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Speaker – Colin Hinton - ‘What’s Happened to Supermarkets’

Colin Hinton is a member of the Club and he gave a fascinating talk on the history of the supermarket chain founded by his great grandfather, Amos. As it prospered, his two sons joined the company in 1892 and 1898. Colin’s father started work in the business in the 1920s. Colin started work helping in the bakery, injecting jelly into pork pies. After National Service, he worked for 2 years at the Leeds Bakery School, 3 months in Lucerne followed by spells in Liverpool and London, before joining the family firm on a permanent basis.

Amos Hinton was the son of a miller in Tring. He was a committed Methodist and a teetotaller. He was a successful businessman and a risk taker. He knew what the customer wanted. At the age of 13, he started work in a grocer’s shop cleaning raisins. After a short spell in Batley, Amos moved to Middlesbrough in February 1862 to work for a journeyman grocer, John Birks, a Wesleyan preacher, in South Street.

At the time, Middlesbrough was expanding very rapidly because of its importance in the manufacture of iron and steel. The town grew from a population of 25 in 1801 to 19,000 in1862, when Amos arrived, to 39,000 in 1871. This expansion continued with the population rising to 98,000 by 1898 and 158,000 in 1968, the last census in which the town was included as an entity. This rapid growth created a great opportunity.

In 1865, with John Birks’ encouragement, he went to work as a butterhand in Shoreditch and later as a baconhand. In September 1866, Amos returned to Middlesbrough to take charge of the South Street store. In 1868, he went into partnership with Birks and this gave him the security to marry his sweetheart from Tring. In 1871, following the death of John Birks, Amos took over the business. He worked long and hard with shop hours typically of 08.00-20.00 Monday to Thursday, 08.00-21.00 on Friday and 08.00 until midnight on Saturday. In 1881, this was reduced when the half-day week became compulsory.

In 1883, the company opened stores in South Bank and Corporation Road, which is now the HSBC on the corner of Albert Road. The company prospered with the town and the outbreak of the two World Wars created more demand for steel. However, some of the first half of the last century saw hard times too. In the 1930s, the staff were asked to accept a reduction in wages and in the late 1940s, rationing created major problems for the business.

In the 1950s, self-service started in the USA. A combination of increased car use by customer and rising staff wages drove this change in Britain too. The company was very interested in the developments in the US and, in 1954, the Darlington branch became the first Hintons store to be self-service. This was the first grocery store to make the change in the North East. Following its success, 12 further stores converted. After 1960, all new stores
opened by the group were self-service.

The change freed up space, because stock was now held in the sales area rather than in a storeroom. The introduction of freezers and bulk packs led to further big changes. Out of town superstores and hypermarkets started in the US, leading to town centres suffering. Great Britain followed the same path.

Jack Cohen, the founder of Tesco, successfully lobbied for the abolition of Retail Price Maintenance in 1964. Until then, manufacturers controlled shop prices, a major issue for retailers. This was a huge change. Also in the 1960s, stores started to build their own distribution centres. This enabled them to regain control of their stocks from suppliers who had hitherto delivered direct to the stores in quantities they had recommended to managers.

Until the 1960s, only groceries were sold. The change to stocking general merchandise and the introduction of barcodes, which provided sale information and facilitated reordering, were major developments in the decade. The latter led to the product range being controlled by Head Office, with the store manager becoming responsible mainly for personnel and security.

In 1968, Hintons became a public company, but it developed into a size which was too small to compete in the marketplace but too big for a local chain. In 1984, it was taken over by Presto who wanted the selling space and its advanced computer system. The Hintons senior management and Head Office staff were made redundant. The Presto stores were renamed Safeway some years later and they were in turn, taken over by Morrisons. Of the leading companies, now only Morrisons and Asda are based in the North, although Asda is a
subsidiary of the U.S. based Walmart.

The race to get bigger led to larger stores with a wider range of goods including fresh food. This led to the demise of many high street butchers, greengrocers and dairy stores. Recently, the explosion of internet shopping has resulted in many of these large stores becoming superfluous. Home deliveries have an echo from the past, when Hintons operated a delivery service. Then a traveller would visit a customer and a delivery would follow a few days later. This stopped in 1965 in a move to encourage shoppers to visit stores and to end
the troublesome credit system. Today, the cost of fuel and large stores put shoppers off
travelling to shop. Smaller stores have become popular again, particularly for those who do
their bulk shopping online.

Another change is the rise of discounters offering a limited range. Aldi and Lidl concentrate on the 20% of goods which form 80% of the turnover of their larger competitors. They are paid by the customer before they pay their suppliers and use this cashflow to increase their market share by lowering prices. They are now introducing fresh foods to encourage loyalty and they have mounted very effective advertising campaigns. They have caught the Big Four out – they have too many stores, sales are falling and they are perceived to be not
looking after their customers. Tesco in particular, concentrated on the commercial side of the business and were aggressive in their accounting practices. A targets and bonus culture made a fall in sales very painful. This was made worse by large writedowns on the value of their property. Tesco have been the worst affected, but all the large supermarket groups have suffered.

In reply to questions, Colin was of the view that Aldi and Lidl will increase their prices when they have grown their market shares. Shoppers have gone back to basics. Farm shops are now very successful. Change continues with the popularity of chilled ready meals and specialist foods e.g. gluten free. He thought that one of the Big Four is likely to disappear in the next few years. Niche operators like Marks & Spencer and Waitrose will always be successful in selling quality at a higher price.