The Dickinson press., 1916-06-03
$1,000 a month in any store, but it

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The Penney stores sell very few
advertised goods.
when we are not permitted to cut
the price of an advertised article and
we feel that it has merit" said Mr..
Penney, 1--WE have it made up for US
by the manufacturer under our own
brand. We buy direct in every case,"
Each store manager suits himself
as to the amount and kind of adver-
Using he shall do. All, of course, go
in for window dressing. Some use
dodgers alone for distribution, others
newspaper Space, spending as much
as two per cent of the gross sales.
Occasionally some folders are gotten
out by headquarters for all the stores.
Trading stamps and premiums are
not used.
In selecting it's stores the Penney
company operates on a policy very
different from that of the Woolworth
and United Cigar stores companies,
for example. These large chains
went first into the large cities. The
Penney stores have spread chiefly in
the small towns where there is a larg-
err buying power per capita for that
type of store than in the city.
Large Per Capita Buying Power
"If Marshall Field & Co. of Chi
cago, and John Wanamaker of New
York and Philadelphia averaged as
much trade per %inhabitant in their
communities as is given to the chain
of Golden Rule s~tores," says a Penney
circular issued last year, Marshall
Field would do over $70,000,000 bust
ness annually and John Wanamaker
in New York would do about $780,
600, 900 annually, and in Philadelphia
over $4,000, 900 annually"
The Penney chain is gradually 'ex-
tending into small cities like Walla
Walla, Occur d'Alene, Albuquerque,
Bakersfield, Fargo, etc. No cut-and-
dried system has yet been used in
picking towns for operation. Exten-
sions have generally been made ac-
cording to the acquaintance of some
one or other of the managers or the
directors. A careful investigation is
made to determine the character of
the place, it's business, chances for a
good location, etc. No attention in
particular is given to competition, SO
confident is the company of its ability
to undersell any rivals. AS Kemmer-
err, for example, when Penney opened
his first store, long before the days
Of the present efficiency, he was
strongly advised against locating
there, being told that the local mer-
chant had a connection with the mines
and thus in a way controlled the pay
roll. But Penney went in just the
same, located on a side street and
made a profit almost from the begin
ming.
The Woolworth chain and United
Cigar stores attribute S 20 much i'm
portance to location that they will
keep out of a community rather
than take a second-rate site. In
smaller communities, according to Mr..
Penney, location does not count for
so much. If there is a prohibitive
rental on the best location, he will
take the second or third best, and the
people will come to him just the
same.
On account Of these policies, the
absence of heavy overhead expenses
and the personal devotion of the man.
ager-partners, the operating expenses
are as little as twelve per cent as
against an average of about twenty
per cent for small town stores OF the
same type. Accounting is facilitated
by daily reports from every store
Receipts are banked subject to New
York draft three times a week.
The Penney stores are really, as
said, a combination Of the best of in
dividual management with chain
store direction. In the chain-store
series published in Printers Ink III
the fall of 1914, the conclusion was
reached that the chains Of the best
known old type, however, they grow
and multiply during the next few
years, will ultimately, if they are
continued on their present basis, be
in for a bad time, and Mr.. Penney
shares this opinion.
II think there will be a continual
drift towards concentration in the re-
tail business" he said, "but l think
there will be many changes in chalr
organization and methods.
Really Combine of Independents.
"Our chain is not really a chain ir
the sense in which the word is ordi.
narily used, but a combination Of
what are essentially independents
buying in mass and exchanging ideas
and experience. I think this is the
type or something like it that must
ultimately prevail, because it has ir
it the germs of continual renewal ane
reproduction, while the old style chair
weakens as it spreads. I believe GU,
plan is showing itself just as appli:
cable to city as it is to small-towr
business, and to the east or south as
we'll as the west. Whether it is ap'
plicable to large business units is an
other matter"
Several other small chains have
copied the Penney methods in some
details with some success.
Mr.. Penney has recently insured al
his own expense, the lives Of each Of
his 1000 employees, men, girls. ane
boys, for an amount equal to the
salary in each case. There was M
particular reason, he says, except that
he wanated to do it.
Such is the Golden Rule chair
which is giving so remarkable an &C:
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