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Sol Price Changed Retailing Forever

Audio

Aired 3/22/11

Sol Price will be honored posthumously as the "History Maker of the Year" on Saturday by the San Diego History Center. We explore the life and legacy of the founder of FedMart and the Price Club.

Sol Price will be honored posthumously as the "History Maker of the Year" on Saturday by the San Diego History Center. We explore the life and legacy of the founder of FedMart and the Price Club.

Guests

David Kahn, executive director of the San Diego History Center

Iris Engstrand, historian and editor of the Journal of San Diego History

Read Transcript

This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

MAUREEN CAVANAUGH: I'm Maureen Cavanaugh and you are listening to These Days on KPBS. Controversy surrounds the planned expansion of Wal-Mart superstores in San Diego. The big lots stores generate strong feelings. Many people love them, many people hate them. No matter what your feelings are about the big discount superstores though there's no doubt that one of the pivotal figures in the development of these chains lived right here in San Diego. Sol Price of Fed Mart, Price club and Costco will be honored posthumously as a history maker of the year this Saturday by the San Diego history Center. I would like to welcome my guest to discuss the Sol Price Legacy, David Kahn is executive director of San Diego history Center and good morning David.

DAVID KAHN: Hi, Maureen, how are you?

MAUREEN CAVANAUGH: I'm fine thank you. And Iris Engstrand is historian and editor of the Journal of San Diego history. Iris, welcome back.

IRIS ENGSTRAND: Good morning, Maureen.

MAUREEN CAVANAUGH: Now I wanted to tell everyone if they would like to join our conversation the number is 188-895-5727. Sol Price died in 2009, David, and I'm wondering therefore why is he being honored as history maker of the year?

DAVID KAHN: Well as you mentioned Sol Price is one of the founders of the whole discount retailing enterprise in the United States of America. And he was a very private person during his lifetime. I understand that he was offered to be made Mr. San Diego at one point and he said no. So because he was a private person he would often during his lifetime turned down honors. So I think it's really only possible at this point it to properly honor him after his death.

MAUREEN CAVANAUGH: How fascinating. So you wouldn't hear of it after when he was alive but now is the time to do that. As I said before cost of their list Price club before bracelet there was that of Mark and the entire phenomenon of the discount store came up, I mean Sol Price if he did not creativity certainly made it happen. So how would you describe him as a businessman, David.

DAVID KAHN: Oh boy. I will start out and Iris who has done a bunch of research on this can probably take over but one of the things that I've learned is that essentially he was a man of enormous integrity, just absolutely incredible integrity and he cared very much about all of his customers and in fact Price club going way back to Fed Mart really started out as kind of a co-op. You have to be a member and it was a not for profit at the very beginning. So I think he was always in driven by a great business ethic and he always wanted to try for a good product at a good Price for consumer and that led to all sorts of innovations. I think that was sort of at the root of it, wouldn't you say, Iris?

IRIS ENGSTRAND: Right, he was extremely ethical. He really cared about the customer and kind of the way that maybe obviously he was in no always was interested in the bottom line but I think the customer really came first and the customer was always right. And I think their exchange policy that's lasted even today evening Costco if you don't like something you just bring it back.

MAUREEN CAVANAUGH: Iris, can you tell us a little bit about his background. How did he become the Sol Price that we kind of know?

IRIS ENGSTRAND: I think the main reason that I now know all of this is his son Robert Price has written an article in the Journal of San Diego history which tells his life. He was born in the Bronx in New York from a family that came from Minsk in Russia, now Belarus. And he was always very concerned about people. His father was a labor organizer, the ladies garment union and he was always watching out for the underdog and then his father had to move to California for his health. He had tuberculosis and they came to California and were able to see, that was during the depression, and Sol himself, they made several trips back and forth across the country and he saw people suffering from lack of goods and he thought you know, I should make products available but he does start out as a lawyer. He was a graduate of USC law school at the top of his class and he comes to San Diego and meets Mandell Weiss who is one of his clients and Mandell suggested that they go to Los Angeles and visit Fed Co, and Fed Co did not want to come to San Diego they probably didn't think it was a good enough market so they said all right, we will just, I will use my father-in-law's building on Main Street and we will call it Fed Mart.

MAUREEN CAVANAUGH: Now Fed Mart was kind of a big warehouse kind of shop in the 1950s are we talking about here?

IRIS ENGSTRAND: Yes in the 1950s and you had to be a federal employee and that was the membership.

MAUREEN CAVANAUGH: I think this is a strange for transference, Sol Price lawyer to Sol Price retailer. How exactly did that happen?

IRIS ENGSTRAND: Because they rented his father-in-law's warehouse and then he was actually try to help his mother and his father-in-law had passed away he was helping his mother-in-law find something to do with the building and he was just basically a very clever person with a great business sense. So Leo Friedman, Mandell Weiss and Sol looked at this, they started the store but Sol kept his clients as a lawyer but pretty soon after about a year and a license that you know I don't think you can do both. You better leave the law practice and go full time into retailing and he just had a knack for product placement, for everything. For how to keep the margin of profit very low and give the customers the best deal they could get.

MAUREEN CAVANAUGH: I'm speaking with Iris Engstrand and David Kahn and we are talking about the legacy of Sol Price. So Price will be honored by the San Diego history Center as history maker of the year of course posthumously this Saturday. How successful was his first store?

DAVID KAHN: I think it was very successful. Everybody was surprised I think at how successful it was. One of the interesting things about it was that it was located in the middle of nowhere way off of Main Street about three or four blocks to the south east of where the Coronado Bridge now is. So it was and is an industrial area. You could go there today and it is still warehouses and railroad tracks and all that sort of thing, there were tuna cannery is nearby. It wasn't the sort of spot that you think of establishing a retail outlet and since retailers concentrated in downtown San Diego and far to the north and west. So I believe didn't they say that they realized about three times the profit of sales in the first year than they had expected. So it turned out to be wildly successful.

MAUREEN CAVANAUGH: Sam Walton, a name that we are familiar with, the founder of Wal-Mart, had some very interesting things to say about what he learned from Sol Price. Can you tell us about that?

DAVID KAHN: Yes we have a quote in the article that Sam Walton said everything I learned about retail low-margin retailing I borrowed from Sol. He says actually I stole from Sol Price. He named Wal-Mart after Fed Mart. He thought that was a really good plan as a name. And another interesting quote from Sol is that it only cost $50,000 to open the first Fed Mart and five years later they were into the millions he said when we didn't know anything it didn't cost us as much.

MAUREEN CAVANAUGH: Now even way back then Sol Price did have some trouble with the traditional retailers in town didn't you?

DAVID KAHN: Oh yeah, people were not happy that merchandise was being Sold at a discount. And I think there is a great story that a so-called bedding inspector arrived at that marred with all bunch of questions about whether or not the bedding was being sold (inaudible) and when they brought drug retailing into Fed Mart there were a lot of problems with the (inaudible) sending death threats and some people threw rocks into his sums of money for what was happy with the products and services.

MAUREEN CAVANAUGH: As I say it remains controversial in San Diego today but also, no one Sol Price has done in San Diego tells a little bit about his philanthropy.

DAVID KAHN: Oh boy, well the San Diego history Center is certainly a major beneficiary about 10 or 11 years it is not Price charities began a project called school in the park and not involve sending elementary school children from city Heights into Balboa Park where they basically spend about half the school year rotating around to different museums and learning firsthand about the collections and gaining all sorts of experiences that they wouldn't have back in the school. So this initiative is fully funded by Price charities and other great initiative that a lot of people know about is the air and Priceless program that focuses on high school students and exposes them to say things and takes them to Washington DC. Todd Gloria our councilman, went through the air and Price Fellows program. It's really an extraordinary initiative and that's really the tip of the iceberg. It's the charities that Sol Price and his family have launched here in town have just been incredible and helped to transform city Heights predicted a lot of good in other areas as well.

MAUREEN CAVANAUGH: Of course there is the Price Center.

IRIS ENGSTRAND: The Center for public interest Law at the University of San Diego and the other thing is the Price family is very modest about all these achievements they are very quiet low-key and Robert has said many times he's not sure how Sol would feel about this history makers event because he was so quiet and never wanted to appear for these public acknowledgments so it's kind of interesting for the family to be able to do this and I think it's really important for the people of San Diego because everybody will say to me well I always knew about Sol Price I didn't know anything about him really, so this article and Robert is working on a book I hope that Honda's work life of Sol Price because it's a fascinating story.

MAUREEN CAVANAUGH: You described his background a little bit about traveling across the country during his depression, his father being a labor organizer. He was unapologetically Democratic in a largely Republican business community here in San Diego through the 50s into the 90s. How did he express his political support?

IRIS ENGSTRAND: He was a very great supporter of the Democratic Party to the point that there's a picture of him with Clinton and of course Obama actually visited him just prior to his campaign and he was able to give Obama some interesting advice which was, please spend more time with your wife, Michelle.

MAUREEN CAVANAUGH: He took him up on that I think.

IRIS ENGSTRAND: But because he was a Democrat in a very Republican community here is an amazing sense of being able to still deal with all the Republicans and I'm sure they wish to somehow he would change but he never would and his family of course is a supporter of the Democratic Party.

MAUREEN CAVANAUGH: Sol Price had a health problem that stopped him through his life had something to do with his eye, his left eye

IRIS ENGSTRAND: I think so.

MAUREEN CAVANAUGH: We see that in photographs is the reason I mention it.

IRIS ENGSTRAND: He was very embarrassed about it didn't like his picture taken as a student in high school people teased him and then I'm sure other people that have a physical defect could relate to that bullying. I think he rose above it and never really used it in any kind of excuse.

MAUREEN CAVANAUGH: I'm wondering, David, as you thought about who to extend this history maker of the year award to, what did you go through? How important is Sol Price in the history of San Diego?

DAVID KAHN: What we think he is extremely important in not only as a figure here in San Diego, but nationally and internationally. This whole concept of developing discount retailing has really changed the way people shop. Here and it is spreading around the world. As well, the whole idea that all sorts of different features or facets of retail would be brought under one roof so that you would have food, products like drugs and the drug store, hardware, other things all coming under one umbrella. That was very innovative and very different and again we have to think that this started back over half a century ago in the early 1950s. So I think it can really be said that this spread from San Diego, this first store was right here in San Diego and Iris has mentioned that Wal-Mart copied the model in the name, Kmart did the same. My guess is that we wouldn't have things like Home Depot and all these other stores these days if it hadn't been for Sol's innovations in the area of retail. So he is an extremely important figure historically.

MAUREEN CAVANAUGH: As you put together the small compilation, this article on Sol Price I'm wondering what were the things that sort of jumped out at you and surprised about this great man's life?

IRIS ENGSTRAND: Actually how much he cared about the customers and how that was always his focus, let's get the best deal for everybody so that all the people who work in every walk of life can afford whatever they need. And I think the article also goes into how the evolution through Fed Mart to Price club and then the eventual merger with Costco now Jim's Senegal CEO of Costco today was a worker in the original Fed Mart and stocked the shelves and became a very good friend of Sol. So those companies and of course Costco today has like 563 stores worldwide. So I think when you look at Sol he is the founder of the whole big-box idea and could go eventually few people have heard of it some of the other competitors even Fed Mart after Sol founded Price club and left Fed mart fed mart eventually went out of business also so it had to be Sol's genius that kept these stores together.

DAVID KAHN: You know maybe wanting to add getting back to the idea of Sol and his integrity there was one great story that I guess in the early days they'd come up with the idea that they could really sell or move some women's stockings so they ask the supplier to how they were selling them in the store and it turned out not to work out. So Sol directed his employees to reimburse to the wholesaler at the top that he had introduced in the wholesale Price because not everybody made the money they thought they were going to make on the deal and his employees couldn't believe it that he was ordering them to reimburse a wholesaler but that's how he did business.

MAUREEN CAVANAUGH: It stands out because it doesn't happen often I imagine.

DAVID KAHN: Never.

MAUREEN CAVANAUGH: I want to let everyone know that Sol Price will be honored posthumously at the history maker of the event on Saturday and it is sponsored by the San Diego history Center and I would like to thank my guests David Kahn and Iris Angstrom, thank you so much for speaking with us

DAVID KAHN: Thank you for having us,

IRIS ENGSTRAND: Thanks Maureen, I enjoyed it.

MAUREEN CAVANAUGH: And if you would like to comment please go to KPBS.org/These Days. You are listening to These Days on KPBS.

Comments

Avatar for user 'gilberto3'

gilberto3 | March 22, 2011 at 11:47 a.m. ― 3 years, 5 months ago

I would like to comment on Sol Price.I was a Business Agent and elected Trustee for Teamsters Local 2707, Air Line Division for 18 years. During that time we represented everyone at PSA except for the Pilots and a few clerical people. As was common in the 1980's we had to negotiate a pay cut. In return we also negotiated an ESOP (employee stock option plan).We also got to pick our own member of the board of directors. We picked Sol to be our representative. Why? He was a Democrat with a reputation for honesty and a genuine caring for his employees, all of which were represented by a Teamsters local here in San Diego. Sol had a saying that went, "you take care of the employees first, If you take care of them, they will take care of you and the business". That seemed to work out well for him. I will say that he was always up front with us and never lied to us (I was the head of the ESOP employee committee).There was the story that while visiting one of his Price Clubs a lady recognized him and told him that the binder paper that they had on sale was 2 cents cheaper at Wallgreens. He immediatley lowered his price 2 cents below them. I could go on and on, but I cannot say enough about a man that has had such an impact on retailing, ask Sam Walton. The only difference is that every one of his stores was organized, from Fed Co to Fed Mart by the Teamsters.I am now retired but I will never forget Sol Price.
Regards,
Gil Oakes
PH-(619) 475-8686

lo

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Avatar for user 'Missionaccomplished'

Missionaccomplished | March 24, 2011 at 8:55 a.m. ― 3 years, 5 months ago

And too bad unionized retail workers died with Fed Mart.

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