Every town has colorful stories to tell. San Diego has more than it’s share. It was a great place to grow up in the 60s and 70s.
When my family moved to San Diego in 1969, I remember shopping at a large department store called Fedmart. Fedmart was a membership discount store. Members were government employees that paid two dollars annually for a family membership.
If I remember correctly, at that time there was a Fedmart store on Balboa Avenue east of Genessee. There was another store off Rosecrans Street. The founder of this membership operation was a local San Diego attorney and businessman, Sol Price. He started the business in the 1950s and grew it to a $350 million, 40-store business 21 years later.
In 1975, German retailer Hugo Mann, bought two-thirds of the company. Less than a year later, they fired Sol Price. I have vague recollections of this happening. I remember the news (or maybe it was a newspaper) stating that Sol Price had a new plan and would bring Fedmart to its knees. He was 60 years old and starting over.
His plan wasn’t really all that different from the Fedmart business model. He bought a large warehouse in a low-rent location. He stocked it with thousands of items, not the tens of thousands found in large department stores. It was the original big box store. He negotiated quantity discounts from wholesalers on the items he stocked. He didn’t advertise and he kept his expenses low.
His new operation was a membership discount store. Members paid a small annual fee to join and benefited from Price’s ability to buy in bulk at low cost. The new store was called Price Club. The first store to open was at 4605 Morena Boulevard, only a couple of miles away from my home. It was converted from a corrugated steel manufacturing plant once owned by Howard Hughes.
This concept worked and Price Club grew quickly. Sol Price paid his employees well and demanded excellent service from them. The stores were always crowded, but the lines at checkout moved quickly. Within seven years, Fedmart was out of business.
By 1992, Price Club had 94 locations and revenue over $6.5 billion.
Sam Walton, founder of Walmart and Sam’s Club said, “I guess I’ve stolen – I actually prefer the word ‘borrowed’ – as many ideas from Sol Price as from anybody else in the business.”
In 1993 Price Club, merged with rival Costco. For a short time, it was known as PriceCostco, and then, in 1997, it became Costco Wholesale Corporation. The store is still there on Morena Boulevard, near Jutland Drive. Now it’s known as Costco Warehouse #401.
Sol Price died December 14, 2009 in his La Jolla home. He was 93 years old and a well-regarded philanthropist.
Today, I think I’ll go to Costco #401 and replenish our coffee supply with a couple of boxes of K-cups for our Keurig brewing system.
