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ShopRite Yesterday |
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ShopRite YesterdayIndependent Grocers Fighting to Survive: 1946America was at peace and Americans were feeling proud and invincible. The "can do" spirit that had turned the nation into the leader of the free world was focusing on the task of getting back to business as usual. Without the need to supply the war effort, food rationing was ended. However, the end of rationing and the lifting of price controls was the beginning of a troubled time for the independent grocer. During the war years, customer loyalty to independent grocers was strong, but now the bigger self-service supermarkets were offering a wider selection and lower prices. 
Late in 1946, a sales representative from Del Monte Foods talked to several independent grocers around Newark, New Jersey who all had the same problem – how to buy product cheaply enough to offer customers competitive prices. The representative introduced the grocers, who decided to try cooperative buying. They experimented by ordering and splitting a few cases of grocery products. Pleased with the results, on December 5, 1946 they formalized the relationship. Each of the seven grocers invested $1,000 and Wakefern Food Corporation was born. The name came from the first letters of its founding members: W for Louis Weiss; A for Sam and Al Aidekman; K for Abe Kesselman; an E for pronunciation; and FERN for Dave Fern. Apparently they could not figure out a clever name to include a "G" for the other founders Sam Garb and Albert Goldberg!
The Birth of "ShopRite": 1951For the first few years, the Members of Wakefern advertised under their own names. But in 1951, they decided they could be more competitive, and spread the word about their great prices by advertising under one name -- ShopRite. They saw an immediate jump in sales. All of the Members then added the ShopRite name to their stores, and its success attracted many new Members. Within a year there were over 50 Members of the cooperative, and the growth in volume lead to hiring more buyers, moving to larger warehouse space, expanding trucking operations, enlarging their stores and developing a private label brand. The Trading Stamps Decision: 1958
By the mid-1950’s trading stamps had become a consumer craze with thousands of devoted collectors. Many supermarkets were "giving away" stamps, and the ShopRite owners met to decide if they too should join the craze. The arguments were heated, but in the end they decided not offer stamps. However, they knew they would have to do something to fill the merchandising void. One Member offered a radical suggestion: "Let’s cut grocery prices by 10%." The Members trusted the customers’ eye for value, and the ShopRite "Low Price Leader" image took root. On The Way to #1By the end of their first ten years in business, there were more than 70 ShopRite Members with an annual sales volume of $100 million. After the trading stamps decision, ShopRite became a major player in the New Jersey market, and even began attracting independent grocers from surrounding states. There were setbacks, of course. In the late 1960’s, ShopRite lost nearly half of its wholesale volume when its largest Member, Supermarkets General, withdrew from the cooperative. (They later named their stores Pathmark). This setback inspired the remaining members to embark on a major expansion program, opening new stores and focusing more of their purchasing power on the cooperative. Within three years, these efforts resulted in growth which replaced the lost volume. During the 1970’s they realized that the improvement of the cooperative structure would lay the foundation for even greater business development. So, they adopted the principle of One Member, One Vote, which gave all of the Members, regardless of their size and number of stores, the confidence that their representation in the cooperative was equal. Today, ShopRite is the largest retailer-owned cooperative in the country.To learn more about ShopRite today Click Here |
