RETAIL COMPETITION 1. Retailing prior to the Civil War.—Before the Civil War, retailing in the United States was very simple. There were only a very few department stores; chain stores were almost unknown; the mail order bugaboo was not yet threatening the small dealer; cooperative stores were too rare to be con sidered seriously, and the field was left to the spe cialty shop and the country general store. Monot ony was the most noticeable characteristic of the retail business during this period. The craze for rapidly- changing fads and fancies had not yet ar rived; the majority of lines consisted of staples that were largely in demand year after year; and con sumer demands were less exacting and variable than they are today. Finally, there were generally rising prices, which continued to go up until the end of the war. As a result of all these things, dealers often thought it advantageous to keep goods for a long time on their shelves. When goods are staple and when prices are rising, the merchant is willing to carry stocks over from year to year. Consequently, long before the present age of keen interest in the relation of turnover to profits, retail methods were often lax and careless. "Storekeeping" was not a career on a par with the professions. It was thought that anyone could keep a store, regardless of ability, and make a living without greatly exerting himself.
One other result followed from the conditions then existing. With prices frequently changing and gen erally rising, goods were usually left unmarked ex cept in cost figures. The one-price policy was al most unknown. Bargaining was in vogue; goods were usually sold to the individual customer for what that customer could be induced. to pay. To be sure, this was not entirely due to current conditions of sta ple goods and rising prices; it was traditional in re tailing, and the conditions obtaining prior to the war and for some time after it, simply provided a favor able environment for a continuance of the customary lax procedure. In such conditions competition was largely on a price basis. A few dealers based a con scious price appeal on a shrewd and in-advance-of the-times policy of low profits on a rapid turnover. Most retailers, however, knew little of this secret of modern merchandising; they did not offer low prices, tho low prices were often forced from them by bar gaining customers. Customers went where they
could "beat down" prices, and the curious spectacle was frequently presented of those dealers doing the largest business who were least successful in uphold ing their original prices.
2. Changed conditions after the all the important conditions surrounding the retail busi ness changed soon after the Civil War. Prices be gan to decline, and the decline was sharp for several years. True, a steady rise soon set in again, but in the interval most dealers had to change their entire basis of business or else go to the wall, and the changes then largely effected. have continued to the present day. With the sharp decline in prices, and with the tightening of credit terms granted to retailers, goods had to be sold at once if large losses were to be avoided. Recently in an Illinois town an old mer chant died who still had calico on his shelves that he had bought at one dollar a yard, and which be refused to sell belowsost. Most dealers, however, were alive -to the new conditions. The necessity for quick re moval of stock awoke a keen spirit of competition. The retail dealers who had slumbered for years sud denly found themselves faced by the necessity of either becoming very much awake or of going out of business.
The change in retailing conditions brought about by the declining prices after the war was further necessitated by other developments that followed fast on the heels of the price revolution. Prominent among these developments was the increased variety of manufactured goods. With the disappearance of the frontier and with the remarkable growth of Amer ican cities, household industries declined; many of the things long produced by eadi family for its OWIl consumption were now manufactured outside of the home and sold Hirt' retail stores. This meant larger and more complete stocks; and this in turn required the more frequent turning of capital if the average retailer with small capital was to make the same net profit as before and stay in business. He could ad just himself to the new conditions only by radically changing his business methods.