Market Disrupted: How Piggly Wiggly Revolutionized Grocery Shopping
Walking the aisles of your local supermarket may feel like a pretty mundane task. But 100 years ago, it was downright revolutionary.
On September 6, 1916, hundreds of curious shoppers came out for the opening of a new grocery store at 79 Jefferson Avenue in Memphis, Tennessee. A festive atmosphere greeted them, complete with a beauty contest and a brass band. Smartly dressed employees handed out flowers to the ladies and balloons to children. The store—located on a busy commercial stretch just three blocks east of the river—was the perfect excuse for some afternoon shopping, and maybe a stroll along the waterfront.
But what drew so many people that day wasn’t the location or the festivities. For weeks, they’d seen billboards and read newspaper ads about this grocery store with the funny name that promised an entirely new shopping experience—one that would, according to its owner, forever change the retail grocery business.
SETTING UP SHOP
Up until that point, retail stores all operated according to the same model: Customers placed their order with a clerk, who would then gather and bag all their items and total up the cost. With its "self-service" model, the Piggly Wiggly on Jefferson Avenue would do away with the clerks and let customers do something they’d never done before: select the products themselves.
Upon entering the store, shoppers found themselves standing before a brightly lit showroom floor. After walking through a swinging door, they followed a pathway that led them through four aisles stacked high with more than 1000 products—everything from canned vegetables to cornflakes, bags of flour to jars of preserves. National brands like Campbell’s soup and Walker Baker & Co. chocolate bars sat within arms’ reach. For the first time, they could pick their own produce and weigh it on store scales. A refrigerator case with cabinet doors invited them to pick out a tub of butter or a bottle of milk. Instead of ordering flour by weight, to be measured out by a store employee, they found pre-bagged flour in neat stacks. All of the prices were clearly marked with tags hanging over each item, allowing customers to perform a side-by-side comparison of different brands.
Once they’d selected their goods, shoppers arrived at a counter where an employee manned an adding machine and a register. Cash was the only accepted payment method. After paying, shoppers then received something else many of them had never before seen: a printed receipt.
Grocery managers throughout Memphis thought the Piggly Wiggly was a joke. But the man behind the concept, successful businessman Clarence Saunders, was very serious. The Virginia native built his career in the cutthroat Memphis wholesaling business. He rose quickly through the ranks by excelling at two roles: salesman and business consultant. And he brought those skills to the Piggly Wiggly. Retail customers came to rely on Saunders’s considerable business acumen, along with the many products he offered. When paying a visit to stores, Saunders would often walk the floor with managers, pointing out where they should hang a sign or move a product to maximize sales.
TRICKS OF THE TRADE
Saunders shrewdly surveyed the grocery industry, and what he saw was waste—wasted money, wasted space, and wasted time. Grocers had forged valuable relationships with their customers, but the quality of their goods was inconsistent at best. They also frequently neglected to list prices, which meant employees could (and often did) charge two customers two completely different amounts. Look at a clerk the wrong way, and he might upcharge you a few cents. And even though grocers offered helpful services like home delivery and store credit, they would typically charge a third above the manufacturer’s cost for each item—a grossly inflated markup, Saunders thought.
The biggest waste Saunders saw in the grocery industry was labor costs. Funneling every order through the store clerks meant long wait times during busy hours. When the store wasn’t busy, clerks were essentially paid to socialize with one another. Get rid of the counter clerks, Saunders thought, and you get more customers picking out more products at any given time, and without paying idle employees during slow hours.
In newspaper ads for Piggly Wiggly, Saunders laid out the reasoning behind his self-service model (with a dash of humor):
"Piggly Wiggly knows its own business best and its business will be this: To have no store clerks gab and smirk while folks are standing around ten deep to get waited on. Every customer will be her own clerk, so if she wants to talk to a can of tomatoes and kill her time, all right and well—and it seems likely this might be a mighty lonesome chat."
The businessman also smartly linked his concept with blue-collar values and good old American self-sufficiency. Shoppers didn’t need to be waited on; if they wanted something, they should be able to reach out and take it. A pre-opening advertisement proclaimed, "Piggly Wiggly will be born in a few days … not with a silver spoon in his mouth but with a work shirt on his back."
THE BUSINESS OF CHANGE
Shoplifting was a concern—one his competitors frequently raised in ridiculing the self-service model. They found it preposterous, too, that Piggly Wiggly didn’t accept store credit, and didn’t offer home delivery.
Saunders, though, believed people would follow the rules. Moreover, he believed shoppers would quickly adjust to Piggly Wiggly’s way of doing business because it offered lower prices and more, cleaner, higher-quality goods than competitors. "Your food at Piggly Wiggly will not be dropped on the floor, knocked over by the clerks; not scattered all over the delivery wagon nor stepped on," another advertisement read.
Some customers found the self-service model confusing, while others refused to go along with it. In another advertisement (Saunders was a voracious ad buyer), Saunders told the story of a shopper who refused to handle a stick of butter, and instead went across the street to a competing grocer, where she paid more to have the same product taken off the shelf and bagged for her.
Most people, however, were more than happy to do the work of shopping. They loved the wide selection of products—four times that of a typical grocery—and thought nothing of paying three cents to rent a basket to carry with them through the store (Saunders would eventually do away with this fee). They appreciated the price tags on display, and returned frequently to see if they had changed. They were quite pleased, too, with the low prices, which reflected just a 14 percent margin above the manufacturers’ costs.
NATIONWIDE BUY-IN
Everything about the Piggly Wiggly on Jefferson Avenue was ahead of its time, from the huge selection to the shopping baskets to the tiny hooks fixed over each product that allowed employees to quickly swap out price tags. Even the lighting—long, flat fixtures attached to the ceiling that illuminated every aisle—was revolutionary.
Within just a few months, Piggly Wiggly had sold $80,000 more than the average grocer did in the same time period, while also slashing business costs by more than two thirds.
Saunders had sky-high ambitions for his self-service grocery. Just weeks after opening the first Piggly Wiggly, he opened a second across town, calling it "Piggly Wiggly Junior." The next month he built a third location, which he gave the regal-sounding name "Piggly Wiggly the Third." In December of 1916, he opened "Piggly Wiggly the Fourth." Over the next two decades, The Pig, as it came to be known, spread across the South and the Midwest, eventually reaching more than 2500 stores by the 1930s. Competitors eventually caught up with the self-service format, and after various mergers and acquisitions Piggly Wiggly's reach was whittled down to the 600 or so that exist today.
roadsidepictures via Flickr // CC BY-NC-ND 2.0
Saunders, unfortunately, wasn’t along for the ride. He exited the company in 1923 following a stock market fight in which he drove up the price of Piggly Wiggly’s stock and was deemed to have cornered the market. He opened a chain of stores under the name "Clarence Saunders, Sole Owner of My Name Stores," but struggled during the Great Depression and had to close. In 1937, he tried to reinvent the supermarket again with the Keedoozle, an automated format that quickly fizzled out. Convinced machines were the future of food retailing, he developed the Foodelectric, an even more complex system that would help customers decide what products they wanted to buy. It remained unfinished by the time he died, in 1953.
Despite his struggles late in life, Saunders had already paved the way for the modern supermarket. Innovations like the shopping basket, refrigerator case, and cash register became industry standards. On a larger scale, the self-service model helped groceries evolve from corner stores into high-volume, low-margin supermarkets. Products expanded as manufacturers vied for customers’ attention, and aisles quickly filled up with colorful packages, signs and other promotions. Brand recognition became big business as companies got rich selling everything from shaving cream to pancake batter.
Next time you're shopping, imagine, if you can, reaching out and grabbing that can of soup or that box of cereal for the first time. It might elevate the experience, if only just a little bit. It might even take you back a century to a small but mighty grocery store in Memphis, Tennessee.
Banner image credit: Whatknot, Flickr // CC BY-NC-ND 2.0
Additional resource: Clarence Saunders and the Founding of Piggly Wiggly: The Rise & Fall of a Memphis.
