Economic Influencers of Tennessee

*This blog post is not concerned specifically with my ancestors or relatives, but rather the state and southern region in which they lived and labored.*

 

The early twentieth century produced new innovations in industry, agriculture, and retail. The first decades of the century saw the shift from a majority rural population to a majority urban population. [1] The growing towns and cities meant a larger number of citizens who needed to purchase food items. It also meant a wider variety of food that people desired to buy from local markets. Grocers and general merchandise store operators of the early twentieth century typically did the shopping for their customers, who would simply hand the clerk a list of needed items. Prices were not usually labeled, so one item may be given at a different price for two different people. 

 

In 1916, a young man named Clarence Saunders revolutionized the way grocery stores were structured. Moving from Clarksville, Tennessee, to Memphis, and working as a grocery clerk in several different stores, Saunders noticed the dwindling profit margin available to grocery owners because of the labor charges they were paying to clerks. He also realized that only one client was being served at a time, cutting into possible profits. Saunders decided to try a different approach with the grocery store layout and shopping structure. The grocer opened up a new retail grocery store that he named “King Piggly Wiggly,” the first store in the Piggly Wiggly Grocery store chain. The shopper was welcomed to the store by two turnstiles and rows of assorted canned and fresh food items, which they were free to choose and pick out on their own. They were then allowed to check out, although the store instituted a “cash only” rule, eliminating the loss of profit by allowing credit charge accounts.[2] Saunders called this the “cash and carry policy.”[3]

 

 

Saunders also changed the grocery industry by heavily marketing his stores. He wanted the Piggly Wiggly chains to be a household name, and carried popular brands and products, arranged in a way to maximize client interest in such products. This encouraged popular brands to clean up their own marketing campaigns. Saunders also engaged in outlandish promotions and entertainment events to encourage productivity. The year that he opened his first store he also advertised in a local newspaper that a beauty contest would be happening the following Saturday in his store, which led to a greater crowd that day.[4]

 

 

 Saunders further affected grocer and retail economics by lowering the prices within the store. Mike Freeman explains, “His self-service store required fewer employees than the traditional grocery store. That allowed Saunders to operate at a cheaper cost, saving him money. He wisely passed on this savings to the customer in the form of lower prices.”[5] Hence, Piggly Wiggly quickly earned the reputation for offering the lowest grocery prices in town.

 

By 1917, Saunders had applied for one of several patents for his design and organization of the grocery store. “1923, only seven years after he opened his first store, Clarence Saunders owned 1,268 Piggly Wiggly stores which sold $100 million in groceries. Saunders was a very rich man by the early 1920s. However, he also had a penchant for buying expensive items, big and small, demonstrated in the construction of his “Pink Palace.” Saunders also attempted to purchase a majority share of his company’s stocks after he allowed Piggly Wiggly to go public. According to Freeman, “To this day, his corner was the last corner recognized by the New York Stock Exchange.”[6]

 

Saunders was left financially crippled, and in 1924 he declared bankruptcy. His shareholders had forced him out of the business, but Saunders did win a legal suit to create a new grocery store chain in competition with Piggly Wiggly. Although his new chain, known as the Sole Owner stores because one judge supposedly informed Clarence Saunders that the only thing he was the sole owner of was his name, did relative well, it did not franchise to the degree that Piggly Wiggly did. Right as the stores began to thrive in the late 1920s, the Great Depression hit, deeply affecting the grocery store retail industry. Between a growing mountain of debt, and the struggle of the Depression, Saunders declared bankruptcy once more and closed his Sole Owner stores in 1933.

 

Saunders died of heart failure in 1953, and he seemed to leave behind no tangible legacy. However, his determination as an entrepreneur created a lasting concept that continues to this day. An article in The Economist has this to say about Clarence Saunders’ legacy, “As a business, Piggly Wiggly is now a shadow of its former self; it has only about 600 stores in 17 American states. But as an idea, it has conquered the world.”[7]

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[1] Census History Staff, “Urban and Rural Areas,” U.S. Census Bureau, Dec. 8, 2021, https://www.census.gov/history/www/programs/geography/urban_and_rural_areas.html.

[2] Scarlet Miles, “Piggly Wiggly Supermarkets,” Tennessee Encyclopedia, Tennessee Historical Society (Oct. 2017).

[3] Ibid.

[4] Clarence Saunders, “Piggly Wiggly, The Most Beautiful Girl in the World,” Memphis News-Scimittar (Sept. 5, 1916).

[5] Mike Freeman, “Clarence Saunders: The Piggly Wiggly Man,” Tennessee Historical Quarterly 51, no. 3 (1992): 161–69.

[6] Ibid.

[7] "The Piggly Wiggly way; Schumpeter." The Economist, May 9, 2015, 64(US). Gale In Context: Biography (accessed April 8, 2022).