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Show m , f I Mow Los Angeles Does It-Butcher's I ' ProfitsWhy You Get a China' I Dish with Tea and CoffeeThe H Poor Pay Highest PricesWhy? H How England's Poor Were Corn H ' pelled to Protect Themselves H :'M The Big Cost of Delivering H M Groceries and How to Cut it H j Downa Good Article from the H ,; Best Authority in the Land, v'J The Saturday Evening- Post of Philadelphia has an article in its issue of Feb. 18, 1911, on "The Retail Cost." The Post takes the H same stand that this paper does, as does also Secretary Wilson of H the agricultural department, namely, that people buy in too small H a' quantity to get the benefit of good prices. The Post says, "The poorer a man is the more he must pay, under the present rotail H system.'' M Continuing, the Post says: H THIRTY-EIGHT PER CENT GROSS PROFIT. H There is the advantage of thoroughly organized business or even, if you will permit me to say, of monopolistic business. So far, H the beef has been in the hands of the railroads and of the packers; H and there is no lost motion, no waste effort. H Let us see what happens after the beef gets into the hands of H unorganized and thoroughly competitive business namely, of the M retail trade. M Rather .over a year ago, when prices were mueh the same as at M present, the Department of Agriculture made a special investiga- M tion of the retail trade in meats. Fifty typical cities large, small H and of medium size in all parts of the country were selected. In H each of these cities inspectors of the Bureau of Animal Industry got Hr the wholesale price that the butcher paid for his meats when he H bought it, as a dressed whole carcass or half carcass, at the packer's M local warehouse. Then they got the retail price of all the cuts into H which the butcher divided the carcass when he sold it for example: H - so many pounds of chuck at thirteen cents ; so many of flank at ten M cents; so many of plate and neck at nine cents; so many of rib at H sixteen, cents ; so many of round at fifteen cents ; so many of sirloin M at eighteen cents; so many of suet at three cents; so many of bones M where the butcher sold the bones at two-fifths of a cent a pound. H Thus they-accounted for the whole carcass, or half carcass; for M after the meat leaves the packer as dressed beef there is scarcely any M waste. Obviously, by adding together the retail price received for M all the various cuts and comparing that with the wholesale price of H the carcass the total number of pounds of meat in both cases being L. the same it was possible to tell exactly how much was added to H the price of the meat from the time it left the packer's warehouse H until it reached the consumer in other words, how much was added Mj to the price by the retail process. H They found that hi all the cities, on an average, the retailers M added thirty-eight cents to each dollar's worth of meat; in quite a M number of smaller cities they added full fifty per cent to the price; M in eleven cities they added more than fifty per cent. H The above statement is not this paper's mere guess, but is made H up of facts as proved by 60 cities in the United Statees, both large H and small, and as the Ogden butchers' prices are not less than the H average prices outside of Ogden. we take it that the Ogden butcher H is not complaining on 38 per cent profit, even if he must pay his, B expenses out of the 38 per cent profit. H DEFENSE OF THE PACKERS. H "Consider that for a moment. The steer was bred, we will say, H in Texas and kept there for two years. It was shipped north-to a Hj feeding farm, where it "was kept for six months and where it ate Hj sixty bushels or so of sixty-cent corn, a ton of clover or alfalfa hay H and some trimmings. It was shipped to Chicago, slaughtered and H dressed; and there the packer took his profit out of it. The dressed Ml beef was then shipped to Pennsylvania and handed over to the local H butcher. And the total cost of all that including freight charges H! and the packer's profit that you hear so much about was only HJ seven and a half cents a pound. The butcher, that very day or the H next day, cut the carcass into steaks, roasts, and so forth, which he j delivered at your door, four or five blocks away; and the cost of 1 that was nearly four cents a pound, or rather over half as much 1 as the cost of all that had gone before." H Now, Mr. Butcher, in Ogden, the above statement comes from H the records of the Agricultural department. Don't you think even 1 your prices are a little high during these days of high prices? H Continuing on this same line, The Post and the government ex- B perts take up other matters, as follows: H PROFITS ON TEA AND COFFEE. H "The commission found that, as a rule, the retail cost increased H as the quantity involved in the retail sale diminished. When the H Consumer bought a barrel of apples, the producer received two-thirds H of the price paid; but when the consumer bought a bushel of apples H the producer received only a little more than half of the price paid, j On strawberries by the crate the producer received seventy-five per H cent of the retail price; on strawberries by the quart, only forty H nine per cent of the price paid. On onions by the peck the farmer 1 received less than a third of the retail price; on onions by the barrel H he received nearly sixty per cent. A like difference was found as H to other articles. The habit of buying in very small quantities may H suit a person's convenience, but it is undoubtedly expensive. H' "There is a good deal of Java and Mocha coffee on the market, H but nearly all of it comes from Brazil. Of all the coffee imported into H the United States last year only a tenth of one per cent came from H Aden, where the Mocha berry is supposed to be grown, and only a H little over one per cent from the East Indies, where Java is presumed M to originate. Over ninety-seven per cent of all the coffee, in fact, H comes from South America. Central America and Mexico but main- H ly from Brazil. The actual import value of this ninety seven per B cent of our coffee was a little under eight cents a pound last year M and the ocean freight rate from Rio Janeiro is one-quarter of a cent B a pound. For this coffee the consumer pays all the way from twenty M to thirty-five cents a pound. Merely to hand a package of coffee from the grocer's wagon in the alley to the kitchen door costs as H much as to carry the same coffee from Brazil to New York. The M average import value of all the tea brought into the country is six- H) K" teen cents a pound; the retail price is forty or fifty cents and upward. up-ward. "Other artioles that have been investigated and have shown an excessive retail cost might be added to this list; and there are, of course, a great many articles that arc not charged with such excessive retail costs as those mentioned above. For example, an investigation in seventy-eight cities shows that af tho price paid by the consumer for creamery butter, eighty-six per cent goes to the producer that is, to the creamery. This may be because butter is an article in the handling of which it is comparatively easy for consumer con-sumer and producer to get together, many townfolk buying direct from the farmer. More likely it is because the butter trade has been more extensively organized through co-operative associations of producers pro-ducers than any other branch of agriculture. The producers, to an important degree, have control of the marketing. Very likely the retail cost of fifteen per cent in marketing butter is not excessive. Sugar is another articles as to which the retail cost is relatively small. "It is quite interesting to compare the marketing waste or cost between the producer and the small retail buyer with that between be-tween the producer and the big wholesale buyer that freight rate of a quarter of a cent a pound on coffee from South America being one illustration. The Industrial Commission found that cotton growers grow-ers received ninety-three per cent of the price paid by manufacturers manufactur-ers for raw cotton ; growers of broom corn received eighty-four per cent of the price paid by broom manufacturers for their product; farmers received ninety-three per cent of the price paid by packers for their hogs; ninety-one per cent of the price paid for their cattle; ninety-two per cent of the price paid by manufacturers for then-wool, then-wool, although wool is hauled long distances. "No one could pretend to say what the total cost of retailing is, or how much of that cost represents preventable waste. Probably, if we could get the figures, they would make this agitation over freight rates look like the scriptural case of the mote and the beam not that that would warrant anybody in ceasing to be agitated over freight rates; but it might commit him to an even more profitable agitation. THE MAN WHO PAYS IN THE END. "Senator Lodge's sapient committee on the cost of living found that the tariff "seems to have been no important factor in causing the advance in. prices during the past decade." Also, it reported the case of a merchant who, several years ago, began handling a certain tea. Two propositions vere laid before him; he could sell the tea at twenty-seven cents a pound without giving away any prizes; or he could sell it at sixty cents a pound and give away a handsome present with every purchase of a given number of -pounds. Now the tea instance doesn't prove tiat the tariff is a negligible factor, but it does bring up another factor that is quite worthy of consideration. ' ' Of course the retail trade will put a pretty china dish in your package of tea or a cut-glass one, for that matter but you will pay for it. In the same way it will send a wagon to deliver the tea. More than that, it will and doubtless does send a dozen wagons to or past your door every day when two wagons could easily eas-ily do all the work; but you pay for it." It will be seen from the foregoing that the old saying, "There are tricks iruall trades but ours," is true in the tea and coffee business. bus-iness. Remember, please, the above statements are not made by this paper, but are copied from the Saturday Evening Post and the United Unit-ed States government reports. CONSUMER MUST WORK OUT HIS OWN SALVATION. In a report sent to Congress, Secretary Wilson says: "Farmers' co-operative selling associations are numerous in this country, but co-operative buying associations among the people of cities and towns are few. Aside from buying associations maintained by farmers, farm-ers, hardly any exist in this country. It is apparent, therefore, that the consumer has much to do to work out his own salvation with regard re-gard to the prices that he pays. Potatoes were selling last spring in some places where there had been overproduction for twenty cents a bushel and in some places for even nine cents a bushel at the farm; at the same time city consumers in the East were paying fifty to seventy-five cents a bushel, although there was nothing to prevent them from combining to buy a carload or more of potatoes directly from the grower for delivery direct to themselves. Theoretically there may have been nothing to prevent them, but practically there was a vast deal. In the first place,' consumers knew nothing about potatoes probably they would have known nothing of their relative grade and value. They did not know where potatoes were selling at twenty cents a bushel or that there was any such place. They would not have known how to get in touch with the growers or what arrangements were necessary for shipping. They had no place to put the potatoes when they came. In short, to get the twenty-cent potatoes into the seventy-five-cent market a complex com-plex business organization was necessary, which required for its successful suc-cessful operation business skill and judgment. CO-OPERATIVE STORE IN ENGLAND CORRECTED THE EVIL. Now, consumers want cheaper potatoes, but experience up to the present moment proves pretty conclusively that they don't want to go into the potato business. It is true that in a few instances notably not-ably in England consumers, driven by necessity, have, so to speak, made merchants of themselves. It was only under pressure of dire necessity that the great retail co-operative movement in England sprang up and flourished. Those Rochdale weavers were reduced to a plain choice between getting goods cheaper or going without. They could not pay the cost of the old retail system; so they developed devel-oped a co-operative one. I have looked into a good many co-operative associations in this country and found the rule to be that men co-operated only when they were compelled to. They would not go to the trouble of managing manag-ing the business themselves if anybody else would manage it for them' on living terms. The very scant success of co-operative buying associations among townfolk in this country suggests that we have not reached that point where necessity forces co-operation. It is a big undertaking to organize a complicated business, build it up, develop the experience experi-ence and talent needful to run it successfully, overcome the inevitable inevit-able mistakes, and all that. The undertaking is so big that nearly all those who have embarked in it speaking now of city buyers have failed. There are co-operative retail stores supported mainly by farmers in the Northwest, in California, and here and there elsewhere; else-where; but in cities the success of co-operative scheme has been small. We still manage to pay the costs of a disorganized retail system and keep alive. However, the high prices that have prevailed during the last five years and bid fair to prevail indefinitely apply a heavy, 1 probably a cumulative, pressure, which may force the receivers of small incomes to band together. HOW A LOS ANGELES GROCER SAVES THE POOR MAN MONEY IN DELIVERY OF GROCERIES. All the elements of the necessary organization are already at hand and, so to speak, in their proper places. They exist in the retail re-tail system itself, an'd on a broad viow retailers suffer as much from lack rf organization as their customers. The success of the mail-, order houses suggests what may be done to unify the rGtailers' buying buy-ing power through, a plan of distribution that eliminates duplication duplica-tion and waste. If reform is to come from within the retail system and not from the outside it will probably begin along the line3 adopted not long ago by a retail concern in Los Angeles. This company has seven stores in the city and employs, for the purpose of delivering goods, over a hundred head of horses and five automobiles, together with wagons, drivers, stable-men, and so on. It discovered that tho minimum min-imum cost of delivering a parcel at a customer's house was fifteen cents. It found, also, that rather more than half of the groceries bought at its stores were carried home by the customers; yet the man who carried his groceries home paid the same price for them as the one who ordered them delivered. In comes A, for example, and buys fifteen cents '"worth of matches, ordering them delivered. As it costs fifteen cents to deliver them, he is getting his matches for nothing. In comes B and C, each buying a dollar and a half's worth of groceries' and carrying them home; but the price they pay ia charged with the store's average delivery-cost so they are really paying for A's matches. This was obviously unfair. Beginning in December, therefore, the company proposed to make a minimum charge of fifteen cents for delivering any package or a charge of five per cent on all purchases pur-chases of three dollars' worth and upward. When a customer realizes that it is going to cost him fifteen cents to have thirty cents' worth of vegetables delivered he will probably take them home himself. Heretofore it has cost him fifteen fif-teen cents, just the same ; but he has not realized it. COST $30,000 TO RUN A CREDIT SYSTEM, WHICH THE CASH BUYER PAID FOR. Again, the same Los Angeles grocery company discovered that the cost last year of maintaining a credit and collection department, including interest on running accounts, exceeded thirty thousand dollars. dol-lars. This, of course, was sheer waste and it was borne by the cash customer as well as the credit customer, for the credit customer would be highly indignant if he were charged more for his goods than the cash customer paid; therefore the company proposes hereafter here-after to do a strictly cash business. I do not know that this is not really the first step toward reform re-form in the retail business. Among country-town merchants especially es-pecially it is a pretty general rule that half or more of their capital shall be always tied up in open accounts. Often they do not even charge interest on such accounts. With their capital thus impaired, they cannot buy for oash ; so they pretty generally pay more for their goods than they need to. THE CONSUMER MUST HELP HIMSELF. From the foregoing it will be seen that the consumer, particularly partic-ularly the small retail consumer, must look out for himself. First, the poor man should carry his goods home and save the cost of delivery. Second, the grocer must be compelled to charge for delivery and make a discount for those who carry their own goods. Then those who can afford to pay for the delivery system, can pay it without injury, while those who can not afford to pay for the delivery deliv-ery can saVe the rebate or reduction or savings of such delivery. Why not try the Los Angeles system? 'Charge 15 cents for each delivery of goods and make a discount on the groceries sufficient to make up the difference. THE UNLUCKY POOR. Of course, it is an old saying, "You are unlucky in being poor," for no one seems to be anxious to' take up the unlucky fellow's cause. Once in a great while a newspaper takes up the poor man's cause and lucky indeed are the poor people of any community where a newspaper takes up the unlucky poor man's fight. There are many newspaper men who sympathize with the unfortunate poor man and regret the meagre wages he receives, but, to preserve his advertising, the newspaper man hesitates to do that which will benefit the "common" "com-mon" people. Since this paper has taken up this battle, the grocery combine has agreed never, yes never, to again advertise in this paper. Now, where is the newspaper man with nerve enough who will run up against a proposition of this kind, knowing all the time he will suffer financially? That is not all. The "Grocers' Com-bine" Com-bine" has even started a boycott on this paper's subscription list. Do you ask why newspaper men hesitate to take up the cause of the unlucky poor? We have decided to take chances on the question; we have decided de-cided to give up the grocery man's advertisement unless he wants to give the people bargains. We want bargains and superior advertisements, ad-vertisements, as that is what the advertising columns of a paper are for. THE BOYCOTT MAY GET US IN COURT. Not forever need a paper submit to the boycott or blacklisting of any one. The state laws give ample protection. For instance, it is a crime under the laws of Utah for the "Grocers' Combine" to place this paper or employes on a blacklist. It is also a crime to ask people to stop subscriptions to this paper. It is also a crime to ask people not to advertise in this paper. All of which some grocers are guilty of. We want all the evidence on this question obtainable, and if the "common" people will stand by this paper, there is no reason rea-son why there will not be a square deal all around. |
