Sol Price - The Founder of FedMart

Taking a brief detour from our current story to honor a true retail pioneer. It has been my plan to do a set of posts on FedMart early in the New Year, but I wanted to make note of the passing of Sol Price this past Monday at the age of 93.

Price is probably best known as the founder of Price Club, a San Diego-based chain of stores that pioneered the membership warehouse store concept in 1976. In 1993, Price merged his company with another firm to form Price Costco, forerunner of the modern day Costco, an unabashed retail success.

A year later, Price left the company to run a new venture, PriceSmart, from a group of stores spun off in the merger. PriceSmart continues to operate warehouse stores in Central and South America and in the Caribbean Islands.

But before all of that, there was FedMart. Founded in 1954, FedMart was Price’s original retail concept – a no frills, low overhead discount chain that eventually grew to some 40 units, located mostly in Southern California and Texas. FedMart was sold to a German firm in 1975 and folded seven years later.

Price’s legacy lives on, not only in the two membership store chains he was directly connected with, but in another very significant one – no one, with the possible exception of Harry Cunningham, the “father of Kmart”, had a greater influence on Walmart founder Sam Walton. Walton was an enthusiastic student of Price’s merchandising and cost control methods. And Sam’s Club, Walmart’s membership warehouse banner, started out as largely a knockoff of Price Club - as Walton admitted in his best-selling autobiography.

Even today the influence is felt – take a good look at the logo on the pictured store (the location of which I would love to know), circa early 1970’s.

From everything I’ve read about Price, it’s clear that he was a man of inventiveness, and above all, integrity. He will be missed.

Thanks to the several readers who identified this store location for us - on Harbor Boulevard at the Chapman Avenue intersection in Garden Grove, just down the street from The Happiest Place on Earth. It is now a Target store.

Vornado to the West

The old adage “Go West, young man” has applied for generations not only to people but to businesses as well. For many retail chains, once they achieved a measure of success in their home markets, becoming a coast-to-coast operation became their burning goal. Oftentimes, as history has shown time and time again, this has proven to be extremely difficult to achieve. By the mid 1960’s the Two Guys department store chain was a dominant force throughout its geographic market, and their parent company, Vornado, Inc., was ready to make their move.

In July 1967, Vornado announced its intention to merge with Southern California-based Food Giant Markets, Inc. Only ten years had passed since Food Giant’s founding, and by that time the chain had grown to include 69 supermarkets, 14 Unimart membership discount stores, and 14 Builders Emporium home centers. Food Giant also owned Meyenberg Milk Products and its subsidiary, Foster’s Freeze, a 200-plus store franchised ice cream shop operation. The existing Food Giant management remained in place, with their top two executives taking seats on Vornado’s board.

Almost immediately, there were problems. Profits from the new West Coast operation were less than expected, creating a drag on the entire company. Trading stamps were dropped in favor of a discount pricing approach, offending many loyal customers. Well known local brands were replaced with those from the Two Guys stores, which of course were largely unfamiliar to California customers. Steps were taken to correct the problem, including replacement of the Food Giant leadership with Vornado veterans from New Jersey. At the same time, changes were made to the Unimart stores, including dropping furniture lines (yet curiously adding carpet departments), and remerchandising along the lines of the Two Guys approach. New Unimart units constructed by Vornado would be of a much larger footprint, another similarity to Two Guys. Eventually, even the Unimart name would be discarded in favor of the name “Two Guys”.

Ultimately, these measures fell short, leading to a decision to sell the supermarkets to various buyers in the very early seventies. Vornado’s West Coast discount stores were sold to Fed-Mart in 1977.

The photos above are of a typical Food Giant and Unimart as they appeared at the time of the 1967 buyout.