Sellers of Butter

With their fattest year since 1930 digested, 4,500 U. S. retailers last week gathered in Manhattan to get a taste of things to come. It was the 30th annual convention of the National Retail Dry Goods Association, most potent of all retail groups. Last year its 5,700 member stores sold $4,500,000,000 worth of goods more than 15% of all U. S. retail sales. President Frank McConnell Mayfield’s keynote was grim. Said he: “. . . the waving of flags and singing of God Bless America will not solve the problem. . . . The principal concern of retailing as it faces a New Year is to further the progress of national rearmament. . . .”

A few pre-Defense topics survived the regimental atmosphere. N. A. M.’s hard-working ex-president Henning Prentis Jr. attacked N. A. M.’s old bogey, “the juggernaut of collectivism.” N. R. D. G. A. counsel Irving Fox discussed the Wagner Act, said retailers might soon have real union trouble (“the noose is slowly . . . tightening”). Other topics: “Has Your Store A Personality?,” ” ‘Quickie Bars’ for Hasty Patrons,” “Dermatitis from Wearing Apparel.” The delegates authorized a committee to raise funds for destitute British drapers.

But their real problem was Defense. Retailing, they knew, would be the first salient in the as-yet-undrawn line between guns & butter in a war economy. They are in the butter business; how would it fare in 1941?

Up rose the Office of Production Management’s Director of Purchasing, ex-Sears, Roebuck executive Donald Marr Nelson. Warned he: “When the Defense Program was first undertaken the general policy was to superimpose [it] on the normal requirements for the civilian population. . . . The Defense Program has now, however, passed into the second stage. . . . [It] can no longer be superimposed. . . . If it is possible to produce what we need and still take care of our business as usual, that, of course, is what I want to do, but we must have the defense material regardless.”

Less official, but more detailed was the warning of Harvard’s Professor of Marketing Malcolm Perrine McNair. Reviewing the ABCs of war economics, Professor McNair said: 1) That the U. S. national income will continue to rise in 1941, and the production and sale of consumer goods will rise with it; 2) but some consumer industries will be curtailed for the sake of war production because “we do not dare wait”; 3) the consequent postponement of some consumer-goods demand will make a handy cushion for the post-Defense collapse; 4) but price inflation can only be controlled by increased taxes on and borrowing from the middle class, thus cutting down its consumption and making it Defense Victim No. 1; 5) retailers, though they will get more business in 1941, will have to take shorter markups. Best off will be those catering to wage earners, low-income groups.

From Alexander Pollock, General Manager of Montreal’s Henry Morgan & Co., Ltd., came front-line support for McNair’s prognosis. He said that while retail sales in Canada had increased 12% in 1940, profits had become “very much less,” that “mark-on [i.e. markup] is becoming more and more difficult to maintain.” Some Canadian retailers have had to hire 50% more employes to take the place of experienced help drafted.

After three days and some 125 speeches the delegates marched into their annual banquet to the tune of Don’t Give Up the Ship, sat down to hear Rear Admiral Clark Howell Woodward report on the naval expansion program. For dessert they got strawberries and ice cream. Its menu name: “Bombe Américaine.”