Many small-town grocers affiliated with chains in 1920s

Last week’s column de­scrib­ed some of the develop­ments in retailing in Wellington County in the early 20th cen­tury, and the appearance of the first stores affiliated with chains. This week the story continues into the 1920s.

The Rexall network was the first retail chain to gain a solid presence in small town Ontario. A few grocery stores were also affiliated with chains before World War I, but that was initi­ally a big-city phenome­non. That situation changed quickly and drastically in the 1920s.

Ontario’s grocery industry saw a series of complicated de­vel­opments, beginning in 1883 with the formation of the Whole­sale Grocers’ Guild in 1883. That group, which at­temp­ted to control the industry in Ontario and establish uni­form prices for everyone, in­cluded most of the wholesale distributors in the province.

The initiative for some of the early grocery chains was to break that monopoly by dealing directly with producers and importers. The Guild, threaten­ed by those developments, blacklisted those firms that dealt in any way outside its own channels.

The federal government start­ed a prosecution of the Guild as an illegal combine, but it broke down in 1913 for other reasons. A new group, the Whole­sale Grocers of Ontario, attempted to pick up the pieces, but war conditions deterred those efforts. After the war, serious price inflation and short­ages put the Ontario gro­cery industry on a new foun­dation.

It was possible, but diffi­cult, to do business outside the WGO, which included 72 of the 80 wholesale grocers doing business in the province. One of the first groups to run into difficulties was J.J. Morrison, secretary of the United Farmers of Ontario, who attempted to sell groceries in United Co-op­era­tive Stores, and outside the WGO network. The United Farmers eventually purchased a wholesale firm to get inside the WGO tent.

A group of about 60 retail grocers, most in Toronto, were dissatisfied with the control exercised by the Wholesale Gro­cers of Ontario, and they set up their own distribution firm, the York Trading Com­pany, to purchase and distribute goods at a lower cost to themselves.

Some grocery items, parti­cu­larly meats, bakery items, and dairy products, were not generally part of the wholesale network. Most grocers dealt with local sources, sometimes farmers, and sometimes small dairies and independent butch­ers. Most meat, though, was still sold through butcher shops. And by 1920, not all butchers were independent: the William Davies Company had by then established a large network of retail outlets, some of them in smaller towns. It does not appear that Davies had any outlets in Wellington Coun­ty, though the firm did operate a processing plant in Harriston.

The biggest factor in the sudden rise of grocery chains was probably the rapid price increases of 1918 and 1919, and the desire of many grocers to cut their costs and to pass the savings on to customers. As well, some grocers decided to embrace a policy of cash-and-carry, rather than carry custo­mers’ accounts for weeks or months.

As well, there was no de­livery service, which was an expensive service offered at no extra cost by many grocers. The first chain to make a big impression in Wellington Coun­ty was the Hamilton-bas­ed Carroll’s network. There were 18 stores in that chain in 1920, 43 in 1923, and 108 at the end of the decade. By 1930, there were Carroll’s stores in Mount Forest and Fergus. Carroll’s maintained a single warehouse, and purchased dir­ect­ly from manufacturers as much as possible.

Earliest of the grocers to establish a chain was that of T.P. Loblaw, beginning in 1910, though his network was initi­ally a big-city phenome­non. In 1919, when Loblaw ran 10 stores, he sold out to a new player in the industry: Domi­nion Stores. Interestingly, for a while after the sale, Loblaw ran the grocery operation of the United Farmers.

Though the name sounded distinctly Canadian, the Domi­nion store chain was dominated by American interests. The com­pany wished to build a Canadian equivalent of the successful Safeway and Piggly Wiggly chains. Senior manage­ment positions were mostly held by Canadians, and the chain expanded rapidly through the 1920s, opening a store a week in most years, and ab­sorbing several smaller chains along the way. By 1935, there were 350 Dominion Stores, and by the end of the decade the number stood at 575.

That number included stor­es in both Mount Forest and Fergus, competing head-to-head in both towns with Car­roll’s. The Dominion Stores of that era tended to be small outlets, similar to the old inde­pendent stores. As well, they were not yet self-service. Domi­nion pioneered in the selling of house brands, such as its Tasty and Creamy White bread.

Though of relatively minor importance provincially, Sup­erior Stores enjoyed a strong following in Wellington Coun­ty.

The chain began as a co-operatively-owned distribution system, designed to allow its members to trim their retail prices through joint bulk pur­chases.

Many of the smaller, independent grocers signed up. In Guelph, there were 12 stores associated with the Superior chain. In the smaller towns in Wellington, G.R. Metheral’s gro­cery in Mount Forest be­came a Superior store, as did J.M. Wilson in Elora, and the Steele Brothers grocery depart­ment in Fergus. There were others in the county as well.

The other significant gro­cery chain operating in Well­ington in the 1920s was Red and White. By 1930, H.R. Fair in Arthur and Robert Cutting in Drayton were in the Red and White chain. Over the decades a Red and White store became a feature of most small town Main Streets.

During the 1920s, T.P. Lob­law began building a second chain.

Unlike Dominion, those stores were large in size, and were located only in larger centres. The American A&P chain also expanded into Onta­rio beginning in 1928, opening 77 stores in less than two years, but its stores were also concen­trated in larger centres. Both Loblaw and A&P followed poli­cies of extreme stand­ard­i­zation. During the 1930s, both opened outlets in Guelph, but they eschewed the smaller cen­tres in Wellington County.

By 1930, most of the small town and rural grocery stores were associated with one or an­other of the chains. The re­main­ing independents general­ly purchased the bulk of their goods through one of the re­maining independent whole­salers, such as York Trading or Lumsden Brothers of Hamil­ton.

The chain concept affected other segments of retailing in the 1920s and 1930s. Only in the drug sector was the trend so pronounced.

The United-Rexall chain signed up several Well­ington County stores in those years, among them Homuth’s Pharmacy in Harriston and Lorne Ford’s drug store in Fer­gus. And other drug chains ap­peared: Farley’s Drug Store in Fergus affiliated with the Nyal chain, and others followed in later years.

For other product lines, the chain concept arrived much later. And in some lines, parti­cu­larly clothing, there are still a few retailers in Wellington op­erating outside the national chains. But their numbers are shrinking.

The supermarket concept for grocery stores was late in arriving in Wellington County. In 193, the Loblaw chain con­verted one of its large Toronto stores to the concept: cash only, self service, and no delivery. Loblaw, during the 1930s, converted many of its stores to self-service supermarkets. Oth­er chains, though, did not follow that trend until after World War II.

Outside Guelph, the self-service concept as we know it today did not arrive in Well­ington County until 1947, two decades after it had become commonplace in Toronto and other large centres. It caught on like wildfire.

But that’s another story for another time.