Sol Price, 93
Sol Price, 93, father of warehouse superstores
Sol Price, 93, a business visionary whose Price Club retail stores revolutionized the way millions of Americans shop -- in no-frills warehouses that offer bulk items at cheaper prices to consumers willing to pay membership fees -- died Dec. 14 at his home in La Jolla, Calif. His family said he had been in declining health in the last two years and did not cite a specific cause of death.
The retail models that Mr. Price pioneered with Fed-Mart in 1954 and Price Club in 1976 were the inspiration for companies such as Wal-Mart, Sam's Club and Costco, with which Price Club later merged. Sam Walton, who started Wal-Mart in 1962, later admitted he "borrowed" many of Mr. Price's innovations, to which Mr. Price half-jokingly responded, "If I was so helpful, why don't you just pay me a finder's fee?"
If Mr. Price, as the acknowledged father of warehouse superstores, found consumers receptive to his approach, the same could not always be said of manufacturers. Initially, many producers, sometimes pressured by traditional retailers, rejected selling their products to Fed-Mart and Price Club.
Mr. Price responded by creating his own store brands, guaranteeing equal quality at a lower price. The resulting sales volume forced manufacturers to give in, said Walter Loeb, a retail consultant and board member of the Washington-based National Retailers Federation. Manufacturers needed the sales. "They had to sell" to Mr. Price, Loeb said.
Mr. Price was determined to keep prices and overhead low, figuring he would make a profit on the volume of sales. He paid high wages, worked with labor unions and gave generous benefits to his employees. In return he demanded scrupulous honesty and ethics in the pursuit of the lowest possible prices.
Bob Ortega, author of a biography on Walton, "In Sam We Trust," described the differences between Walton and Mr. Price. "Sam Walton and Sol Price came from right angles to one another in their approaches to life and work," Ortega wrote. "Price liked to claim he read the Daily Worker instead of the Wall Street Journal. . . . He was considerably more generous with benefits and wages than other discounters, Walton included. And, unlike Walton in those days, Price gave money to charities generously and often, through a foundation he created and to which he handed $70 million."
Mr. Price was a San Diego lawyer when friends urged him to look into a Los Angeles area business called Fedco that offered discount products to government employees. Hoping to duplicate the model, they started Fed-Mart in a dingy warehouse neighborhood near the San Diego docks. Offering at first a limited variety of products, Fed-Mart was an immediate success and expanded into pharmacy items, liquor, clothing, photo supplies, detergent and other consumer goods. Mr. Price built Fed-Mart into a multimillion-dollar, 41-store chain across the Southwest.
In 1976 at age 60, Mr. Price found himself on the street and locked out of his office, stripped of his Fed-Mart business by a Germany-based partner. Mr. Price brainstormed ideas with his son, Robert, and within months created Price Club, a warehouse store he opened that summer in an airplane hangar once used by Howard Hughes in San Diego. Shoppers came from miles around, eager to pay a $25 annual membership fee for the right to buy super-size jars of mayonnaise and huge boxes of laundry detergent at low prices.
In 1992, at the zenith of its business, 94 Price Clubs in the United States, Canada and Mexico earned a record $134.1 million on $6.6 billion in revenue. In 1993, Price Club merged with Costco, which had been co-founded by James Sinegal, who started in the business in 1955 as a part-time stocking clerk at Mr. Price's first Fed-Mart.
After the merger with Costco, Mr. Price and son Robert spun off PriceSmart Inc., which operates 26 warehouse stores in the Caribbean and Central America.
Son of immigrants
Sol Price -- his family said it was never Solomon -- was born Jan. 23, 1916, in New York City, the son of Samuel and Bella Price, who came to the United States from Russia during the wave of Jewish immigration in the first years of the 20th century.
Mr. Price said his father had worked with organizer David Dubinsky in the creation of the International Ladies Garment Workers Union and later founded his own clothing factory in Lower Manhattan. His father, who became ill with tuberculosis, relocated the family to San Diego in the late 1920s.