Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-04-23
ADVERTISERS LEAD
IN SALES ADVANCES
Better Merchants Report
Gains Despite General Drop
in Business Volume.
BY ]. c. ROYLE.

The old theory of the survival OF
the flttest" is being amply substantiated
today by the annual reports of retail
merchants. Retail sales of merchan-
discs unquestionably is the most au-
thoritative barometer of business ac-
tivity. There no doubt has been very
decided drop in the volume of bust
ness transacted and yet the more eff
ficient merchants report, in almost
every case, an increase in business
rather than q decrease for 1880.
This is strikingly eXGmplified in the
reports of the largest chain store sys-
tenn in the world For the II months
ended February %. 1881. this company
reported the largest volume of goods
sold with the largest volume OF dollar
sales ever recorded by the corporation.
1t also reported the greatest net profits
of any year of its history OF over IS
years.
This company increased its margin
of profit to 283 cents on each dollar of
sales This figure compared with 2.49
cents for the previous fiscal year. The
net income for the company was more
than double the amount in 1925 and
more than four times the amount
earned IN 1922.
Advertisers Lead Field.
1t Is strikingly apparent that the
more successful merchants are those
whose percentage of expenditures for
advertising is the highest. The estab-
lishments doing the greatest bushes
have the largest expenditure for news
paper advertising in proportion to thin
net sales.
According to information furnaslSes
s -
bulk of the advertising appropriations
of the merchants of the country IS
devoted to newspaper advertising. A
survey throughout the seven South
western States, which involve 376 re-
tail stores, showed that companies hav-
ing net sales of over $10.000,000 for the
year devoted nearly per cent of their
totals to advertising. whereas stores
with sales of less than 100000 a year
spent only l.72 per cent of their totals
for advertising. A great bulk of the
stores covered held fairly well to a
fixed rate between net sales and adver-
Using expense However, 90 per cent
increased their advertising in the last
year, whereas only 13 per cent re-
duced it.
OF the entire list which did over
100000 worth Of business during the
year only two stores used no newspaper
motion efforts on circulars and hand
bills. About one-third of the stores
circularized used newspaper advertis-
ing daily. An additional number used
the newspaper six times a week and
still larger number used them five times
a week.
Followed With Mail.
About So per cent of the stores sup
plemented their newspaper advertising
with direct-by-mail appeals. This Is
usually done once monthly and the ap-
pealS consist largely of the including Of
circulars with the monthly state
statements of customers accounts. Some
few stores, however, send out mailed
sales messages twice and three times
month.
The volume Of sales of the more sue
ceSsful stores has been maintained and
in fact increased despite the drastic
drop in commodity prices. Wholesale
grocery prices, for example, dropped 2.3
per cent in the last month, according to
an index based on list of "a grocery
items.
Despite this fact. it is reported, that
the earnings of the General Foods Cor
poration during the quarter ended
March 1, amounted to approximately
$5,300,000 after all charges and Fed
eral taxes. This compared with $780,
600 for the first quarter of 1880, all
though commodity prices are estimated
to have dropped Is per cent between the
two periods
(Copyrisht, 1917