OCR Interpretation

Montana farmer-stockman. [volume] (Great Falls, Mont.) 1947-1993, June 01, 1950, Image 2

Image and text provided by Montana Historical Society; Helena, MT

Persistent link: https://chroniclingamerica.loc.gov/lccn/sn86075096/1950-06-01/ed-1/seq-2/

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How much
of the Food Dollar goes
the questions
When discussing the costs of food distribution, people sometimes assume
that the whole of such costs, or a major part of them, are run up by retailing .
Charts which show the farmer's share of the food dollar spent by eus
*° merS aS ^—and label the other S0( as " distribution"—do not make it
plain that retailing is just one of many costs paid^aut of the food dollar,
k c>
This 50# total cost called distribution also includes charges for storage
said freight, for grading, cleaning, processing, packing and wholesaling.
Further, this SO# is an average for all farm crops. Actually the farmer's
share varies widely between different crops, depending on the amount of
processing and other services required. But on the basis of this **average
food dollar, let's look at Safeway costs...
Q What part of the food dollar is spent
by Safeway to do the retailer job?
A Less than 14*. Yes, to cover all our
costs from the time we put farmers' prod
ucts in our stores until we sell them to cus
tomers, it takes less than 14* out of every
Hollar spent in our stores. This 14* pays
our day-to-day retail costs — such costs
as wages, rents, taxes, displaying food
attractively, and inviting the public with
advertising to come and buy. This 14*
also includes a profit for Safeway.
Q How much profit does Safeway earn?
A Safeway'» profit in 1949 was IVj*
per dollar of food sales at our stores. All
our costs of doing a retail business, plus
a profit, total less than 14*.
Q Is this 14/ out of each dollar of
Safeway sales smaller than the aver
age costs for these same functions?
A Yes, 14* is a considerably smaller than
average retailing cost, because Safeway
iwlM s Month, » the lirt snd Uth. hr The M.nUu Far mer. Inc.
Mont. Entered M seeend els«« Matter st the Foitoffire st Crest Falls,
handles and sells more food per store and
per employee. Safeway's system is one of
low cost distribution of food. The effi
ciency of this system allows Safeway to
return to farmers both more total dollars
and. a larger share of each food 'dollar ,
Q la this 14/ per dollar of sale* more—
or leu—than Safeway has operated
for in the past?
A Less. The part of the food dollar for
which Safeway performs its services is
lower now than it was 10 years ago. Of
course, the dollar volume of our sales is
larger now, due in part to increased food
prices. But our labor and other costs hava
climbed .even more sharply, requiring us
to seek constantly new ways to operate
more efficiently. With total population and
per capita food consumption both larger
than in 1940... we can do our job today
for a smaller share of more dollars from
more customers.
The Safeway idea of selling more food
per store and per employee isn't ours
alone. Wc are in free competition with
many stores working toward the same end.
It seems to us that is good for every
body—for farmer, customer and store man
alike. We invite you to test our ideas of how
a store should be run by doing your food
shopping at Safeway, where almost one
fifth of all customers arc farm families.

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