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Show Chain Store Growth Newspaper Advertising fewer ruinous surpluses. These men, then, are spscialists in the field cf distribution a field heretofore here-tofore unexplored by specialists and a field which lagged far behind be-hind the productive system, of the country. By special study and ap- plication these men have learned how to cut down the cost of marketing farm products and to pass on to farmer and consumer the benefits of their knowledge of I distribution. I Business needs specialists to at-jtack at-jtack scientifically the many pro-jblems pro-jblems ramaining unsolved today. Recently we saw the confusion resulting re-sulting in a convention of business men in Washington, few of whom offered ideas acceptable to the government as a solution of their problems. Even the country newspaperman has argued that he has had to be a specialist in too many fields. He had to be an expert in everything from panitoring to editorializing, as well as society reporting and (the conducting of his own public relations department. When all business becomes as well specialized as the business of operating chain stores is specialized special-ized today, I believe the worries of the country editor will be somewhat some-what minimized. Each store will plan a year ahead on its advertising adver-tising budget. Every editor remembers remem-bers when the local' automobile merchant handled his own advertising. adver-tising. It was always a hit and miss schedule, and you could never plan a week ahead for the space or copy. That has all changed chang-ed since specialists have been employed em-ployed to prepare and handle the placing of the schedules on a national na-tional basis. Regardless of whether it is raining or snowing on Thursday Thurs-day the national ad goes in the paper. worth more than hit and miss advertising run now and then in the hope of getting some extra business. We endeavor to educate the reader that our advertisement will always be found in a newspaper news-paper on a certain specific day and not on other days." And is this not what the country editoi has. endeavored to drive home to his list of unsteady advertisers? Thus, the time has long since passed when editors have to waste their own time or employ special ad men to "sell' the chain store on newspaper advertising. On Tuesday Tu-esday or Wednesday you call at the chain store for your layout' which has already been carefully i prepared by specialists hired and paid by the chain store not by the newspaper itself. With this type of cooperation the newspaper like the manufacturer who sells to the chain, can plan its output to a certain extent. The newspa-j perman could plan almost to thej column for his succeeding issues if every merchant had the chain store, and with few exceptions is the newspaper ever compeled to hold up the presses waiting chain store copy. I don't mean to say that all chain stores in your town give you an ad every week, or that all cooperate co-operate as they probably should. But because one or two chain stores do not advertise with you I does not give you logical cause to indict the entire chain system. It was the great statesman Glad-I stone who .told the British parliament parlia-ment after a colleague had been (Prepared for delivery to Colorado Press Association, March 12, 1938) By HAROLD H. SMITH Since it is a known fact we have government figures to substantiate sub-stantiate the statement that the ' growth of chain stores has been coincidental with the increase of t their advertising, we feel the chain stores are more or less the child of the newspapers. Why do we say they are a child of the newspapers any more than a ' child of handbills, billboards radio or any other form of advertising? advertis-ing? Because while the chain istores have led the field in advertising ad-vertising they have devoted 73.2 per cent of their total advertising advertis-ing budget to the newspapers. Let j us quote a statement from the Federal Trade commission report to the V. S. Senate in 1934: fc "Chain store advertising has frequently been cited as an important im-portant factor in the growth of such companies. Fifteen hundred and six chain companies reporting report-ing total advertising expenditures in 1928 spent $65,589,069 for all forms, averaging $43,552 per chain j or 1.52 per cent of sales.' Your Colorado chain food store was far above the average in newspaper advertising in 1937. 1 More than double the amount 6pent by the average chain for all forms of advertising went into Colorado newspapers. Safeway of Ccta-ado spent a 'total of $91,244.79 with the newspapers. It would seem from these figures that the ' chain stores : of Colorado are A happy editorial change will come about when the age of specialization is developed to include in-clude all stores. A special ad man will write each store's copy, and he will not have to leave his copy a hundred times to greet Mrs. Jones and sell her a can of beans. The copy for the ad and the proper pro-per mats will be submitted' several days before press day. The editor will be able to get his paper out at a certain hour for Mr. Hancock Han-cock of the Wjest Side Grocery won't run in at the last minute begging for space to advertise a truck load of spuds which he Just bought at a great bargain. Buying too, will be done on a( scientific basis by specialists in their field. Merchandising won't j be attempted by men who have failed as cafe operators, farmers or real estate brokers. Specializa-' tion is on the march, for too many successful business enterprises have seen what, -it has .done ..for them and too many failures have seen what lack of specialization has done for them-. , The chain stores have weathered the storms of recession after recession, re-cession, because every operation has been the result of conclusive study and test and research, Nothing No-thing is left to chance alone. WJhen new products are bought, their sale is not left to chance. The public is educated to the product. pro-duct. Bananas once thought harmful harm-ful are now running; over with vitamins necessary to health. Of course the manufacturer likes to deal with the chain store. Wouldn't you like to have a big organization organiza-tion handle your product and make it sell? Every item must pay its own rent or give way .to the product which is not a parasite. Recently at the conclusion of a farmer - consumer campaign on beans staged by the chain stores at the request of the fanners themselves we wired to five chain store districts for results. Immediately Immed-iately came back wires showing the amounts of beans sold thisi year and the percentages of in- crease over the same three-weeks period last year. Could you get such figures from a lot of stores you know? criticising the people of one of the dominions: "You can never indict a whole people." And I say to you newspapermen who try to be fair in your criticisms criti-cisms that you can never indict the whole chain system because it has one or two recalcitrant members. mem-bers. When the little wayside grocer gro-cer stays open all night and all day Sunday .to get the business of the stores who respect the rights of the working man I say you have no right to indict all independent merchants. You can never indict a whole system, because in that system sys-tem may be honest members and, members who are a credit to society in genera?. To attack the chain store system as a whole because you know of one or two instances not altogether ethical is to reason from a special case to a general rule and that is poor reasoning, the logican tells you. On the whole the newspapers are in a better position today because be-cause of chain store advertising and the education in that field which they have done in their communities. The chain store cooperates co-operates wjth the manufacturer by contracting for so much of his entire production throughout the year thus enabling the manufacturer manufac-turer to gauge his production and accordingly cooperate with his workers by giving them more steady employment. So does the chain store cooperate with the newspaper which enables the newspaper to cooperate with its staff. Recently a doll factory was reopened after several years of I forced closing because it could not induce its patrons to say how many dolls they would use. When a big 'chain company contracted for the I entire output of the factory, na-Iturally na-Iturally it reopened and gave em-jployment em-jployment steadily throughout the iyear. I Business must be operated today 'on a planned basis, and I believe 'chain stores are contrbuting their bit to this end. Planned economy seems to have been of recent I coinage but the mushroom growth of chain stores during . the past twenty five years has been largely because of the application of this somewhat friendly to the newspapers, newspa-pers, since the chain stores know the newspapers have been somewhat some-what responsible for their growth in volume. The chain stores use the newspapers because newspaper r advertising has proved to be the best and most economical form of business building ballyhoo. That friendship exists between the two .is not at all strange since each, has done so much for the other, j It is no secret either that chain, store advertising has done its bit' in increasing the advertising bud-, get of other merchants in towns and cities. This is partly the re-, silt of competition mostly the( result of becoming educated to the value of advertising. When my father ran newspa- , pers all over the state of Kansas, his papers were always in debt. No one believed in advertising. I eel I was fortunate to have lived 'ma day when even . the small in- dependent merchant who saw the big companies forging ahead usedj . their methods and began adver-j 1 Using. From 1919 to 1928 the per chain advertising expenditure in- creased from $32,000 to $43,000, or" . 1,094 per store. Wbuldnt it be nice if every store in your town spent $1,094 per year with you? j In one Colorado town in which j I operated a newspaper the chain, food store spent $988 with me and more than that with' the opposi-j tion paper. This figure does not, include several page and double page spreads during the year. The paper our family still operates in Colorado enjoys practically the same amount of business. This business pleases us immensely im-mensely for on Tuesday morning ' we always go to the chain store for our copy. It is laid out neatly. neat-ly. The items are always ready . and we can go back to the office and start the shop, to work in plenty of time on the ad. This gives us time to run back and t forth on Thursday afternoon to ' several other stores which have ' not decided just what to advertise if anything that week. '.' This government pamphlet I speak of has this to say along this verv line: "As amounts for lion dollars in one year? And why is it considered necessary to 'eliminate a business institution which has been the best supporter of the newspapers which in return re-turn have been the main reason why America is still a free country coun-try and still enjoying freedom of speech and freedom of the press? Therefore, I contend that pend-j tag congressional legislation aimed aim-ed at chain store annihilation is a direct threat at freedom of the' press. Take away the nswspapers' business and you take away their freedom. The best assurance of freedom of the press as well as freedom .t of speech is a prosperous prosper-ous press. Let the press of this country run down to a one-man shop and the urge to editorialize vigorously will come to an end. A discouraged editor one who sees no future for himself, or country-gives, country-gives, up hope loses the zest for I adventurous editorial service. His paper then becomes a nonentity, as the newspapers of Germany are . today a nonentity for anything any-thing but his majesty. From a selfish standpoint as well as from a standpoint of fairness fair-ness to the American consumer the remaining newspaper ot our family today is concerned over the impending threat against chain stores. Week after week we know what the chain store advertising will mean to our paper. We would hate to go back entirely to the week after week impotent prediction predic-tion of what our advertsing volume vol-ume would be without chain stores. We don't want . the chain . stores of our community eliminated. They have done too much for us.j They have increased our advertis-j tag among chains and independents. independ-ents. Why should we not fight for them while fighting for self preservation? pre-servation? The rate of increase of total advertising ad-vertising expenditure in 1922 over 1919 for chain stores was 140.1 per cent, according to the Federal advertising increased the need was Vseen to concentrate on the advertisement ad-vertisement itself. Specialists were retained to prepare the copy." f -j You got that last sentence didn't f you? Stores began hiring trained men to write their advertising !. copy. At last advertising in the Country paper was not done out of pity for the poor editor. "No matter how the advertising is handled these large companies ! 'generally plan they PLAN their advertising campaign with CARE and for considerable periods in ;idea known today as "planned j economy." j Chain stores to be sure, are specialists in an age of speciali-j zation. The butcher in the chain store understands his meats. He j knows the cuts. He is prepared in 'most instances to be of i service to the housewife who wants a special 'cut of meat but doesn't understand under-stand the job of cutting it prop-jerly. prop-jerly. The butcher knows his 'meats, but he is not a Bruce , Barton. In other words he is not !a trained advertising man. How-iever, How-iever, some one else in his organi- If chain stores have shown 'growth since 1919, the responsibility can be laid partly at the door of the newspaper. For chain store advertising ad-vertising plus chain store methods of specialization enabled the chain stores in 1929 to reach a volume of over ten billion dollars. The I figures of the U.S. Department of Commerce, as well as the results of surveys made by the Harvard Bureau of Business Research show that chain store prices have been from 10 per cent to 14 per cent lower. Take the figure 10 per cent. Then the American consumers in 1929 alone saved more than one billion dollars at the chain stores. The newspapers have been contributing con-tributing factors in this consumer saving, and this successful drive to raise the stardard of living. Advertising has shown the consumer con-sumer -where to buy more cheaply as well as where to buy goods "best by test." It is only natural that the newspapers should fight for their reciprocating friends. Annihilation of the chain stores would no doubt be a hard blow to the newspapers a blow beneath the belt. If bills now pending in Congress were al-, al-, lowed to pass the result surely i would be the passing of the chain stores. One big chain would be '! taxed under the pending bill som.i- I I thing like a half billion dollars a year. Wjhy it is deemed necessary .'to eliminate a business institution which saved the consumers a bil- Trade Commission. The rate of increase for 1925 over 1922 was 88.7 per cent, and 1928 over 1925 was 123.5 per cent. Does this not show the growing belief of chain stores in the newspapers long before the era of chain store persecution began? be-gan? At the same time the rate of Increase in chain store sales shows big gains. The date of increase in-crease in sales of 1922 oyer 1919 is quoted by the Federal Trade Commission as 112.8 per cent; 1925 over 1922, 72.9 per cent; 1928 over 1925, 109.2 per cent; and 1928 over 1922, 261.7 per cent. It is plain to be seen that chain store growth is somewhat the result of increasing increas-ing chain store advertising expenditures. expen-ditures. So. Mr. and Mrs. Newspaperman, I am certain of my belief that the growth of chain stores, the more prosperous era of newspapers through the increased voume of-advertising of-advertising by chains and independents inde-pendents are blessings to us all. If we must be selfish and I think we must, of course we must preserve pre-serve the source of our prosperity. If the newspapers are the foundation foun-dation of our country's freedom 'of speech and thought and I am sure they are the link in the chain holding freedom to the lives !of common men then I am sure the souires of their prosperity jmust not be destroyed unless by 'the natural process of free competition. j" ,, advance.' j In 1928 newspaper advertising, l according to the government I pamphlet, was used by 86.2 per cent of the chains. Pamphlets and ' dodgers were second, 24.9 per cent of the chains using these media. Billboard and outdoor advertising was used by 7.3 per cent. "On the basis of proportions of stores operated -newspaper advertising is I , again shown to be by far the most important form of advertising advertis-ing in each of the four years, 1919, 1922, 1925 and 1928, the pro- portion of stores belonging to chains using advertising ranging Irom 89.9 per cent in 1922 to 96.3 Per cent in 1928." An official of a large company f reported to the Federal Trade com-' com-' mission in these words, "" By our I n policy we advertise about twice ! " a week, as we regard a comparatively compara-tively small ad in a given newspaper news-paper on the same day of each ' week, every week in the year, zation IS a trained advertising man, and that Job is done by a man trained for that particular work. The chain store has progressed because it is an organization of ! specialists. Like the many parts 'of the clock, each contributes his work toward a common end. Besides Be-sides specialists in advertising the I chain store has specialists in buy-'ing buy-'ing meats, specialists in buying i fruit and vegetables specialists in 'buying canned goods, specialists in 'business administration, as well as 'specialists in employee education, j window trimming and store arrangement. ar-rangement. Recently the chain : stores have added specialists to aid iagriculutre in disposing of farm 'surpluses at prices above the cost !o production. It is the business ol these specialists to assist farm group In mapping campaigns foi consumer education working to-Iward to-Iward greater consumption and |
