The Year of Conversion

By Jack F. Pomeroy, Executive Vice President Lumber Merchants Association of Northern California

1949 u'as a )'ear of conversion for many of Northern California's retail lumber and building materials distributors. Conversion in many \\rays: from a period of easy sales to rugged competitivc c,rnditions; from a period of satisfactory profits to one u,here a determined effort rvas needecl to stay on the profit sicle of the ledger; a period for their vendors and thenrselves of conversion from a sellers market rvhere availability of material u'as the determination of sales to a buyers market rvhere service. pricc and that illusive son.rethir.rg called salesmanship ruled; to a period *'herc merchandising and salesmanship are king.

1949 was a year of fluctuations. As items came off the shortage list many of them slipped over into the temporary "surplus" column. The period of supply adjustment was painful in many instances. Prices dipped and srvung 'ivildly. In some instances this 'ivas due to the inflated levels of the commodities; in others it resulted from a u'ilcl l-rysteria developed 'ivhen everyone along the distributiorr line found hirnself encumbered u'ith a high priced inventorv in a period of falling prices rvithout an aggressive selling program to move it. Items changed from the shortage category, to surplus then back to "temporary" shortage. As the year ends most commodities are in fair "supplv and demand" belance.

1949 rvas the year rvhen the careless habits accumulatecl ir-r eight r'var and post rvar years were first looked at 'rvith some tolerance, then critically and finally attackecl rvith vigor. The retail lumber and building materials industry is moving into 1950 a slimmer, cleaner, rnore aggrcssive, more contributory, and a better segment of our national economic life. These changes were occurring, surprisingly cnough, rvhile the general unit volume of business wAs holding very near the record 1948 level. Flow of business t'as not coml>arable to the evenness of that in 1948. Each area had its fluctuations during the year. One area rvottlcl be booming t'hile anotirer a comparatively short distance a\\'ay was in a minor slump. A short time later the situations rvould be reversed. Even yards in the same tolvn 'rvould be at opposite ends of the pendulum srving at the same time. A11 in all 1949 was a year in rvhich the retail anrl building materials industry u'as stripping rvaste, itrefficiency, and order taking and preparing for action in a normal competitive market. i950 promises a continuation of the reign of salesmanship and merchandising. Unit volume of business in the first half of the 1'ear should be good through the momentum carry over from this fall. Thereafter a uumber of present indeterminates rvill divide the general picturc irr Northern California:

1. The general economic Picture;

2. The effect of public housing on the availability and distribution of materials and labor;

3. A liberalization of FHA or a ne'w home cy;

4. A continttation of thc in.rmigration into loar.ring agenCalifornia; loans to vet- retailers rvill be "order-

5. The effect of the nerv policy on State erans.

Over all, one fact rvill become apparent. The n.ho are merchandising in addition to distributing faring far better than those rvho insist on remaining takers."