Can Local Markets Become Global Chains? – 1

* The vision and competence of a single individual can change the destiny of companies as well as entire industries. The history of grocery chains was shaped by the entrepreneurial spirit sparked by the Industrial Revolution and the protection of private property.

* From the world’s first retail chains to the present day, local brands have transformed into global giants through the power of law and entrepreneurship. Examples from the past to the present demonstrate that grocery chains in Türkiye can also achieve international success with the right leadership, vision, and systems.

Since my years as a young university student, I have been committed to scientific work and to building systems based on research and planning grounded in real data; in every field I have been responsible for, I have made an effort guided by this approach. This mindset can, of course, be seen as a natural attitude and way of viewing life expected from a chemical engineer.  However, the truth is that it was a thought I developed in my earlier years, while still in secondary education, that set me on this path. Yes, I have held the same idea for nearly thirty years: in my view, whether in societies, states, armies, or companies, the situation remains the same—when one person changes, everything changes! When the person in authority and power is competent, knowledgeable, and morally grounded—in other words, a leader who is truly “merit-based”—the outcomes achieved are naturally positive. But what if the opposite is the case? It is precisely to avoid such potentially disastrous outcomes that I have, for many years, focused on building systems rather than relying solely on individuals.

In our previous article on this topic, we emphasized that within the long history of trade—almost as old as humanity itself—retailing, and particularly “chain store retailing,” is in fact not as ancient as it might seem, since large-scale production and the supply of goods only truly began with the factories established after the Industrial Revolution. Without understanding the individuals who, through their entrepreneurial spirit and personal efforts, drove this transformation and left their mark on retail history, as well as the companies they founded, it is not possible to fully comprehend the development of the sector.

The enrichment of commercial life and the rise of the business world in Britain were, in fact, driven by “law.” Courts consistently issued rulings in favor of private property across different cases, in different cities, and at different times. The strong protection of property rights led to a significant rise in entrepreneurial spirit throughout the country. Great Britain, as it is today, was governed by the monarchy; moreover, there were individuals who held aristocratic and noble titles by birth. However, anyone who worked hard enough, produced something, traded goods, and accumulated capital could, if they wished, live like kings. Because the legal system protected private property rights, this favorable environment rapidly increased the number of entrepreneurs in 18th-century England at a pace unmatched anywhere else in the world at the time. The first “commercially sold” steam engine was developed by the English engineer Thomas Savery in 1698 and introduced to the British market in the early 1700s; naturally, the first factories were also established in England. Steam-powered machines were used particularly in the textile industry. Beyond production, the invention also revolutionized transportation, enabling the rapid expansion of Britain’s railway network. As the number of steam trains increased, transportation and communication became significantly easier. Recognizing this as a tremendous opportunity, Henry Walton Smith and his wife Anna Smith founded in 1792 what would become “the world’s first retail chain”. Anna was a housemaid. She and Henry, whom she married in 1784, had three children—two sons and one daughter. Only a few months after they opened their newspaper and retail shop in London, she lost her beloved husband, Henry. However, she had to continue working for the sake of her children. Just like the heroic woman grocer in Ferhan Şensoy’s 1991 theater play “Kahraman Bakkal Süper Markete Karşı”, who, after losing her grocer husband and having no social security or income, was forced to continue running the grocery store, Anna also carried on under similar circumstances. When Anna passed away in 1812, the management of the family business was taken over by her younger son, William Henry Smith. As the number of railway stations increased, so did the number of stores. Although the company has undergone various developments throughout its history, today, 233 years later, WH Smith still operates with approximately 1,300 branches. In 1796, Harding, Howell & Co. was established by Anthony Harding in Pall Mall, London. Unlike the scattered shops opened in different locations across major cities over the previous century, this was a large multi-storey department store. The store was divided into four departments: furs and fans; dress fabrics and haberdashery goods; jewelry and watches; and perfumes and cosmetics. It was now the first example of a multi-storey department store in the world, attracting not only the upper classes but also a far more important and larger customer base—the middle class, who aspired to appear wealthy. It was this Harding, Howell & Co. store that inspired the opening of the famous Harrods department store, which was established in 1834 and is now also a major tourist attraction following its opening in 1905. Likewise, the Le Bon Marché department store in Paris, opened in 1838 by brothers Paul and Justin Videau, was also inspired by this first multi-storey Howell store in London. Le Bon Marché in Paris, like Harrods in London, remains a major attraction and has been part of LVMH since 1984 under the ownership of the French businessman Bernard Arnault. Following the opening of similar stores first in London and then in Paris and other major European cities, comparable establishments were soon opened in Istanbul during the Ottoman period in the 19th century. In the 1800s, Beyoğlu was filled with numerous shops and multi-storey department stores much like it is today. As might be expected, all of the entrepreneurs were Europeans and non-Muslim Ottoman citizens whose private property rights were guaranteed through international treaties. Due to the influence of French culture on the Ottoman Empire during that period, the “Bon Marché” concept had become an integral part of daily life for the local population. Even during the Republican era, signage bearing this name could be seen in many cities across Anatolia in shops owned by local citizens. “Bon Marché” was used for many years as a term synonymous with the concept of large, multi-storey department stores.

Two of the most important developments triggered by the Industrial Revolution were the unprecedented acceleration of urbanization and population growth. With the introduction of mass production and packaging techniques, the food industry also expanded rapidly. The fast-paced developments across many sectors were transforming nations into consumer societies. Almost everything supplied to the market was, in effect, “creating its own demand.” Stores specializing in food-related goods had certain advantages, much like they do today: the required initial capital, the value of inventory to be held, and the costs of opening a store were all significantly lower compared to retailing in other sectors. Founded in 1859 by George Gilman, A&P (The Great Atlantic & Pacific Tea Company) was the largest grocery retail chain in the United States between 1915 and 1975. A&P, which—true to its name—began in New York as a retail chain operating small-format stores selling packaged and bulk tea and coffee, was regarded as an American icon that, according to The Wall Street Journal, was “as recognizable as McDonald’s or Google today” and “the Walmart of its time.” At its peak in the 1940s, A&P captured 10% of total grocery spending in the United States. Known for its innovation, A&P improved consumers’ dietary habits by offering a wide variety of food products at significantly lower costs. Until 1982, A&P also operated as a major food manufacturer. The company had grown to 70 stores by 1878 and to nearly 200 stores by 1900. A&P experienced significant growth after introducing the “economy store” concept in 1912, reaching 1,600 stores as early as 1915. Following the First World War, it expanded its production capacity while opening stores that sold meat, fruits, and vegetables. By 1930, A&P—then considered the world’s largest retailer—operated 15,000 stores and achieved annual sales of 2.9 billion dollars (equivalent to 54.6 billion dollars in today’s terms). Even the largest supermarket chains in today’s Türkiye achieve annual sales figures in dollar terms that amount to only around 30% of A&P’s sales nearly a century ago; quite striking, isn’t it? Unlike European countries that were weakened particularly during the Crimean War (1853–1856), the United States had an expansion-driven economy that offered enormous business opportunities for entrepreneurs. A similar situation would be experienced on a much larger scale during the First World War. As a result, just as in many other sectors, the United States witnessed rapid developments in retailing and supermarket chains; it attracted hardworking individuals and entrepreneurs from all over the world who were pursuing their ambitions. In America, many people were changing things in ways that would eventually influence humanity as a whole.

If I believed it could be read comfortably, I would have liked to present in a single column the biographies of many individuals who brought about major transformations in the history of retailing and grocery trade; however, I know that this is not possible. However, in order to ensure a proper understanding of the “global history of grocery retailing” and to better comprehend today’s supermarket categories and retail companies originating from different countries, I will, as much as possible, summarize the subject and in our next article introduce the individuals who pioneered many industry firsts: the first to introduce mail-order and delivery services, the first to offer shopping carts to customers, the first to use conveyor systems in stores, the first to implement shelf price labeling, the first to adopt self-service shopping, the first to introduce product expiration dating on shelves, and the first to provide parking facilities. Because despite all kinds of difficulties, I believe that there are people who respect knowledge, who want to learn, and who may one day contribute to significant changes in the growth of domestic and local supermarket chains in our country and their ability to develop into international players. If I can be of benefit to even a single person… I consider myself fortunate.