Last week, Amazon acquired Whole Foods Market in a merger valued at $13.7 billion. And while consumers are already seeing lower prices at the organic chain (often referred to as Whole Paycheck), there’s much concern over the deal’s impact on jobs. As a Bloomberg headline put it, “Amazon Robots Poised to Revamp How Whole Foods Runs Warehouses.” At least the human cashiers will be spared—for now.
But the way we shop at the supermarket will change. As Joshua Rothman observes in the New Yorker, “Already, we spend less time shopping in the physical world. Now the disappearance of bookstores seems to be extending to retail stores more generally. Grocery stores, too, will soon be thinner on the ground.”
And the interiors of those thinned-out grocery stores may come to resemble Amazon Go, a convenience-store concept in Seattle, which features what the company calls “Just Walk Out” technology—a combination of systems that bill customers for what they take from the shelves, so they can shop and just leave without having to wait at a cash register.
If this is the supermarket of the near future, my mother, who still withdraws cash from a bank teller, is going to be in a lot of trouble.
But as food writer Michael Ruhlman points out in Grocery: The Buying and Selling of Food in America, the story of American supermarkets has been one of constant evolution. The first major national supermarket chain traced its origins back to 1869, just after the completion of the transcontinental railroad, when George Gilman formed the Great Atlantic & Pacific Tea Company. “Among the first of Gilman’s ingenious ideas,” writes Ruhlman, “was to offer an exclusive branded tea, a black tea with a green tea flavor called Thea-Nectar.” Green tea flavor? Plus ça change . . .
In time, the Great Atlantic & Pacific Tea Company broadened the kinds of goods that it sold, becoming a sort of general store, and expanded its roster of locations from New York to Chicago and beyond. But it was the inventions of the cardboard box and the cheap tin can that truly revolutionized the business. “These two innovations, which happened at roughly the same time,” says Ruhlman, “paved the way for the modern grocery store as we know it today, filled with brand names such as Campbell’s soup and Kellogg’s cereal.”
At first, “patrons of grocery stores were serviced by clerks; the customer read off a list of items and amounts and the grocer weighed them out and set them on the counter.” But in 1916 a new type of grocery store opened in Memphis, Tenn., called Piggly Wiggly, which introduced the concept of self-service. Customers could now do the shopping for themselves. (A few years ago I went to a pharmacy in Germany that still used the clerk system. My attempt to get toothpaste on my own was deeply frowned upon.)
By 1925, the Great Atlantic & Pacific Tea Company, which shortened its name to A&P, boasted sales exceeding $350 million—larger than any other retailer in the world at the time. It had more than 10,000 locations. It was, as Ruhlman suggests, the Walmart of its era. Its rivals included Grand Union (founded in 1872 as the Jones Brothers Tea Company) and Kroger (a Cincinnati-based chain started by grocer Barney Kroger in 1883). The largest supermarket chains, which could consolidate distribution out of centralized warehouses, had the clear advantage. The small family-owned grocery was ultimately doomed.
Larger outfits could also afford to offer more products, with the goal of creating one-stop shopping: The chains “are driven to do so because they want to appeal to everyone and be considered a place where you can get everything you need for daily living,” Ruhlman writes. Grocer Jeff Heinen of the Cleveland-based Heinen’s chain concedes the absurdity of having to carry each of the dozen varieties of Cheerios—but if his stores don’t carry them, “he knows . . . the shopper will go to a store that does.”
The result is an arms race: In 1975, supermarkets had fewer than 9,000 different items on the shelves. Today they carry between 40,000 and 50,000 products. Ruhlman lists the dizzying array of items he came across while bagging for a few days at Heinen’s: “Earth Balance Vegan Buttery Sticks, Organic Valley ghee, . . . Southwestern-style Egg Beaters, Silk cashew milk, Chameleon cold-brewed black coffee, flax milk, . . . bottles of probiotics that cost thirty dollars and up, some for oddly specific purposes . . . five different Temple Turmeric juices, Melissa’s Hollandaise Sauce in a microwavable pouch,” and on and on.
Ruhlman’s book is no mere history of the supermarket. Rather, he insists, it is “an expression of my own love, anger, opinions, and concerns over what is in them, how it got there, and what it all means.”
Anyone familiar with Michael Ruhlman, his popular books, and his blog is fully aware he is never lacking in love, anger, opinions, and concerns. Here he is explaining the illogic of certain low-fat products: “You can bet abundant sugar is the reason my Quaker low-fat granola bar was every bit as sweet and chewy as a Milky Way bar.” The granola bar has 7 grams of sugar, meaning: “The bar itself weighs 24 grams, so it’s nearly one-third sugar and two-thirds carbohydrates (17 grams according to the label).”
And this glorious rant regarding fat:
Here’s Ruhlman on the unbalanced diet:
Ruhlman defends pork cracklings, “composed almost entirely of protein, typically undergirded by a layer of fat. When these strips of pig skin are fried, the fat is rendered out and the connective tissue puffs, resulting in a delectable, crunchy, salty crackling. I therefore recommend them to you as a go-to ‘protein snack’ during your busy day.” Despite the popularity of flaxseed, an equally nutritious yet cheaper alternative is Planters Cocktail Peanuts. He’s skeptical about fish-oil pills—a $731 million industry. And don’t even get him started on SnackWell’s.
The recurring themes are those Ruhlman has stressed in his previous writings: Think for yourself. Apply common sense. Don’t let the government or the sugar lobby or the latest dieting fads dictate your eating habits. Have a balanced diet and cook more for yourself.
You can see where the author is headed—from a grocer’s point of view, the customer is always right, even if that customer wants SnackWell’s or Dora the Explorer fruit snacks. So if customers made better food choices, the supermarkets would, in turn, reflect that.
Indeed, there are a few glimmers of hope. Ruhlman quotes a cattle rancher who told food writer Michael Pollan the following for a 2002 New York Times Magazine article: “I’d love to give up hormones. . . . If the consumer said, ‘We don’t want hormones,’ we’d stop in a second. The cattle could get along better without them. But the market signal’s not there, and as long as my competitor is doing it, I’ve got to do it, too.” But the market began to change: Consumers (at least those who could afford it) started demanding things like grassfed beef free of hormones and antibiotics. The change happened so quickly that by the time Pollan adapted his article for his 2006 book The Omnivore’s Dilemma, he decided not to include the cattleman’s quotation.
But there are also signs pointing the other direction. Sure, flaxseed and kale chips are trendy—and Kombucha is, in fact, the Next Big Thing—but people are cooking less. The trend started after World War II, with more women joining the workforce. Who has the time?
To wit, how many people buy whole chickens anymore as opposed to conveniently packaged chicken parts? Or take heads of lettuce: According to Ruhlman, “sales in 2015 at Heinen’s for iceberg lettuce totaled $697,624; sales for bagged salads totaled $9,722,524.” The fastest-growing section of the supermarket is prepared foods. It’s a money loser but again, Ruhlman writes, “once a customer wants it, you’ve got to get it for them or risk losing all their business to a store that will carry the item.”
As it is, supermarkets are already losing business to Walmart. Annual sales for groceries alone for the Arkansas-based company and its Sam’s Club division come to over $200 billion. As Ruhlman points out, “the nation’s largest supermarket chain, Kroger, with its 2,600-odd stores, is a distant second with sales of roughly $110 billion.” Put in perspective, Walmart’s revenue just from groceries beats the total revenue of giant companies from other industries, like General Motors and AT&T. And to counter Amazon’s takeover of Whole Foods, Walmart has announced it is joining forces with Google—its products will now be available on the Internet giant’s website.
Meanwhile, even as some of the biggest names from a century ago have recently disappeared—the few remaining Grand Union and A&P locations were sold or rebranded during the last five years—other players have eagerly entered the arena. The German supermarket chain Aldi is planning a massive expansion across America, growing an audience with its steep discounts. The company is now working with Instacart to test delivery of groceries ordered online in Los Angeles, Dallas, and Atlanta. And an Aldi corporate cousin, the Trader Joe’s chain, continues to expand its own base with direct-from-suppliers, low-cost products that are much loved by its customers.
With these new competitors, plus Walmart and Amazon and technology-enabled services, the future for today’s U.S. grocery chains is unclear. But one possibility is that supermarkets will stop being super. If people choose to have a large fraction of their groceries delivered to their homes, stores may contract in size. That’s what Jeff Heinen predicts—that grocery stores will offer “prepared food and specialty products” but “everything else will be so commoditized that we won’t be able to compete from a price perspective.” From the consumer point of view, it would be like going “back to the old days, where it’s all specialty stores.” Your great-grandparents’ routine of visiting a separate butcher, baker, and greengrocer may seem quaint to you but might look familiar to your great-grandkids.
Victorino Matus is a contributing editor to The Weekly Standard and deputy editor of the Washington Free Beacon.
