Shopping at Giant Foods: Chinese American Supermarkets in Northern California

5 / Decline and Passing

5 / Decline and Passing t h e d e c l i n e a n d p a s s i n g of Chinese American supermarkets did not come without foreboding signs. Some operators were astute, saw the portentous “handwriting on the wall,” and got out of the business while they could still profit favorably from selling their supermarkets. Some were blinded by past success and ignored the need to adapt to the rapid changes around them to remain competitive. Quite possibly, they thought that they did not need to adapt. Then there were those in between who were aware of new developments, but were unable or unwilling to do anything about them. They fathomed that the end was coming and milked the business for all the profits they could before facing an undetermined departure. The passing started in the early 1960s with the gradual decline in business of many first-generation supermarkets. Competition from new Chinese American supermarkets encroaching on their markets was a major agent, but disintegration of harmony among partners and between employers and employees was also a principal factor. These rupturing forces came at a time when owners were becoming increasingly weary and indifferent about operating a demanding business after years of hard work. Amid external challenges and internal conflicts, many simply closed their doors. The competitiveness of second-generation supermarkets started declining in the mid-1970s. National companies began making inroads into local markets, supermarkets became increasingly expensive and complex to operate , and labor unions were determined to exercise their strength. Some operators were fortunate enough to sell their supermarkets, usually one by one at distressed prices to enterprising buyers who thought that with plenty of hard work and perseverance they could squeeze a profit or build up the business . Others, not able to find buyers, ceased business, sold their inventories and equipment, and leased their buildings to tenants who used them for purposes other than selling groceries. A few operators barely kept up with the 96 trends but weathered the vicissitudes of the market. Ultimately, a small number of single-store operators were able to carve out niche businesses. The owners of the last supermarket chain, however, sold all their stores to a competitor. By the end of the century, all the prominent Chinese American supermarkets were no longer in business, but their passing did not occur before their owners attained financial security for themselves. famous food markets The decline of the first-generation supermarkets was rooted in large part in the owners’ business strategy, which turned out to be inherently weak and fleeting. As discussed earlier, they drew shoppers into their stores with advertised sale prices that were lower than those of their competitors. These “loss leaders” were sold at cost or at a small loss, but they attracted large numbers of shoppers. The strategy was profitable as long as shoppers purchased nonsale merchandise in addition to the sale merchandise, rendering a profit for the stores. Also, this strategy worked only in conjunction with low-cost labor, which enabled operators to minimize losses and make a profit. In the long run,thestrategycouldnotbesustainedbecauseshopperspatronizedthestores primarily for the low sale prices. Shoppers became conditioned to look for advertised sale items, went to stores that offered them, and bought only sale items. Some shoppers stocked up on them. It was not unusual to see housewives who weekly went from one store to the next to stock up on sale items. These “cherry pickers” did not buy anything else, let alone become regular customers.1 Regular customers usually patronized those stores that were conveniently located. That same reason was why shoppers from outside the neighborhood generally did not switch from shopping regularly at their own local stores. Until the early 1960s, the Famous Food Markets dominated their local markets because there was little if any competition nearby. Their good sales volumes and the potential for more, however, attracted other supermarkets to open in the same neighborhoods. The most formidable competitors were larger Chinese American supermarkets, like the rapidly expanding Farmers Markets. Like Famous Food Markets, the new competition advertised weekly “loss leaders” to draw in customers. The new supermarkets were outfitted with up-to-date equipment and amenities, much like the older supermarkets had been when they opened a decade or more earlier. Because many of the shoppers who were drawn to the new supermarkets or to Famous Food Markets did not have any loyalty to either group...