Evening star., 1942-06-28
Stores Squeezed
BySa|esCurbs,
Low Margins
Government Showing
BeIoted Interest, Soys
Business Week
Special Dispatch to The Star.

wise OF declining unit sales and
shorter gross margins, the maga-
zine Business Week reported today
The exigencies of the war pro-
gram, on the one hand, and the
price ceilings imposed by the ONCE
Of Price Administration. on the
ether. form pincer movement that
forebodes the snuffing out of many
a shopkeeper's business life.
Because the retailer produces
nothing that will fit the mouth of a
cannon, and often outbids the Army
Navy and Lend-Lease for merchan-
disc, he has inferentially been led
to believe that there is nothing
that can be done about his impend-
ing doom. Yet, now that such a
doctrine has gained fairly wide
preachment, Washington all of a
sudden shows signs Of cranking up
a program Of salvation.
In double-quick time both houses
of Congress have passed, and the
President has approved, bill ena-
bling the Reconstruction Finance
Corp. to bail out dealers whose in
ventories land cash assets) are
frozen because of rationing. OPA
has prevailed upon soap manu-
facturers and the refiners of lard to
cut their prices in order to allow the
dealer fair margin. And, most
significant of all, the War Produc-
tion Board, which never did solve
the problem Of the small manufac-
turer. now wants to help the shop
keeper by smoothing out alleged in
equities in inventories.
Black Market Alluring.
What all of this suggests is that
the philosophy of letting dealers die
a natural death isn't as simple as
it looks. The average grocer or
hardware merchant may not know
how to assemble a machine gun,
but he does know that, If he's
squeezed too hard, the black market
begins to extend the haunting in
vitation of a macabre dream. And.
best Of all, he knows that his local
representative is there to 60 to bat
for him.
It's apparent that the financial
differences among retailers almost
automatically divide them into cat
egories of varying sentiment,
economic Importance and vocal
power (as reflected in Congress- =.
Hence, official treatment necessarily
has to follow the same pattern.
Class w Hit Hardest.
"Class IV-that of the $4,000
and under INDEPENDENTS in the
worst inventory position and. &C
cording to OPA, most befuddled by
the requirements of the General
Maximum Price Regulation. Yet
Class Nv stands the least chance
of getting any major attention.
AT best, shorkeepers in this cat
egory earn $50 a week. Mortality
among them is so high that one
study showed 93.8 death ratio over
a period of five years for establish
ments with net worth Of $4,000
or less.
"Ofncial salvation would have to
cover the proprietors of nearly a
million stores who are politically
unorganized. who are often able to
earn a greater wage in other in
dustries and whose potential weight
in a black market would be small
because of their low aggregate sales
1ess than 10 per cent? and eually low
stocks -on-hand (only about 7
per cent increase since last year.
Glass lat the other end of the
scale-will probably be deemed big
enough to absorb most any shock.
For the major retailers. and es-
peciallv the chains. to ask grace
fully for outright help would be a
hard job. 1t would stir up too much
fuss. They must comply punctili-
ously with every Government reg
ulation because they stand we'll out
in the limelight. And in the last
analysis, no big retailer can afford
to close up shop in the immediate
future. That would be tantamount
to dissipating the value Of his name
while inviting disastrous taxation on
the distribution of assets.
Regarded as Key.
"The medium sized retailer, then,
is the nub of the problem. Com
prising 81 per cent of stores doing
40 per cent of the retail dollar vol
ume. this classification furthermore
numbers 650,0O0 active proprietors
and l,825,000 employees "a mighty
chorus of potential voteS. Here is
where As per cent of the Nations
bookstore business is transacted;
80 per cent of the apparel business;
A per cent of the furniture-house-
hold-radio business; Sc per cent Of
hardware; 81 per cent of drugs; So
per cent of packaged liquor.
incidentally. here also is where
the interests of the national manu-
facturer are centered, for the bulk
Of this business rests solidly on ma
tionally advertised, branded mer-
chandise. Time and again, the
medium-siz merchant has indi-
Gated that the nationally advertised
brand is his bread and butter. The
manufacturer can hardly afford the
marketing consequences Of letting
his stanchest supporter falter. And
this is an important fact in this
situation.
"WPB, in the last analysis, has
surveyed the problem shrewdly by
focusing attention on the next-to-
the-big retailer. Whether WPB's
inventory control ideas Zone regu-
lation already has been junked. and
a new one Is in the milD will provide
the correct answer is beside the
point. For this much appears to be
true: The sights are set for the
x,rixna Ell Sn,1rna of frnalkle -