Friday, September 12, 2008

How the Supermarket Won Italy’s Hearts and Minds

A floating vegetable store in Venice.     Photo: Hans Sandberg

Trying to find a supermarket in Rome? Good luck, and while you’re searching, stop in at one of the ancient city’s many botteghas, macellerias or salumerias to pick up something to eat and drink. Old ways live on in Italy, especially in the south, which is one reason that it took so long for the supermarket to catch on.

When the first Italian supermarket opened in Milan in 1957, it came at the prodding of Nelson Rockefeller, the American capitalist philanthropist who in 1959 became mayor of New York City and in 1976 vice president to Gerald Ford. He had sponsored similar projects in Latin America that he now introduced to Milan, a stronghold for the Italian Communist Party. The idea was that “it’s hard to be a Communist with a full belly.”

“Italy had lived through two world wars, fascism, poverty, and lacked even the most important goods,” explains Emanuela Scarpellini, associate professor at the University of Milan, and an expert on the history of the Italian Supermarket. What it didn’t lack was stores, mostly small family-run stores. In 1951, there were 951,382 stores and small businesses catering to the public in Italy. 801,837 of them had only one or two employees, 198 had more than 100, while only one had more than 500. (All according to Emanuela Scarpellini’s study “Shopping American-Style: The Arrival of the Supermarket in Postwar Italy”, published in Enterprise & Society, Vol. 5 No. 4, 2004.) And with so many small shopkeepers there was a strong political base for resistance to modernization.

Emanuela Scarpellini, professor at University of
Milan.    Photo courtesy of Emanuela Scarpellini.

The old family-owned store had its charm, and usually excellent food from local producers, but the food was costly and the supply limited. Italy’s grocery sector was “a backward sector, even compared to other European countries”, says Emanuela Scarpellini. “The same was true for the department stores. We only have two national chains in the 1950’s, La Rinascente and Standa.”

A cheese vendor in Rome.                     Photo: Hans Sandberg

Besides, the country’s infrastructure was badly damaged, making it hard to build the necessary logistic and distribution networks. “The depression, the wars and the damages delayed the creation of a national market,” she says.

The American supermarket was not the only alternative to the traditional grocer. Italy already had a very large cooperative movement, which had built buyers coops and agricultural coops. Some of the largest supermarket chains in the country emerged from the cooperative movement, and are today quite common, especially in the north. The Coop group, which consists of nine regional companies, is Italy’s largest supermarket chain, with total sales of 13 billion dollars (Riccardo Lotti, Peter Mensing, and Davide Valenti in “A Cooperative Solution”, published in Strategy + Business July 17, 2006)

But the little guy didn’t go away. “The local mom-' n'-pop stores continue to play an essential role,” wrote Dana Biasetti, an expert at the U.S. Embassy in Rome in an overview published in AgExporter in October 2002.

“Italians were accustomed to small shops, and friendly relations with the shopkeeper,” says Emanuela Scarpellini. “It was part of the social tissue of everyday life. You knew the shopkeeper and he knew you. But by the end of the 1950’s, we had this idea of modernity coming from the United States. America was coming to Italy, and the supermarket was part of that. Much of this was of course an imagined America, brought on by Hollywood movies, media icons and things like that.” America was at the time seen by many as a liberator, a beacon of political freedom, modernity and material wealth.

“With the supermarket, America not only brought in a new type of technical organization, but a symbol for the end of poverty,” says Emanuela Scarpellini.

“The supermarkets had a more efficient organization, self-service, good logistics and a different relation with the producers. They could buy big quantities, and sell at a low price. It was a revolution,” she says.

“We had new and foreign brands coming in, like Coca Cola. Self-service was also very important, because for the first time, customers could touch the goods without the mediation of the shopkeeper. This changed your relation to the goods,” she says.

When growth took off in post-war Italy, people’s income went up giving them money to spend. And the supermarkets and department stores could reach them in new ways through television and TV-advertising. Small stores couldn’t afford that, and were not able to respond to the demand for new categories such as frozen food. “They simply did not have freezers and refrigerators,” she says.

A small supermarket in Montesarchio in southern Italy.
                                                           Photo: Hans Sandberg

Once the supermarkets had established their viability, they were sold to Italian investors, who built new stores and chains. Still, it took a long time for them to become popular. In the 1970’s, supermarkets had less than five percent of food retail sales, according to Emanuela Scarpellini.

“You would find supermarkets mostly in the big cities in the north, in Milan and Turin, and then in Rome and Venice. We must also take into account the fierce opposition by the small shopkeepers and their politicians, who fought this development.”

“Italy was a very decentralized culture, where the butcher and the baker was part of the local infrastructure. And local licensing laws tried to preserve this structure.”

“Political parties such as the Christian Democrats were very weary and worried about the new supermarkets, and feared that their voters would be hurt. They saw it as a question of defending the social fabric, and not only about economics. It was a social and political issue. So we heard a lot about monopolistic capitalism in the 1960’s and 1970’s.”

The relatively underdeveloped domestic Italian retail sector made it easier for French and German food retail giants such as Carrefours and Lidl to set up large new shopping centers and hypermarkets. “After the 1970’s, with the liberalization and globalization, we saw more of the international companies in Italy,” she says, adding “they became important players in 1980’s and 1990’s, especially in the north.”

A new Carrefour "hypermarket" north of Neaples.
                                                                Photo: Hans Sandberg

The international chains increased the pressure on Italy’s food manufacturers as they drove up the imports, as well as forced change and more emphasis on logistics, efficient production and production for export.

“The industry saw that this was the future, that they had to change, and compete on quality, and even price. This was an important adaptation for the Italian food industry.”

One could think that small shops would benefit from the new logistics systems or using the Internet, but the big chains have their own organizations, according to Emanuela Scarpellini. There are local or regional chains for small independent stores, but their way of competing is to “find a particular producer that can give them a special product. They try to differentiate, so that they can offer something unique,” says Emanuela Scarpellini.

“We now have the slow food movement, and many Italian producers have focused on high quality food. The food industry is becoming more important, like the fashion industry. They also contribute to selling the image of Italy.“

The modern supermarket was a response to social change, and caused its own changes.

“It brought men into the supermarket,“ says Emanuela Scarpellini. “Shopping was previously only made by women, but now men entered and took part in this activity.”

One reason for this was that women usually did not drive, and the car was essential as many supermarkets were located outside the city. The supermarkets also had an impact on women’s role in society, both as it provided new jobs for women and helped workingwomen, who could not spend as much time as before on daily shopping.

Today both the supermarket and the mom & pop store co-exist in Italy.

“Today, the supermarkets have more than 50 or 60 percent of sales. They are dominating the market, but the numbers are still lower than for other European countries. There is still an important place for small shops in Italy.”

Half a century has passed since has passed since Italy got its first supermarket. At that time, it filled a need that was deep and sometimes desperate, but still faced resistance on many levels. It won the hearts and minds of the Italians by providing a wide variety of goods at relatively low prices. Back in the 1950’s, one customer was so happy about it that she told Roland Hood, one of the supermarket pioneers, “I have written to my sister in New York and told her to vote for Mr. Rockefeller if he ever runs for Governor again.” Another said “I’m sure God has sent you Americans to do this wonderful thing for us in Italy.” Yet another was overheard saying, “just remember this next time you vote, they don’t have any of these in Russia.” (Emanuela Scarpellini, 2004, p 662)

Whether it saved the country from another revolution is, as most things are in Italy, open for debate.

Hans Sandberg

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