G.C. Murphy - Dime Store Pioneer

From the moment of its founding in 1899 until the curtain came down nearly 90 years later, the G.C Murphy Company was first and foremost one thing – an operator of variety stores. Known colloquially as “five-and-tens” or “dime stores”, variety stores were giant forces in American retailing throughout most of the 20th century. Virtually every retail chain that sells general merchandise at “less than full price”, from one end of the spectrum (Walmart) to the other (any chain with the word “dollar” in its name) can trace part of its heritage, either directly or by influence, to the variety stores.

George Clinton Murphy was a native of Indiana County, Pennsylvania, an area located about 60 miles west of Pittsburgh, known best today as the boyhood home of actor James Stewart. Born there in 1868, Murphy would leave the area as a young man to go to work for J.G. McCrorey (the “e” was soon discarded) in McCrory’s Jamestown, New York variety store, some 150 miles north of Murphy’s hometown. Not long after Murphy joined the firm, McCrory sold Sebastian Spering Kresge, a salesman who had called on his store, an interest in the firm. Murphy was put in charge of mentoring Kresge in the business, traveling with him to Memphis to help Kresge open a new McCrory-Kresge store. Obviously, Murphy did a good job of showing him the ropes, as Kresge would later go on to become one the all-time retailing legends. In early 1899, Murphy left the McCrory-Kresge firm to start up his own store in McKeesport, Pennsylvania, a town much closer in to Pittsburgh. (A few short years later, Kresge and McCrory would part ways, running their own namesake firms afterward.)

Within five years, the G.C Murphy Company would have 14 stores in the greater Pittsburgh area, all reporting to the McKeesport home base. Before long, Murphy’s ascendancy came to the attention of the then 76-store strong F.W. Woolworth organization, a company that was expanding rapidly into several major American cities (at that point mostly in the Northeast) through acquisition. In 1911, Woolworth would consolidate those many acquisitions into what would become the modern F.W. Woolworth Company, which, like S.S. Kresge Co. would become a 20th century American retailing titan. In mid-1904, Murphy sold his young chain to Woolworth, who insisted on the proviso that Murphy would not operate a five and ten cents store in their territories.

Note that the agreement said “five and ten cents store.” It did not say “five through twenty-five cents store”, which is exactly what Murphy proceeded to open, just down the block from one of his old stores that was now a Woolworth’s. Soon, Murphy’s new company had ten stores, one in downtown Pittsburgh and the rest in surrounding towns.

Tragically, Murphy would not live to see his company’s greatest successes. In 1909, he passed away suddenly at the age of 41. With no succession plan in place and a failed public offering of the stock, the company floundered for the next couple of years.

At this point, J.G. McCrory reentered the picture, at least briefly. Considering a possible buyout of the Murphy company, McCrory sent his deputy (and cousin) John Sephus “Seph” Mack to look into the possibility. Mack returned with a most enthusiastic recommendation in favor of a buyout. When McCrory balked for no apparent good reason, Mack began to formulate plans to acquire Murphy himself, enlisting the help of friend and fellow McCrory manager Walter Shaw. Of course, this would entail their resignations from McCrory, which took place in short order. In February 1911, the two men closed the deal to acquire the G.C. Murphy Company, and for the next nearly 60 years, either a Mack or a Shaw would be running the show.

Mack and Shaw had "complementary" personalities, with Mack called “the architect” and Shaw “the engineer”, according to the book “For the Love of Murphy’s”, a wonderful history of G. C. Murphy written by Jason Togyer, that serves as the source of most of the information in these Murphy posts. Mack’s hard driving personality and Shaw’s people skills made for a powerful combination that would help facilitate dramatic growth for Murphy in the ensuing years.

Murphy pursued some interesting policies that set them apart from their dime store compañeros, including the implementation of a much higher “price ceiling” in many of its stores, both literally and figuratively. As far back as the early twenties, many Murphy stores had a second floor which featured all manner of goods priced from 25 cents to a dollar, while down below the normal 5-to-10 cent price point was the rule. After some years of back-and-forth on this policy, the company was finally convinced it was a winner with customers and made it permanent, going so far as to move everything down to the main floor. By contrast, Woolworth’s price cap remained at twenty cents until 1935.

Another point that found Murphy at odds with the competition was the company’s store location strategy. Whereas Woolworth sought to establish coverage in such major markets as New York, Philadelphia and Boston, Murphy expanded their geographic base far more slowly, avoiding the “jump and backfill” approach, preferring instead to shore up their base in the industrial towns of Ohio, West Virginia and Pennsylvania, long before the “rust belt” was rusty. Despite the intervention of a major depression and then a world war, these towns came through for Murphy year after year. By the mid-30’s, with nearly 200 stores in the chain, Murphy’s average per store sales and profits were far higher than Woolworth’s.

The 1940’s saw several leadership transitions within the company. Seph Mack passed away in 1940, and the chairmanship passed to his cousin Edgar Mack. Upon his death six years later, the top job went to Walter Shaw, Seph Mack’s original partner in the business. Despite these transitions, Murphy’s continued to grow, with the average store size increasing significantly through the 40’s.

In 1951, G.C. Murphy acquired the Morris 5 & 10 Cent Stores, a Bluffton, Indiana-based chain of 71 variety stores. This proved to be an excellent move for Murphy, giving them a leadership position right out of the box in Indiana, a state that adjoined their existing market area. It was timely as well, as it provided a hedge against some major labor strikes that occurred around this time near their highly manufacturing and mining-based home turf. If there was a downside to Murphy’s store location strategy, it was a particular vulnerability to strikes, which of course affected the purchasing power of their loyal, largely working-class customer base.

Another leadership change took place in 1953, when the second generation took over. Jim Mack, son of Seph Mack, had his father’s hard driving style combined with a Harvard education, but according to the Togyer book had a presence that a number of Murphy employees found intimidating. Also Mack’s philosophy was very conservative in respects that would take their toll on Murphy over time. For example, Murphy was exceedingly slow to convert to self-service. Many of their fellow variety chains (along with most major supermarkets) had already done this, and the practice was met with overwhelming acceptance from consumers. Secondly, Mack was utterly disdainful of discounting, even banning the use of the word in Murphy’s stores. In the early 50’s this wasn’t a big problem. Ten years later, with Mack still in place, resolute and attitude unchanged, it certainly became one, given the 1960’s startlingly different retail climate.

In contrast, Mack spearheaded an interesting development for Murphy – the acquisition of several chains in the Southwest, far outside of the company’s traditional operating areas. The largest was the 1959 buyout of Morgan & Lindsey, a Monroe, Louisiana based chain of 92 variety stores in Louisiana, Texas and Arkansas. Then there were a slew of “junior department store” (along the lines of a medium-sized Penney’s, for lack of a better description) acquisitions in Texas over the next several years - Cobb’s - four stores in west Texas, Bruner’s - 28 stores in San Antonio, Morris Dept. Stores – 13 stores in Dallas, and Terry Farris, with 17 stores in McAllen, Texas, just above the Mexican border.

The latter acquisitions proved to be disastrous, due to Murphy’s lack of understanding of the nuances of the shopping culture in Texas cities, and the very different requirements of operating junior department stores as opposed to variety stores. (Wait, did I just say “nuances” and “Texas” in the same sentence? Ok, we’ll call this one a “draft”. No offense, fellow Texans!) Worse yet, many name brands that had been longtime suppliers of these chains, including such mainstays as Levi Strauss, bailed when they learned of the new ownership by Murphy. They feared that their products would somehow end up in the Murphy dime stores, as Togyer mentions in his book. Murphy elected to supply its own house brands to the stores as a replacement, including their “Big Murph” jeans (I’m really hoping there wasn’t a “Lady Murph” brand, but it takes a lot to surprise me these days!). This practice “more or less ruined (the stores)”, a former executive told Togyer.

The Morgan & Lindsey stores, being true 5-and-10’s, fared better, but there was a fair amount of animosity between longtime M & L local store operators and the McKeesport-based Murphy brass that took some years to quell. Wisely, Murphy opted to keep the Morgan & Lindsey name, probably based on their experience with the smattering of G.C. Murphy stores opened in the Southeastern states, where the company’s poor name recognition put a damper on sales.

By the late 50’s, the standard G.C. Murphy stores were well-oiled machines. Downtown stores in their core Ohio Valley and Mid-Atlantic markets continued to sustain the company. As with other “five and ten” chains, the store cafeterias, without a doubt among the most beloved aspects of the Murphy stores and the subject of some of the fondest anecdotes in the Togyer book, were a major source of profits and an all-important traffic driver for the stores.

This was especially true in the company’s “flagship” stores, a class that included gigantic G.C. Murphy stores on Fifth Avenue in downtown Pittsburgh (“Store #12”, pictured first above) and Washington, D.C. (“Store #166", located at between Twelfth and Thirteenth Streets). The Pittsburgh store, for example, took up an entire block, and was remodeled at least ten times between 1931 and 1950 according to the Togyer book. In the 1960’s, this store was the site of a number of exciting promotions, including live in-store broadcasts by local DJ’s. Also, they leased space to a “full-time” fortune teller and all manner of other sideshows. Murphy even leased out one corner of the store a meat market. By virtue of their great locations in bustling sections of town and their well-earned “ local landmark” status, these stores were excellent performers for the chain well into the 1980’s, years after the company’s other stores began to struggle.

By the early 1960’s, however, it was another story for the rank-and-file small town and suburban G.C. Murphy stores. The discounting trend was in full swing, and the greatest pinch was being felt from their direct competitors – F.W. Woolworth’s Woolco stores, and to a much greater extent, S.S. Kresge’s Kmarts. Sensing an opening wide enough to drive a (hundred-thousand square foot discount store) through, Kresge invaded Murphy’s backyard and “erected Kmarts at all four compass points around Pittsburgh”, as Togyer puts it. Did Murphy defend their turf by opening large discount stores of its own? No. Not yet, at least.

Instead, Murphy sought to redefine the variety store concept, modernizing it to fit the changing lifestyle of the 1960’s consumer. The new stores would be called “A-A” (double-a) stores, featuring upgraded lighting and signage and bolder color schemes, but most importantly would employ a radically different approach to merchandising. Departments would be reorganized into “themed groups” to create a “boutique store” feeling, as described in the Togyer book, which describes a typical department – the “Entertainment Center”, as including “not just records, radios and television sets, but books, magazines craft supplies, musical instruments, and cameras”. The A-A stores would be larger but would actually carry fewer items than the typical Murphy store, and managers were required to ax items that fell below a certain sales threshold. Also, the A-A stores would be allowed to sell at deeper discounts than the standard Murphy stores. The bold new plan caught the attention of Chain Store Age, whose December 1967 issue consisted almost entirely of Murphy coverage. The magazine’s cover photo featured Murphy’s top executives huddled around a set of A-A store concept drawings, a banner headline excitedly proclaiming “G.C. Murphy’s On the Move Again!”

By the time Murphy had converted 10 percent of its 500-plus stores to the A-A format, they realized they had a bomb on their hands. Customers resented the fact that prices were higher at regular Murphy units than at the A-A stores, causing a public relations headache. More than that, they resented the fact that their beloved Murphy store carried far “less variety” than before. Even though the A-A stores carried more stock, they had fewer individual items (in today’s retail terminology, fewer stock keeping units or “SKU’s”). Beyond this, the A-A program offered little in the way of a panacea for the hammering the company was taking at the hands of the discounters.

Sadly, it took the 1968 death of Jim Mack, Murphy’s chairman, before the company embarked on a real solution to that problem. Unbeknownst to Mack or almost anyone else in the company, plans were surreptitiously being drawn up for a Murphy-owned discount concept. The very day after Mack’s passing, according to the Togyer book, the discount store plans came out of the drawer. The battle was about to be joined.

These are vintage G.C. Murphy publicity shots. First up is Store #12, the downtown Pittsburgh flagship, circa Christmastime 1973. Originally opened in 1930, the store was wrapped in the pictured “handsome streamlined façade” sometime in the late 40’s/early 50’s. The second photo, from 1968, shows the Annandale, Virginia store with an arcade-style facade that brings to mind some of the Memco stores that would open not far from there a few years later. Third, also from 1968, is a more conventional store from Beckley, West Virginia. Fourth, from 1973, a beautiful store with a fine colonial look from the quaint western Pennsylvania borough of Ligonier. Fifth, 1973 as well, is the interior entrance of the Monroeville, Pennsylvania store, a very inviting sight indeed. With fresh popcorn and pretzels beckoning, this one would have been hard to pass by. For sure, they knew what they were doing!

Pictured below, in 1968-dated photos, are two interior scenes from Murphy’s new “A-A” stores. The A-A concept may not have flown, but in my opinion, the designs represent a very nice updating of the variety store idea, and I particularly like the abovementioned lighting, bolder colors and modern (for the time) signage font. Immediately below is the wonderful candy department, scales at the ready.

Last is the “Entertainment Center” section, where I would have been guaranteed to waste a great deal of time. Portable record players were obviously a hot item (Sure hope the 45 adapters were built in!), and the white-framed portable television sets bring back memories. These rarely had remote control units, and I don’t believe that my family owned a TV with remote control until I was at least in high school. The silver lining to this was it gave people like me a great “hardship story” to use in the future – the modern-day version of Grandma and Grandpa’s “trudging through the snow for five miles to school every day, in worn-out shoes, uphill both ways” kind of thing. For me, it’s “Whenever we wanted to change the channel, we had to actually get up and go do it! It was horrible! You guys don’t know how lucky you are!” My kids shudder.

Then of course there was the records section, the main attraction for me from about age seven on. I’ve spent a good bit of time squinting at this photo trying to identify the album covers. (My personal area of expertise is covers of the 1970’s and 80’s, but I’m reasonably competent with the few years before and after that range. It’s too bad I couldn’t have minored in this in college – my GPA would have been greatly enhanced!) I’m embarrassed to say I’ve only been to call one so far, but it’s a great one – the 1968 blockbuster “Johnny Cash at Folsom Prison”, fourth album from the far left on the top row. I’ve been a Cash fan for years - he was an artist who refused to ever let himself be bracketed. And much of his best work was done in the last ten years of his career, an enviable feat. If anyone can squint harder than me, let me know if you figure any of the other covers out!