French Revolution

The seeds of a new French revolution were being sown last week in a small shop near the Arc de Triomphe. There, crowds of customers were enthusiastically shopping in France's first discount house, with prices of refrigerators, toasters and all other goods cut a flat 20% under prices fixed by manufacturers and retailers. In two or three days, the yellow-fronted shop did as much business as others in the neighborhood handled in a year.

The man who opened the store and set out singlehanded to revolutionize France's noncompetitive retailing system is Maurice Gattegno, 47. Until two years ago Discounter Gattegno was a small shopkeeper in a nation of small shopkeepers (one to every 43 consumers), most of whom have no employees, gross less than $5,000 a year, and keep two sets of books --one for themselves, one for the tax collector. Firm believers in high, fixed prices and low turnover, many sell only three shirts or two pairs of shoes a day, heartily approve the traditional cartel-mindedness of French manufacturers.

"American Plague." Gattegno, who owned a small camera shop, was made of more imaginative stuff. Visiting Manhattan in 1954, he was amazed by midtown discount houses. "It struck me that France was living in the past," said he, and he sailed home to try the discounters' methods in his own sleepy shop.

Customers poured in. To handle a daily turnover that increased a hundredfold, Gattegno took on 20 employees at wages remarkable for France: $250 a month for salesmen, $225 for the lowliest packer--more than three times the going rate. The first year Gattegno grossed $714,000. Moreover, said he proudly: "I pay my full taxes. I don't have two sets of books."

The howls against Discounter Gattegno's "American plague" were just as vehement as those hurled at his American counterparts. Sternly calling on manufacturers to boycott his booming business, French retail-trade papers scornfully labeled him "Monsieur 20%." Virtually the entire Paris press, fearful of losing regular accounts, refused his advertising. Thomson-Houston, the big French equivalent of General Electric, refused to sell him its appliances.

Friends & Enemies. But smaller manufacturers, though publicly outraged, kept right on selling to Gattegno for the compelling reason that he pays cash, buys ten times more than his competitors (although they usually ask him to keep their transactions secret). And through Gattegno's own throwaway newspaper, Moins Cher (cheaper), Parisians heard and spread the word to 12,000 new customers last year alone, while the French government hinted that credit is surely possible for a man who understands so well how to cut the cost of living.

Discounter Gattegno,who grossed about $1,500,000 last year, plans to open a new American-style supermarket this spring with three floors of food, appliances and clothing, smack in the heart of the poor people's Paris near Gare St.-Lazare. Its name: Chez Monsieur 20%. Says he: "I will make new enemies among French retailers. But what interests me are the customers. They are my friends."

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