SHOPS AND FIGURES
By PROFESSOR HERMANN LEVY rr HE high and still-rising costs of distribution have become a I puzzle to consumers, farmers, manufacturers and economists alike. Consumers, curiously enough, are perhaps least aware of this trend. Many commodities of daily use have, in normal times, grown less expensive than they were some decades ago, and purchasers do not realise that this is due to new and cheaper materials, improved methods of production and reduced transport charges—and not to cheaper or more efficient distribution. Neither. do they realise that the rise in distributive costs considerably curtails the beneficial effect of any reduced cost of production. But farmers and manufacturers are more and more aggrieved by the fact—of which they are good judges—that their products are sold to the public at a price generally too per cent. or more higher than the price they get from the whole- saler or retail distributor.
The process of distribution is sub-divided into many stages, involving wholesaling, transport and depot charges, storage and sometimes processing by distributors ; but the main costs arise obviously in retailing proper. It is to this function that an inquiry into the high cost of distribution has first to be directed. Here, again, a good many different factors are involved, but one of them has attracted special attention—the great number of shops. We have in Great Britain, according to estimates, 800,000 to r,000,000 shops, of which probably 65o,00o are managed by small independent shop- keepers. This appears a pretty high number for a population of 45,000,000. The fact that these shops employ about 2,000,000 assistants points to their small average size. Sometimes in an urban district 25 per cent. of the shops situated in the centre of the town represent 75 per cent. of the total value of the turnover of the whole district, while 75 per cent. of the shops, scattered in the suburbs, do no more than 25 per cent. of the total retail trade. This position is regarded as absurd. Could we not, ask critics of the present system of distribution, reduce the cost of retailing by having fewer shops, with a larger turnover each and thereby lower overheads? Was it necessary, for instance, to have, before the war, 30,000 intermediaries levying toll between the producer and the user for the 3,000,000 tyres
sold annually? It is this type of criticism which makes greater knowledge about the structure and competitive aspects of retailing necessary.
Though the White Paper just published (Cmd. 6764) rightly suggests that a "Census of Distribution" will serve many useful purposes—that it will be of value to Government departments, manufacturers, distributors and trade unions, and provide a more comprehensive assessment of the nation's income—there can be no doubt that the impetus to the compilation of such a Domesday Book comes from our uneasiness about the multiplicity of shops. The same motive has probably prompted the U.S.A., Canada and Eire to set up in some form or other a similar census of distribution. If these attempts come so much later than the statistical records of the structure of production, the reason is simply that the organisation of distribution is far more complicated, differentiated and disintegrated than that of manufacture, agriculture and mining. The point is very clearly brought out in the report of the Census of Distribution Committee, which can claim a high rank among advisory bodies and has fully appreciated the difficulties of the task of such a survey. A census of this kind must include, as the Committee strongly recom- mends, all the various types of retailing. It must distinguish between independent retail shops (a) with one or more proprietors and (b) without working proprietors ; departmental stores, multiple shops and chain stores ; co-operative shops, and such " other types " as credit, hire-purchase and check-traders, mail-order houses, street-trading, and markets. Even automatic slot-machines must not be omitted. It must deal with the service trades as far as they retail goods— restaurants, milk-bars, hairdressers, pawnbrokers, funeral-furnishers. Laundries, dyers and cleaners and all sorts of establishments doing repair work must also be included.
While the Committee has paid attention to all this, it has perhaps not sufficiently recognised that the structure of retailing should be analysed not only from the view-point of the " single-trade " outlet, but also from that of the "commodity-outlet." Today single-trade shops are probably diminishing in importance, while the retailing of all sorts of commodities is spread over shops which sell quite hetero- geneous commodities. Cadbury's recently stated that of the total number of shops selling confectionery not more than 4 per cent. were selling chocolates and sweets only, and the firm estimated that the number of confectionery outlets in the U.K. are normally at least 250,000. The weakening of the single-trade shop by the growing dispersal of retailed goods over a large number of dis- tributors of all sorts should not be ignored.
The proposed census of distribution will have to dissect the retail structure very closely ; it will gather information from wholesalers and retailers about turn-over and the prices at which goods are bought and sold, to supply some idea of the distributive margin. Other questions will relate to the date of purchase or foundation of the business, to the number of persons employed and their wages, to book-debts, the cost of collection and delivery of goods and floor space. "Retail sales by wholesale establishments " and " whole- sale sales in retail establishments " will be recorded ; this is neces- sary as " stocks " may become representative of trade-trends in periodical censuses. Indeed, here is a very far-reaching list of points to be covered—an ambitious programme.
It seems that a great number of trade associations and similar bodies favour the idea of a census of distribution, but organisations representing mainly small and medium-sized traders are against it. Such opposition is not surprising. Small traders have always been a class proud of their independence and anxious to keep a certain amount of commercial " privacy ". This, quite apart from the trouble and work invoived, may be a reason for opposition. But there is a more important one. Small traders fear that pub- licity about their numbers, the possible disclosure of over-lapping and waste, may lead to drastic measures. It cannot be denied that this thought originally stimulated the census idea, and that limitation may even be welcomed by some of the retail trade organisations which have for a long time aimed at a restriction of shops by qualification tests, registration, licensing and distance limits.
It would be in the interests of the planned census if a declaration could officially be made that no conclusions as to the harmfulness of a great multiplicity of retail outlets should be drawn from the bare statistical revelations. A multitude of shops is not character- istic of Britain alone. Even in the U.S.A., with its standardised methods of production and distribution, there is a very large number of traders in densely populated areas. The State of New York, with its 13,5oo,000 inhabitants, had in 1939 no fewer than 209,000 stores with 567,000 employees. The small shops of Britain are not just a survival from the past. Dispersed as they are, they serve the public in a different way from those in the large centres—by proximity to consumers, by personal attention, by availability for advice. The large stores cannot provide these advantages, and try to co.npensate by such costly services as home-delivery, social attractions and advertisements. Small shops and large stores can- not be assessed as to their efficiency by such simple and obvious technical criteria as the small and the large plant in industry. Figures can never solve problems, though some problems may not be solved without figures. A census of distribution, on the lines explained by the report, would merely lay bare the numerical ground-work of the retail structure. It would tell us what the structure is, not why it is so and where it should be adjusted. Suggestions for this would only be possible, if, apart from its statis- tical aspect, the problem of retail distribution were analysed with regard to the various social exigencies involved—economic, local, professional. For this purpose more than the proposed census would be necessary. Only a Royal Commission on shops could hope to find the right approach to the controversial problems in- volved in retail distribution of which Lord Woolton once said that " no other industry so closely touches the common life of the people."
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