introduced self-service in 1948, which led to growing customer flows, then to queues at the actual point of exchange of money and goods, the checkout.²⁰ In the mid-1960s, Zellweger Uster AG, a leading Swiss firm in the field of electronic technology, approached Migros with plans for an ‘automatic checkout’. In 1967, the two firms decided to collaborate to accelerate flows of customers, information and data, using computer technology. In June 1972, Migros tested ‘the first electronic checkout of the world’ for 10 weeks in one of its stores, having thus beaten American competitors by three months.

However, in autumn 1972, Migros decided against implementing the new registers in all its stores because of ‘insufficient productivity increase and lack of internal compatibility’ and because of the feeling that a firm-specific solution would not find enough support in the increasingly international world of goods.²¹ Instead, Migros imagined a steady flow of goods. As with self-service, it was left to the American grocery industry to make a further step towards a better and higher canalisation of goods: in 1973, it agreed on a standard for article numbering, the Universal Product Code, then on a computer manufacturer, IBM (and not a cash register manufacturer like NCR), to work out the bar code symbol. In 1976, Europe adopted a similar standard, the European Article Numbering, with the same developer, enabling the implementation of scanning checkouts. Their purpose was different from the experiments at Migros: gathering sales data for ordering processes and marketing purposes, i.e. rationalisation for the retailers’ computer-aided supply chain. ‘The realisation of this concept, though, took a long time: Only by the mid-1990s would it be adopted in most European stores, thus bringing about ‘the convergence of the three flows in retailing: customers, goods, and information’.²²

Patterns of European retail evolution

While ‘Americanisation’ models cannot fully explain the evolution of European retailing systems and methods, it is clear that Western Europe followed a process of retail change that had some commonalities but varied in both its pace and nature between European nations. Post-war retail modernisation is often characterised as a north–south diffusion process. This reflects not only greater legislative restrictions on the development of new shops in countries such as Italy and Spain, but a variety of ‘demand side’ factors, including household incomes and urbanisation levels. Female labour participation rates also appear to have been important, as women’s entry into the labour force made one-stop shopping more attractive, encouraged a switch to prepared foods (given that housewives had less time to do their own food preparation) and facilitated car purchase by raising household incomes.²³

Table 1 suggests that national socio-political systems were also important. Two indicators of retail ‘commercialisation’ are shown for 18 European countries in 1955 (or the closest available year) – the proportion of employees (excluding family members) and the proportion of females in the retail labour force. The first provides an indication of the trend towards ‘corporate’ rather than family retail establishments, while the second indicates the extent to which each country had followed the American pattern of substituting skilled male labour with cheaper female labour – often in conjunction with deskilling innovations such as self-service or semi-self-service methods.

Table 1. Characteristics of the retail labour force in Western European countries, 1955 (or nearest available date).

Country	Employees in retail labour force (percent)	Percentage females in retail labour force	Estimated private per capita consumption*
Iceland	83.0	45.0	505
United Kingdom	77.0	56.0	710
Finland	76.0	64.5	415
Sweden	75.0	52.5	665
Norway	69.5	57.0	670
Denmark	60.0	41.5	655
Ireland	59.0	47.5	425
Switzerland	54.5	50.5	670
Germany	51.5	52.0	560
Portugal	50.5	15.5	210
Austria	50.0	54.0	485
Spain	46.5	15.0	270
France	43.0	47.5	600
Luxembourg	41.0	44.0	630
Netherlands	41.0	45.0	505
Greece	23.0	10.0	185
Belgium	18.0	44.0	625
Italy	15.5	40.5	320

Notes: All data are for 1955 apart from: Finland (1953), France (1954), Greece (1951), Ireland (1951), Portugal (1950), Austria (1954 for percentage female), and Spain (1950 for percentage female). German data for estimated private per capita consumption includes the Saar. *In dollars at average European prices. Sources: James B. Jefferys an Derek Knee, Retailing in Europe. Present Structure and Future Trends. London: Macmillan, 1962, 17, 20, and 169.

While per capita income is significantly correlated with these variables, the ranking of countries also appears to be strongly clustered into nations with close geographical and/or cultural proximity. The Scandinavian countries plus Britain and Ireland had the largest ratios of employees to total workers and were also characterised by substantial female retail staff ratios. With the exception of Ireland, they were also among the countries with the most strongly developed co-operative movements, possibly reflecting socio-political systems that were less vulnerable to retail trade association lobbying to block new competitors.²⁴ A German-speaking group (Germany, Austria and Switzerland) can also be identified, with employee ratios of 50.0–54.5 per cent and female employment ratios of 50.5 to 54.0 per cent, together with a north-west European group (France, Luxembourg and the Netherlands) sharing very similar ratios for the two indicators, while Spain and Portugal again share broadly similar ratios.

National comparisons reveal several similar evolutionary patterns for major retail formats, despite differences in the speed of these processes. For example, the department store format diffused across Europe during the last third of the 19th century, being present in most European capitals by 1914. It also appeared in a smaller version in medium-size towns in France or in Switzerland. Smaller department stores – such as Le Grand Bazar in Lyons or the (Swiss) Gonset chain, which sprawled from Yverdon in the 1920s – were hybrids between the large units, which provisioned a wide population base, and small shops with a local reach.²⁵ In sum, they were the equivalent of the provincial department stores in England, whose variety has been emphasised by Jon Stobart, and of local department stores, whose role has been pinpointed by Vicki Howard in her recent book on American retail.²⁶

Growth then slowed during the inter-war years, when department stores defensively amalgamated to meet the challenge of the rapidly expanding multiple retailers. Continental department stores also reflected on both Woolworth’s rapid colonisation of Britain’s high streets and the success of Marks & Spencer’s Penny Bazaars. The Germans were in the vanguard. In 1925, Tietz, and in 1926, Karstadt, created elaborate and successful variety store chains, appealing to both a working- and middle-class clientele. Between 1928 and 1932, department stores elsewhere in Europe (France, Belgium, Italy), often building on German expertise, developed similar chains, which helped them to fight against the world depression, and so did a few newcomers.²⁷ Department stores enjoyed renewed prosperity in the 1950s, lifted by the rising tide of post-war affluence, though they later faced decelerating growth, culminating in absolute decline. The causes of decline are, again, often broadly similar: the emergence of new retail formats with aggressive price strategies and leaner corporate models; re-structuring efforts that were sometimes ill-judged; and, most importantly, the fact that their ‘universal provider’ model was no longer relevant for an increasing proportion of merchandise and customers.²⁸

Perhaps the most important factor differentiating many European countries from the USA was the special social status of the independent shopkeeper. As Emanuela Scarpellini has noted, in Italy small shops were seen ‘more as a social stabilizer than an economic system’, with independent shopkeepers embodying specific cultural values and constituting a powerful political constituency.²⁹ A restrictive shop licensing system, introduced during the Fascist era (originally with the intention of modernising the retail sector), was strongly supported by small retailers and their trade associations as a means to protect them from competition, especially from larger firms and new retail formats. This protective stance out-lived Fascism, casting a long shadow into Italy’s post-1945 retail history.³⁰ Thus, both new retail formats such as the supermarket and large retail organisations per se faced formidable entry barriers, imposed by public authorities that deemed the economic benefits of retail modernisation to be outweighed by their political and social costs. Substantial barriers to new retail entrants were also present in many other European nations. For example, in the Netherlands, prospective retailers had to prove their professional qualifications for operating a retail establishment, while Denmark and Luxembourg had direct restrictions on multiple store chains.³¹

Internationalisation

Prior to the 1980s, European retailing was much less strongly impacted by foreign direct investment than was the case for manufacturing. This partly reflects the legal barriers described above – though this pattern is also evident for inward-investment into Britain, which had very few such barriers.³² However, internationalisation has nevertheless been an important channel of knowledge diffusion, and European retailers, like their counterparts in America and Asia, have played an important role in this process.³³ Retailers’ role in introducing novel and exotic produce to their customers is well known, with both small shops and department stores having diffused consumer goods produced overseas, particularly from the former colonies. But recent research has also underlined the outward expansion of European department stores and retail chains, starting before 1914 with the German company Tietz and not limiting itself to colonial empires or even to Europe (for example Harrods’ store in Buenos Aires).³⁴ They generally took advantage of economies of scale and scope, as well as of the managerial resources of their controlling families. For example, the Dutch clothing retailer C&A opened subsidiaries in Germany, then in Britain, finally expanding to the United States after the Second World War, and today operates in several countries.³⁵

Europe has also been an important host for retail foreign direct investment from outside the continent, principally from North America. Success has varied greatly; for example, Woolworth’s UK subsidiary, founded in 1909, grew to be Britain’s largest retailer from the 1930s to the late 1960s and developed its own subsidiaries in several Commonwealth countries. However, US Woolworth’s 1927 German expansion proved much more problematic. German restrictions on new store development, introduced in 1932, were intensified during the Nazi era. Moreover, Woolworth’s German stores became targets for boycotts, protests and acts of violence during the 1930s (precipitated by the company bowing to public pressure not to stock German goods in its US stores).³⁶

The post-war era, after the return to normalcy, saw the beginning of another period of internationalisation. The Belgian multiple food retailer Delhaize, founded in 1867, opened subsidiaries abroad, acquiring companies in the US and, later, in Europe and Indonesia.³⁷ The new French supermarket chain Promodès, created in 1961, after establishing a full network in France, expanded into Europe, notably in Germany, and overseas.³⁸ Moreover, in the last 30 years, with the lowering of tariffs and the information revolution, hypermarkets and chains, especially from Germany and France, have tried to establish themselves in more foreign markets. For example, Carrefour was among the first foreign stores to get a foothold in the Chinese market.

Yet increasing globalisation was not an automatic guarantee of success. There have been spectacular exits. The same Carrefour has had to withdraw from Japan, Singapore, Indonesia and Colombia. Such contrasting episodes have shown that in order to maintain their presence and profitability, international retailers need to be able to meet the level of competition in foreign markets, including from domestic incumbents, to take into account the specific demands and expectations of host countries, and to hybridise their business models and practices.³⁹ The dangers of assuming that a business model that proved successful in the home nation can be simply transplanted overseas are illustrated by the failure of Marks & Spencer’s internationalisation, which culminated in a March 2001 decision to close most of its continental European stores (while also divesting from its American and Japanese retail interests). Thirty years of international retailing activities had failed to produce significant profits, partly owing to the fact that the distinctive policies underpinning its ‘value for money’ USP – ‘Buy British’, a refusal to take credit cards, resisting smaller out-of-town stores and even the St Michael brand – were not well understood by consumers in the overseas markets they entered (a problem compounded by another of their money-saving policies, an unwillingness to invest in advertising and marketing). ⁴⁰

The most recent wave of internationalisation, for specialty retail, has come from department stores of smaller European countries specialising in low-priced, affordable quality clothing: H&M in Sweden, launched in 1947, and Zara in Spain, founded in 1975.⁴¹ H&M became the world’s No. 2 fashion chain, by sales and by stores. It went international in 1964 and had expanded to a dozen European countries by 2000. As of 2018, it was operating some 4,000 stores on six continents and in 61 markets. Zara started its international expansion in 1988. Thirty years later, there were over 6,500 Zara stores located across 88 countries. While these two competitors rely on the same strategy of fast fashion, there is a major difference between them. H&M does not own any factories and has all its products made in Asia at high volumes. But such supply chains may lack reactivity, while their products become commonplace and are at the mercy of even cheaper producers. And, since the 2000s, there is one firm selling to both European and American markets (thanks to its redemption by Associated British Foods, and the ensuing financing of its growth), the Irish firm Primark, founded in 1969 and relying mainly on Asian and Turkish sourced goods.⁴² However, Zara is more reactive than H&M or Primark, because it is itself a producer, and some of its factories are still relatively close – in Spain and Portugal. This close link between production and stores becomes an asset in that Zara has greater flexibility to adapt its supply-chain model when market conditions demand this.

Exploring the process of European retail change: The six articles of this special issue

The following six articles explore a range of topics relevant to the issues discussed above, including technological change (broadly defined) and its diffusion and adaptation; retail strategy; policy tensions between the economic benefits of new retail formats and their negative social impacts; and alternatives to mainstream ‘capitalist’ retail channels. ‘Soft technological innovation’, in the form of systems to monitor and manage hundreds of geographically dispersed points of sale, forms the topic of the next article. One of the essential requirements for large-scale retailing was the growth of what are now called ‘business performance management systems’ to enable firms to monitor, manage and control their expanding operations. Andrew Hull explores their development through a study of two of Britain’s largest retailers – each operating more than a thousand points of sale by the late 1930s – Boots and W.H. Smith. He notes the importance of methods developed in the USA, through a partnership between department store accountants and American business academics and management engineers, in influencing inter-war British practice. These diffused to Britain through a variety of channels, including foreign direct investment (Woolworth’s expansion into the UK and the 1920 takeover of Boots by United Drug Co.); entrepreneur migration (Selfridges); overseas study trips by UK retailers; and international retail research collaborations and bench-marking exercises.

One of Hull’s most interesting findings is that the formal processes stressed in the retail accounting literature were only half of the story, operating in conjunction with informal processes of culture, behaviours and symbolic incentives (such as Boots’ ‘Salesmanship Roll of Honour’), which together created a whole that was greater than the sum of its parts. Informal processes could enable even a company such as W.H. Smith, which ran a huge store empire with under-developed and poorly coordinated formal systems, to retain its position as the leading firm in its specific retail sector. Informal systems are more difficult for historians to map and evaluate, but this does not imply that they are not essential to effective and efficient operation.

In his 2018 PhD thesis at University Paris-Nanterre: ‘From Customer to Consumer: Casino, a French Food Chain Store (1898-1960) (translation of the French title)’, Olivier Londeix explores another area of retail strategy that blended pecuniary and symbolic incentives with the aim of an outcome that was greater than the sum of its parts: the generation of customer ‘loyalty’ through ‘gifts’, or ‘bonuses’. The co-operatives had been early innovators in this area, offering a cash bonus (known in Britain as the ‘dividend’) to members, based on the value of their purchases. French food chains (pioneered in 1844 by Félix Potin, but emerging more generally in the closing decades of the 19th century) had to compete both with retailers offering cash bonus incentives and with the (arguably more powerful) loyalty strategy of independent grocery stores – the provision of credit to tide customers through periods of reduced income.

Londeix focuses on the use of the bonus by one leading French food chain, Casino, whose founder in 1898, Geoffroy Guichard, saw it as a means to improve the social status of retailers by fostering ‘reciprocal’ commercial relations. Casino issued bonus stamps, based on purchases, which were saved in coupon books and then redeemed for a wide variety of items displayed in their catalogue. This had a similar social function to the co-operative dividend, in that it allowed families to ‘save’ for items that could not be incorporated into the weekly working-class family budgeting cycle. This financial incentive was part of a broader strategy of developing trust relationships with customers, which included a friendly disposition by the sales staff, a generous attitude towards customers returning goods, and an emphasis on staff showing an interest in customers’ activities and welfare – ‘the gift of self’. However, such commercially motivated ‘altruism’ creates, at best, an ambiguous relationship between retailer and customer, and predictably, self-service stores offering the more transparent customer benefit of lower prices were enthusiastically embraced once they became accessible.

Most European nations were severely impacted by the Second World War and the austerity period that followed. Britain, nominally the principal West European ‘victor’ of the War, faced the most prolonged period of post-war austerity, struggling under a mountain of war-time debt managed by monetary authorities (the Treasury and Bank of England) that refused to countenance even a partial default, given the negative impact this would have on the reputation of sterling and the City of London.⁴³ Thus, in addition to formal food rationing, a variety of controls were used to restrict both household consumption and investment expenditure (including re-building). These continued after the period of formal rationing, slowing down the rate of redevelopment of British stores and shopping centres even into the 1960s.

Bethan Bide explores British fashion retailing in this era, examining the short- and long-term impacts of post-war austerity on the visual marketing of fashion in London’s West End. She finds that, rather than fossilising innovation (as implied in some histories of design and fashion, which largely ignore the period from 1939 to the 1951 Festival of Britain), austerity conditions forced retailers to experiment with new display techniques that were to have a longer-term impact in reviving London’s West End as a major fashion retail hub. Despite austerity, retailers were still able to access the latest American ideas by various methods, including specialist trade periodicals and, for the largest firms, research visits to the USA. Indeed, the new conditions appear to have greatly weakened London fashion retailers’ earlier resistance to American influences.

Paradoxically, the War had also, in some respects, increased continental European influences on British fashion retail. Bide notes that in 1937, the Reimann School of Art and Design opened in London’s Pimlico (close to the West End), having relocated from Berlin. The transfer of the fashion industries of Berlin and Austria to Britain via refugee entrepreneur migration during the late 1930s would also have boosted the influence of continental fashion ideas.⁴⁴ Indeed, even the USA benefited from European migrant entrepreneurship. For example, many of the leading post-war figures in US market, media and consumer research were Germans, Austrians or East Europeans (for example, Paul Lazarsfeld, Ernest Dichter, Hans Zeisel and Alfred Politz), many having fled during the Nazi era.⁴⁵

Especially in continental Europe, retailing has traditionally been subject to tight regulation, regarding not only the quality and reliability of the goods and services provided, but also firm entry, retail formats and competition. Yet controls can have unintended and sometimes perverse consequences, as shown by Adam Dewitte, Xavier Lecocq and Sebastian Billows’s study of French food retail competition and resale price maintenance since 1949. French governments appreciated the efficiency advantages of larger firms and new retail formats, but faced a well-organised and particularly vocal (sometimes violent) small retailer lobby, together with pressure from manufacturers who saw control over their brands gradually slipping further down the value chain into the hands of an increasingly oligopolistic retail sector.

Major French retailers are shown to have consistently responded entrepreneurially to the regulations, turning them into business opportunities. For example, the 1973 Royer Act met small retailers’ concerns by blocking the development of new stores. However, this led to a competitive corporate takeover scramble – both to increase market share (which was key to negotiating preferential terms with suppliers) and to avoid becoming a target for corporate raiders. This culminated in a food-retailing structure that bore more resemblance to that of Britain than to most European countries, with supermarkets and hypermarkets constituting the dominant retail format and the two largest retailers, Carrefour and E. Leclerc, each having a current market share of around 20 per cent. However, while France’s unusually heavy regulation achieved a market structure that was oddly similar to Britain’s unusually lightly regulated retail sector, France’s model reduced downward pressure on retail prices, which was good news for suppliers, but had negative consumer welfare impacts (particularly on lower-income groups, for whom food weighs heavily in family budgets).

In a complementary article, Tristan Jacques traces the emergence of the French State’s conception of ‘modern retail’ from 1945 to 1973, whereby specific stores and retail formats were implicitly privileged. However, through a systematic investigation of government intervention in retail affairs, he questions the alleged victory of small retailers in 1973 and shows the actual dynamics behind retail-related decisions at the national level and the existence of a defined public policy. He highlights the influence of the overall national context (inflation, social upheaval) and the interdependence of retail policy with other government policies (fiscal policies, urban planning, etc.). Jacques also emphasises the role of large retailer lobbies in policy-making, acting as a counterweight to small retailers’ concerns, notably in facilitating the construction of supermarkets and in banning discriminatory sales practices against discount stores.

Until the 1960s, the Belgian retail sector had a reputation of being very traditional, overcrowded and badly organised. In contemporary literature, the slow modernisation of the country’s distribution sector was time and again connected to the ‘frustrating and evasive tactics’ of small retailers and the eagerness of policy makers to protect these protagonists of the independent middle class. The landscape of distribution became a bipolar one, pitching small against big, family enterprise against capitalistic business.

Ideology and party-political mobilisation strategies played a crucial part in the development of Belgian retail policy. The pillarised nature of Belgian politics and society should be mentioned too.⁴⁶ Peter Heyrman shows indeed that the Belgian padlock law (1936) restricted the expansion of department stores and variety stores. But in January 1961, after a ‘cooling down period’, during which the main department stores refrained from opening shops, and government introduced several compensatory measures for independent shopkeepers, all legal restrictions were dropped. In the same year, the Belgian department store GB, which had anticipated the new legislation, became, as noted above, the first in Europe to open a hypermarket.⁴⁷ Balancing free-market forces and social responsibility was not a purely Belgian policy debate. All over the continent, the fight between large and small retail became a symbolic issue, powered by the modernity–tradition dichotomy, that accounts for the peculiarities of European national retail regulation.

The conditions that enabled the longevity of some consumer co-ops are evidenced by Anitra Komulainen and Saikari Sirtala. They study the trajectory of the biggest Finnish regional co-op, Elanto, from 1905 to 2015, and compare it to its British counterparts, thus illuminating the resilience of co-operatives in European retail. They show that Elanto, prompted by the democratic ideology of the co-op movement, became a retail pioneer so as to sell good-quality goods at low prices. However, the co-op then lost this competitive edge for almost 30 years (1970–2000) but, after a much delayed merger with another large co-op, managed to discover a new version of democracy, adapted to 21st-century society. The authors argue that factors such as the degree of centralisation, the amount of capital, succession or filling a market gap, do not alone explain the successes and failures of co-ops. Therefore, they consider the initial success, the decline and the revival in terms of value innovation, a strategy that creates powerful leaps in value for both the firm and its clients and reduces costs. We may add that, as recent research on the Swedish department store H&M has shown,⁴⁸ democratic values are not the exclusive privilege of the co-ops and contribute to the competitive advantages of other retailers, a further example being Britain’s John Lewis Partnership department store and supermarket (Waitrose) chain.

Concluding remarks

The continuous reshaping of European retail has been a powerful agent for the transformation of urban economies and urban life, as longitudinal studies have shown. This is certainly true of suburbs, where retail has become bipolarised between supermarkets and ethnic shops. It also applies to city centres. For instance, the development of the large department store Alle Cità d’Italia (founded in 1865 and, in 1917, renamed La Rinascente, under new ownership) contributed to make the city of Milan the engine of Italy’s modernisation regarding large retail, company organisation, design and fashion.⁴⁹ And local retail specialisations may change radically: according to research from the perspective of microhistory, in Paris a street that in 1860 was devoted to food shops has become since the 1960s a privileged area where women buy clothes and shoes.⁵⁰

Small shopkeepers are always in the background: providing proximity services, offering jobs to immigrants as in the earlier eras, catering for ethnic consumers and lobbying for political regulation. Yet, just as the economic balance of power has shifted from small to large shopkeepers over time, so has the political balance of power (especially from a national government perspective), though to varying degrees in different countries. This variability reflects a variety of economic, social and political factors, including ‘varieties of capitalism’ and the value placed on the small business class by the political elite.

Over the 20th century, new retail formats have ‘transformed the expected tasks and behaviours carried out by customers’. They ‘connected the store and its customers to wider-reaching networks of supply promoting new modes of consumption’.⁵¹ Thus, it can be said that they did not put the customer to work free of charge for companies, contrary to what a number of authors have argued. What they contributed to was ‘making a new social being, the consumer, to emerge’.⁵² It is therefore important for historians and other social scientists to understand how men and women, buying or selling, went about assigning ‘value’ to the different goods on offer.⁵³

Consumers were confronted by a double diversification of retail during the 20th century. The general merchandisers came to include department stores, general merchandise retail chains, variety stores, food supermarkets and convenience stores (from which the German low-cost model (Lidl, Aldi) emerged in 1948). Meanwhile, the specialists, of which furniture stores were an early cornerstone, underwent transformation (or disappearance) after the Second World War,⁵⁴ into apparel specialty stores, ‘pharmacies’ then ‘drugstores’, plus other specialty retailers as diverse as cultural goods (music, books and similar), consumer electronics, do it yourself, gardening and sporting goods.⁵⁵ These two trends highlight the complex social, technical and retailing environment factors that structure and delimit consumer freedom in the marketplace.

Another major change was the creation of group purchasing organisations (hereafter GPOs) by large retailers, first at the national level, then at the European level. At the national level, GPOs aim at an ‘increased power in terms of both price and services’ by combining their members’ orders to increase their bargaining leverage with suppliers. In some cases, as stressed by Jean-Claude Daumas, the GPO can perform different functions: product selection, price and quantity organisation, storage and supply management. The establishment of Paridoc, the first French GPO, in 1930, led each department store ‘either to create its own GPO or to join an existing organisation. The concentration of retailing led to a concentration of supplies: today in France, five GPOs account for about 80 per cent of consumer product purchases.’⁵⁶

At the European level, the formation of the General Agreement on Tariffs and Trade in 1946 led to closer ties between major European retailers. The initiative was taken by Marks & Spencer in 1949 and brought about bilateral agreements. A further step was the creation, in 1953, of a trade association: the Académie Commerciale Internationale. It included continental department stores of nine different countries, along with intermediaries in Spain, Italy, the UK, the US and Japan. Its members shared information about suppliers, obtained better sales conditions or exclusive rights and were free to organise joint purchasing offices abroad.⁵⁷ At the end of the century, a number of GPOs operated at the European level. The European leader of retailing groups’ GPOs is European Marketing Distribution (EMD), an ‘associated group of independent trading companies’ founded in 1989 with the aim of strengthening the position of small and medium-sized businesses against chain stores and retail groups. But most of the other 15 largest GPOs are company-specific. GPOs have been a major source of the growing strength of general merchandisers over agricultural and industrial suppliers, which has brought about major crises between retailers and their suppliers since the 1980s. These GPOs have added strength to the role of major European retailers as forces of globalisation, a longstanding role that deserves more recognition in the history of distribution (Table 2).

Table 2. Largest European purchasing organisations.

Market share (%)	Purchasing organisation	Sales (bn€)
11.7	EMD	131.7
8.9	Coopernic	100
7.3	Carrefour Europe	82.8
7.1	AMS Sourcing	80.1
7.1	Alidis/Agenor	79.8
5.9	Tesco	66.1
5.7	Metro AG	64.3
4.6	Schwarz Group	51.9
3.5	Auchan	39.3
3.4	Aldi	38.7
2.6	Groupe Casino	28.7
2.5	Sainsbury’s	28.6
2.5	Ahold	27.7
2.4	Asda	27.0
1.7	Morrisons	19.3
76.9	Top 15	865.9
23.1	Other trade organisations	260.7
100	Total Europe	1126.6

Source: European Marketing Distribution, ‘Les plus grandes supercentrales européennes,’ Paris, 2006.

In common with the special issue articles, our discussion does not go beyond the end of the last century. We are currently living through a fascinating era of disruptive technological change in retailing, as the diffusion of online retail through Europe gathers momentum. Both the phenomenon of ‘retail apocalypse’, as it has been recently dubbed in the US, and the ways in which retailers have addressed, and continue to address, this challenge, are active and growing areas of retail scholarship. ‘But that’s another story’.

There are, of course, also many exciting and important areas for new research on 20th-century European retailing. One relatively neglected area is the development of retailing in Eastern Europe, during the pre-1939, Cold War and transition eras. The chasm that separated both the availability of consumer goods and their presentation to customers on each side of the ‘iron curtain’, sympathetically captured in the 2003 German tragicomedy film Good By Lenin!, was capitalised on by western retailers and shopping mall developers after the fall of the Berlin Wall. This brought about a faster, and perhaps more brutal, transformation of the Eastern European retail and urban environment than any West European country had experienced.

Another relatively neglected area is the use of urban space by retailers and retail’s impact on the urban environment. Stores have had major impacts on cityscapes, with palatial department stores, for example, often becoming major landmarks. Shop windows, billboard posters, and advertising on the sides of delivery vans have also contributed to the urban visual environment (a topic explored in Bethan Bide’s article in this issue).⁵⁸ Other areas deserving further research include the intense and multifarious relations between retailers and media organisations; various aspects of marketing – including non-price segmentation (by age, use, and lifestyle); and the major and still neglected area of the growing control retailers have exercised over supply-chain integration, which, in some instances, has relegated suppliers to the status of mere contractors (a topic addressed by Adam Dewitte, Xavier Lecocq and Sebastian Billows, in this issue).

A final area for future research involves the consumer’s experience. The widespread public interest aroused by the collapse of iconic retailers such as Woolworth’s is testament to the fact that some retail institutions have a social role that transcends price, quality or range of goods on offer. The value placed on specific retailers by their customers was no doubt greater during the first half of the 20th century, as new chains using semi-self-service methods played an important role as social centres for a working-class population denied the ‘freedom to browse’ in many traditional shops. Such retailers also offered a range of other services that were valuable to a less affluent population. For example, in Britain, Woolworth’s, Marks & Spencer and Boots all provided inexpensive cafes above their larger stores; Boots ran lending libraries and had a nurse available in their large stores to give free medical advice; and Montague Burton developed billiard halls above his men’s outwear stores.⁵⁹ Meanwhile, co-operatives across Europe offered not only well-priced goods and cash bonuses, but also membership of an organisation that promised to counter the exploitative nature of capitalist retailing.⁶⁰ While historical research on the demand side of retailing is more difficult than that for the supply side, it is, nevertheless, an area for potentially important and fruitful research.

Notes

Notes on contributors

Peter Scott is professor of international business history at the Henley Business School, University of Reading. He has published extensively on retailing, consumer durables production and marketing, housing, and household expenditure. His most recent monograph, The Market Makers: Creating Mass Markets for Consumer Durables in Inter-war Britain, was published by Oxford University Press in 2017.

Patrick Fridenson is professor of international business history at the Ecole des Hautes Etudes en Sciences Sociales in Paris. He has published on the automobile, aircraft and electronics industries, on retailing, on the history of management education, and on Japan. He is the co-author with Philip Scranton of Reimagining business history, Baltimore, Johns Hopkins University Press, 2013. He is the editor of the journal Entreprises et Histoire.

This special issue was inspired by a conference held at Université Paris-Nanterre, Paris in September 2015, organised by Tristan Jacques and Thomas R. Buckley. We thank Jenny Evans, Sabine Effosse, Olivier Londeix, Michel Margairaz, Fredrik Sandgren, James T. Walker, as well as the contributors to this special issue, for their support and participation in the 2015 conference. Thanks are also due to IDHES, Université Paris-Nanterre, Université Paris I Panthéon-Sorbonne, and the University of Reading's Henley Business School, for their generous financial support of the conference.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Grandclément, ‘Le libre-service’; Cochoy, On the Origins of Self-Service; Spellman, Cornering the Market.

2. For example, De Grazia, Irresistible Empire.

3. See Scott and Walker, ‘British “Failure”’.

4. De Grazia, Irresistible Empire, 395; Scarpellini, ‘Supermarkets Italiani’.

5. Wright, ‘Brief Marketing History,’ 367–376.

6. Grimmeau, ‘A Forgotten Anniversary’; Heyrman, ‘Rationalization of Belgian distribution’.

7. Logemann, ‘Americanization Through Credit?’ 532.

8. Levine, ‘Credit Where It Is Due,’ 95–97.

9. Albert, ‘Working-Class Consumer Credit,’ 731–763.

10. For the USA, see Logemann, ‘Americanization through credit?’ 535; For the UK, see Scott, Market Makers, 279–81.

11. Centre for Business History, Stockholm, Electrolux archive, F1i: il, unsigned note entitled ‘Business,’ 19th October 1929.

12. Sources: Hoover, Table 1, Electrolux, Centre for Business History, Stockholm, Electrolux archive, E1 f:1, statement on Electrolux Corporation of New York, initialled E.S., 8th October 1935, accompanying a letter from (signature illegible) Higgson & Co., to H.G. Faulkner.

13. Scott, ‘Organizational Salesman.’.

14. Langer, ‘How West German Retailers Learned,’ 71.

15. Langer, ‘How West German Retailers Learned’.

16. Ibid., 81–3; Sandgren, ‘From ‘Peculiar Stores’ to ‘A New Way of Thinking’,’ 734–6; Shaw, Curth, and Alexander, ‘Selling Self-service and the Supermarket.’ 568–82; Hilson, Neunsinger and Patmore (eds.), Global History of Consumer Co-operation; Battilani and Schröter (eds.), Cooperative Business Movement.

17. Logemann, ‘Beyond Self-service,’ 89–90.

18. Grimmeau, ‘A Forgotten Anniversary’.

19. Daumas, ‘Mass Selling,’ 66.

20. Girschik, Ritschl, and Welskopp, Der Migros-Kosmos.

21. Girschik, ‘Machine-readable codes,’ 63.

22. Girschik, Als die Kassen lesen lernten.

23. Collantes, ‘Food Chains and the Retail Revolution, 1057.

24. Jefferys and Knee, Retailing in Europe, 65–66.

25. Beau, Un siècle d’emplois précaires; Jornod, ‘La conquête des clients.’.

26. Stobart, ‘Cathedrals of Consumption?’, Howard, From Main Street to Mall.

27. Meuleau, ‘From Inheritors to Managers,’ 137; Morris, ‘Contesting Retail Space in Italy;’ Jaumain, ‘Heurs et malheurs des grands magasins bruxellois’.

28. Jefferys and Knee, Retailing in Europe, 59–61; Banken, ‘Everything that Exists in Capitalism’.

29. Scarpellini, ‘The Long Way to the Supermarket,’ 55.

30. Morris, ‘Fascist “disciplining” of the Italian retail sector’.

31. Jefferys and Knee, Retailing in Europe, 28 & 57.

32. Godley and Fletcher, ‘Foreign Entry into British Retailing’.

33. Sternquist and Goldsmith, International Retailing.

34. Haupt, ‘Small Shops and Department Stores,’ 193.

35. Spoerer, C&A. A Family Business.

36. Hawkins, ‘Influence of American Retailing Innovation,’ 124; Pitrone, F. W. Woolworth and the American Five and Dime, 93.

37. Dick and Merrett (eds.), Internationalisation Strategies of Small-country Firms, pp. 181–182.

38. Schuller, ‘Promodès en Allemagne.’

39. Trentmann, Empire of Things, 371.

40. Burt, Mellahi, Jackson, and Sparks, ‘Retail Internationalisation and Retail Failure.’

41. Giertz-Mårtenson, ‘H&M’; Fraiman and Singh, ‘“Zara”, Case Study.’

42. Blaszczyk and Pouillard, ‘Fashion as Enterprise,’ 20–21.

43. Newton, ‘Keynesianism’.

44. See Pollins, ‘German Jews in British Industry,’ 375.

45. Schwarzkopf, ‘Managing the Unmanageable,’ 165–67.

46. Vosch, ‘Pillarisation and Democracy’.

47. Grimmeau, ‘A Forgotten Anniversary.’

48. Giertz-Mårtenson, ‘H&M: How Swedish.’

49. Amatori, Proprietà e direzione.

50. Pick, Du village de Passy.

51. Fridenson, ‘Du commerce à la distribution,’ 8 & 10.

52. Grandclément, ‘Le libre-service à ses origines.’

53. Callon, L’emprise des marchés. Entwistle,‘ The Cultural Economy’.

54. Verheyde, ‘Au bonheur des meubles.’

55. Teupe, Die Schaffung eines Marktes; Projahn, ‘Significance of the Past;’ Gaillard, ‘Les magasins de sport emblèmes du commerce montagnard,’ 25–29.

56. Daumas, ‘Mass Selling,’ 62.

57. Brachet Champsaur, ‘Buying Abroad,’ 125–27.

58. See also McFall, ‘The Language of the Walls’.

59. Scott and Walker, ‘Large-Scale Retailing,’ 116–19.

60. See, for example, Hilson, Neunsinger and Patmore (eds.), A Global History of Consumer Co-operation.