Stagnant Middle Class?

(Don Boudreaux)

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According to a January 2014 Consumer Reports article, citing figures from the Food Marketing Institute, the average supermarket had fewer than nine thousand items in 1975.  By 2008, that number had quintupled.

So reports Michael Ruhlman (on page 31 of his 2017 book, Grocery: The Buying and Selling of Food in America.)

Not doubled.  Not tripled.  Not quadrupled.  Quintupled.  Quintupled – in a mere one-third of a century.  The number of items today offered for sale to ordinary Americans in that most emblematic of modern bourgeois commercial institutions, the average supermarket, is five time greater than it was at that point in American history when, secular preachers insist, ordinary Americans’ standard of living hit its peak and has ever since remained stuck.

Obviously, a larger selection of items in the typical supermarket is itself a source of greater material prosperity for ordinary Americans.  But let’s probe more deeply.  What inspired entrepreneurs and businesses to quintuple the number of items they offer daily to ordinary Americans in average American supermarkets?  Is not this quintupling itself not only a part of the source of ordinary Americans’ rising prosperity, but also evidence of this rising prosperity?  If the spending power of American households has not increased since the Oval Office’s chief honcho was Gerald Ford, what led entrepreneurs and businesses since then to compete so vigorously that one result is a quintupling of the average supermarket’s offerings?  Surely a supermarket in 2017 that is stocked identically to an average 1975 American supermarket would have much lower operating costs than the typical 2017 American supermarket.  The mid-70s throwback supermarket’s physical space would be smaller and its inventory management much less complex.  (My vivid memories from that era – when, by the way, I worked for a while, during my student days, in supermarkets – tell me also that the 1970s supermarket was a somewhat dirtier, dingier, and more cramped establishment than is the average 2017 supermarket.)

Such a throwback supermarket – should one be opened to the public today in Seattle or Saginaw or Sarasota – could sell its canned vegetables, its chuck roasts, its paper towels, its toothpaste, and each of its other roughly 9,000 items at lower prices than can a 2017 Albertsons or Safeway (especially if this throwback store could secure inventories of items that are themselves of the same quality that was prevalent in 1975).  And yet market forces in 2017 America do not seem to be selecting for mid-70s-quality supermarkets.  Quite the contrary.  The great improvement in food retailing in America strongly suggests that the average American supermarket’s customers in 2017 – namely, average Americans – are substantially wealthier than were their counterparts of 40 or so years ago.