Business Must Follow The Dollar
THE enormous growth of the U.S. population has meant vast new markets in everything from baby carriages to washing machines and wrist watches. Will every retailer cash in on the bonanza? Not at all. The reason is that since 1940, almost half of the 28 million national population increase has taken place in residential suburban areas, anywhere from ten to 40 miles away from traditional big-city shopping centers. Thus, to win the new customers' dollars, merchants will have to follow the flight to the suburbs.
In the ten years from 1940 to 1950, St. Louis' suburbs grew 48% while the city itself added only 6% to its population. In the same period, Philadelphia's suburbs expanded twice as fast, Boston's eight times as fast, as their already-crowded metropolitan districts. The numbers tell only part of the story. Suburbia offers not only more new customers but better customers. Suburban families are younger and have more children, thus are potentially bigger spenders than city families. Average income in the suburbs is estimated at $6,500 a year, fully 70% higher than that of the average U.S. family.
The do-it-yourself life in suburbia has also opened up a vast new market. Power-lawnmower sales, for example, shot from 42,000 (worth $5,000,000) in 1940 to 1,275,000 (worth $144.5 million) last year. Home-freezer sales zoomed from 210,000 (worth $80 million) to 1,200,000 (worth $480 million) in just seven years. Papa, puttering around in the basement, spent $150 million on power tools in 1953, and a grand total of nearly $3 billion for all his home carpentry work. Many big department stores are already taking advantage of suburbia's cash and energy, stock hundreds of items in suburban branches that would look out of place in their city stores.
The huge shopping center, surrounded by wide parking lots, has done much to build the new markets. There are already 93 such centers around the 20 largest U.S. cities, and at least 25 more on the drawing boards. The investments run high—$20 million at Chicago's Park Forest suburban development, $30 million at San Francisco's Stonestown, $100 million at Los Angeles' Lakewood. And an increasing number of big city department and specialty stores, sensing the trend, are building their own suburban branches.
The growth of suburbia has changed the pattern of U.S. retail trade so much that only a relatively few new stores have gone up in the center of big cities in recent years. Even the old, established stores are feeling the competition from the suburbs. In Boston, retail trade increased 275% faster in the suburbs than in the city in the last two decades, while in Detroit, the J. L. Hudson Co. expects to lose fully 15% of its business to its new store in its suburban shopping center. To combat such losses, downtown businessmen are offering special lures to shoppers. They hand out cut-rate bus and streetcar tokens, even carry suburbanites to & fro in special buses.