Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-05-18
Retail Store Sales
Show Small Loss
In Recent Months
''Group Incentives" Plan
of Merchandising Gains
Favor With Employers.
BY J. C. ROYLE.

The average life Of the new retail
store is short, according to Stephen I.
Miller, manager Of the National As
ISOLATION Of Credit Men. Every time
one such store goes under it repre-
sents an economic loss to the COM
munity, and the total Of such losses
in the last 10 years. he says, has been
S., o00. 900 900.
FAULTY distribution is given as the
cause for most Of these business dis
asters. The public is being over mer-
chandised, according to other dis
tributors, and with competition at its
present pitch profits are possible only
by careful holding down Of costs.
The difference In the volume OF re-
tail sales between times of prosperity
and depression Is small. Department
store sales in April were sufficient TO
bring total sales for March and April
almost up to the level for those months
in 1929, when the country was at q
only about 2 per cent. During the
great panic of 1906 it was estimated
total sales at the low point Of business
were within is per cent Of the record
high up to that time.
Department store sales.
For the first four months Of this
year the volume Of department store
sales, which Is an excellent barometer
Of general business conditions, was only
per cent under the corresponding
months in 1929, whereas in April, sales
were ahead Of those for April, 1929.
The narrowness Of these fluctuations
does not mean that profits are un-
affected. Margins Of profit are so mar
row in some cases that the slight
change means q difference between
profit and loss. For that reason, mer-
chants are hunting out every possible
means to cut expenses. The chain
store has grown up with this object in
view, but its merchandising Is, after
all, q selling Of service as well as goods,
and when the system Is 80 extensive
as to be complex, this item Is minim-
lied.
Many merchants are now seriously
considering the adoption Of group in
centives," under which . bonus or
premium is paid . group Of emloyes
contingent on combined rather than
individual efforts. This plan has been
tried with advantage by some auto
mobile producers, but it is new In the
retail salesman's field. DIR. c. Balder-
son Of the Wharton School Of Finance
OF the University OF Pennsylvania de-
clares that employers who have sub
stituted group payments for o days
work have universally experienced o
reduction IN direct labor costs. He
adds, however, that similar labor saw
ings are to be obtained from individual
incentives.
Pressure within Group.
1.-THE social pressure within the
group" Dr. Balderson said, "encour-
ages the slackers to increase output,
and the training Of new employees by
fellow workers Is stimulated"
There is an annual bad debt loss in
the United States Of close to q billion
dollars. DR.. Miller declares that no
nation Is rich enough to carry such a
burden and that the screening out Of
merchants with little chance Of sue
cess In the field Of distribution should
rest with the credit manager Of manu-
facturers and wholesalers.
"If credit granters continue to set
up weak and inefficient retailers, they
will slowly diminish the buying power
Of the country through waste and in
creased COST" he said.