Retail Pioneer Changed Tire Biz - Tire Review Magazine

Retail Pioneer Changed Tire Biz

Little noted in the run-up to the holidays was the Dec. 14passing of Sol Price, 93, a man described as a “business visionary.” Certainlyhe changed the face of retailing – particularly tire retailing.

 

Who was Sol Price, you ask?

 

Well, in 1976 he founded Price Club, the first bulk shoppingwarehouse “club” retail outlet, a model that begat Sam’s Club, Costco andothers. Suddenly, shoppers could get just about anything they wanted,supposedly cheaper than straight retail, provided they could live without the“frills” of a traditional retail experience.

 

And that included tires and vehicle service. Over the years,tiremakers even began producing models specifically for warehouse clubdistribution, supposedly to keep tire dealers happy by not having the warehouseclubs competing tire-for-tire directly with them. Still, the “lowest price”concept irked traditional tire retailers, who found themselves having tocompete with a new mega-retailer whose only concern for “mom-n-pop” was whetherit could produce their own private label pop and make better money.

 

Price Club, which was later merged with Costco, wasinstantly successful. As was Price’s original retail venture.

 

 

Further back, in 1954, Price was a semi-successful attorneyin San Diego. Friends turned him on to an L.A.-area store called Fedco, whichsold at a discount to government employees. He took the basic idea, found anabandoned warehouse in San Diego, and opened the first Fed-Mart. At firstFed-Mart had a limited offering, but quickly expanded into a broad range ofconsumer goods – from clothes to food. Eventually, Fed-Mart became a 41-storechain across the Southwest.

 

Why is that important?

 

Fed-Mart was the model a guy named Sam Walton followed whenhe started Walmart in 1962.

 

At some point, Price gained a German business partner in hisFed-Mart enterprise. And at a later point, that relationship soured badly. Atage 60, Price found himself shunted from the business, locked out of his officeand left with nothing.

 

With his son Robert’s assistance, Price wasted little timecreating Price Club, this time converting an old airport hangar near San Diegointo a floor-to-ceiling retailing mecca. Cases of goods flew out the door asthousands of eager penny-wise shoppers gladly paid a $25 annual fee for thehonor of loading up on giant jars of mustard and cases of diapers and hugeboxes of laundry detergent at below traditional retail prices.

 

At its height of importance, Price Club had 94 locations inNorth America and turned $6.6 billion in sales. That was in 1992. The followingyear, Price Club was merged with Costco, which had been founded by a formerFed-Mart stocking clerk.

 

Not letting moss grow under his increasingly older feet,after the merger Price and his son started PriceSmart, which still operates 26warehouse-type stores in Central America and the Caribbean.

 

 

 

 

 

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