Price Club Aptly Named

Word came yesterday of the death of Sol Price, one of the titans of the retail industry. The 93-year-old genius was the originator of the warehouse wholesale club concept and an able practitioner of the supercenter format that combined a full-line discount store with a full-line supermarket.

Along with James Cash Penney, perhaps no executive enjoyed a name better suited to retailing.

Price was part of a team that founded FedMart in 1953 in San Diego. California had a history of membership-only retail stores. In its early life, FedMart adhered to that policy, but its more lasting claim to fame was incorporation of a discount store and supermarket under one roof. Today’s supercenters are outgrowths of FedMart.

Of course, having an idea is no guarantee of continued success. FedMart was successful under Price’s leadership, so much so that it attracted an international suitor. But shortly after Price and his cohorts sold FedMart to German retailer Hugo Mann in 1975, Price was dumped by the company. FedMart then started a slide that could not be reversed.

Though he was near 60 years old when fired, Price plunged back into retailing. In June 1976, he opened the first Price Club, known now after a series of mergers as Costco. Price’s original idea was to make his club a resource for small businessmen, providing them products at prices below those charged by larger wholesalers. He’d sell to them at discounts big companies could demand and command from suppliers. It was only after one of his customers suggested that he open his club up to the customer’s employees (they’re checks were as good as his, he was said to have told Price), that Price Club exchanged red ink for black and forever changed retail history.

I never had the opportunity to meet Sol Price, but I did sneak into that first club on Morena Boulevard in San Diego at the suggestion of Sam Walton. Sam and I had been talking at the end of a cocktail reception at the Town & Country Resort in San Diego where the discount store association was holding its 1981 annual convention. Sam asked me what I thought of Price Club. I shamefully had to admit I had not seen it. He said it was one of the more intriguing retail ideas he had ever seen.

So the next day I “attached” myself to a family as they entered the membership-only warehouse club. I was, to say the least, overwhelmed. I wanted one of these playgrounds in my back yard, but had to wait until 1992 for the Nanuet, NY, unit to open. I’ve been a devoted Price Club-Costco shopper ever since, patronizing a club once or twice a month. Thankfully, Costco has opened three units in Westchester more easily accessible than Nanuet.

Sam Walton didn’t stand still, either. Within two years he opened his version, Sam’s Club. There’s a Sam’s Club in Elmsford. For a time I was a member there, as well. But I let the membership lapse after a year.

I’m not alone in support of Costco vs. Sam’s Club. The average Sam’s Club reels in $79 million in sales every year. By comparison, Costco’s average unit sales are $142 million.