Phoenix - Remembering Smitty's
Posted: 27 Apr 2006 00:30
Per Mitch Glaser
http://www.mitchglaser.com/journal/2005 ... ittys.html
--- In remembering_retail@yahoogroups.com, "storewanderer" wrote:
> Kroger has a lot of gems on their hands. It is just a question of
> bringing them together to work well. Frys and Fred Meyer have worked
> very successfully together since the failed Fred Meyer entry into
> Phoenix and they have opened a couple new Frys Marketplace Stores this
> year alone. I believe they have close to 20 Frys Marketplace Stores in
> metro Phoenix now.
>
> One full size Fred Meyer was built in Phoenix but never opened. Kroger
> cancelled the grand opening. The building was demolished.
Most of today's Fry's Marketplace stores were Smitty's stores, a homegrown chain of multi-department "supercenters" that was briefly absorbed into Fred Meyer. I'd like to take some time to remember Smitty's, which operated in Phoenix from 1964 to 1999.
I worked at Smitty's #7 (northwest corner of Baseline Road and McClintock Drive in Tempe) part-time from June 1994 to August 1997, then only during summer and winter breaks from college until January 1999. I witnessed a lot of changes in these years that foretold the end of the chain.
The first "Smitty's Big Town" opened at the southwest corner of Buckeye Road and 16th Street and was a large supermarket but not a true "supercenter” (it was later sold to Southwest Supermarkets, now it’s closed).
The second Smitty's opened at the northwest corner of McDowell Road and Granite Reef Road in a former discount department store. Smitty's "supercenter" mix of food and department store merchandise was first executed here (it was briefly a Smith’s – see below – then closed and demolished).
Smitty's continued to open stores at a rapid clip until the late 1970's, most of them "supercenters" in excess of 100,000 square feet. These stores included: a full supermarket with service meat, deli, bakery, and produce; liquor; health and beauty aids; pharmacy; domestics; housewares; furniture; men's, women's, and children's clothing; shoes; jewelry; toys; books; photo and electronics; cosmetics; hardware; automotive; lawn and garden; a full-service branch bank; a barber shop; a beauty salon; a restaurant; a snack bar; and a candy counter. The chain was agressive in the fast-growing suburbs, fending off competition. Smitty's was the undisputed #1 market leader for a long time.
In 1980 Clyde Smith sold Smitty's to a Canadian retailer, Steinberg. Long-time cashiers I worked with shared how the sale of the chain to a foreign company bothered customers in Phoenix, some of whom threatened to stop patronizing the stores.
Smitty's held on in the 1980's but began to lose ground by 1989. Steinberg's struggles in Canada deprived Smitty's of capital to expand and/or renovate existing stores. In the 1980's, Fry's, which had become part of Kroger, expanded or relocated many of its stores into large "food-drug combo units" and was aggressive about "following rooftops" in the suburbs. Smitty's other competitors in the late 1980's were Safeway, ABCO (a combination of former Alpha-Beta and Lucky stores in AZ), homegrown chain A.J. Bayless, homegrown chain Bashas', and the new warehouse-style chain, Megafoods. Albertsons and Smith's both entered the market in 1989, making Phoenix one of the most competitive grocery markets in the country. Smitty's fell to #2 behind Fry's.
Smitty's began to open new stores again before late 1994, when Steinberg sold it to The Yucaipa Cos. Yucaipa also acquired Ralphs in Southern California soon after. Yucaipa embarked on a remodeling and rebranding effort. The original Smitty's logo from 1962 was replaced with a red-white-and-blue logo to signal that the stores were back under American ownership. The store remodels were largely face-lifts, but in most instances GM sections were cut in favor of more grocery merchandise (Levi's jeans were dropped at this point).
In 1995, Yucaipa sold the reinvigorated Smitty's to Smith's Food and Drug. Smith's was reeling from its disastrous attempt to move into Southern California, and the merger allowed Yucaipa Cos. to take control of Smith's. The merger made for odd bedfellows: Smith's was #4 in the market (impressive considering it had only entered in 1989) and operated newer conventional "food-drug combos" in the 50K square foot range. Smitty's, on the other hand, was a distant #2 behind Fry's and operated older "supercenters" in the 100K square foot range. Smith's decided to keep the Smitty's name and format. Smith's private label products were placed on Smitty's shelves, and the grocery ads were combined. Smitty's did continue to have a seperate ad for its GM selection, however.
Smitty's employees resented that their stores were equipped with the "hand-me-downs" from the aborted Smith’s California division. The Smith's registers, computers, and other store equipment placed in Smitty's stores were obviously used did not function well. Working in the video rental department in 1996, I learned that most of our videotapes had come from stores in places like Santee and Corona.
In 1997, Yucaipa Cos. sold Smith's to Fred Meyer (it also sold Ralphs to Fred Meyer soon after and gained a controlling interest in the company). Fred Meyer saw opportunity in Smitty's and decided to tilt the chain more upscale and to reinvigorate the GM selection. 2 stores were remodeled into the new "Smitty's Marketplace" format in 1997, with the rest converted in the following 2 years. Smitty's was given another new logo; this one had a more "southerwestern" feel. The stores were far more extensively remodeled than they had been by Yucaipa a couple years earlier. The restaurants and snack bars, sadly, were closed at this time - they were replaced with indoor/outdoor garden centers (the outdoor portion usually taken from restaurant-adjacent parking).
According to long-time cashiers I worked with, Fred Meyer had seriously considered buying Smitty's several times over the years. Fred Meyer was obviously pleased at the results at the "Smitty's Marketplace" stores and saw room for future growth in the fast-growing city. Early in 1999, Fred Meyer absorbed Smitty's.
Smitty's had always been different from Fred Meyer: its stores were smaller, less "upscale," and had a more limited GM mix. In recognition of this fact, Fred Meyer renamed all Smitty's Marketplace stores "Fred Meyer Marketplace" and announced plans to build full-scale stores that would be known simply as "Fred Meyer." It was certainly a risk to replace a venerable Phoenix name with a banner no one had heard of, but Smitty's identity had become too blurred. Consider that Smitty's had operated under 4 different owners in 5 years, under 3 different logos in 5 years, and all its stores had been remodeled twice in 5 years. Fred Meyer felt a name change would reflect how much the stores and merchandise had changed (for the better).
The first full-scale Fred Meyer was planned for the northeast corner of Bethany Home Road and 35th Avenue, next-door to an older Smitty's that hadn't been remodeled into the "Marketplace" format. The store was partially built but never opened, and the Fred Meyer name is now long gone from the Phoenix retail landscape.
In 1999, Yucaipa Cos. sold Fred Meyer to Kroger. One of the selling points of the merger was the limited overlap between the two companies - the only market where they overlapped extensively was Phoenix. In Phoenix, Fred Meyer owned its namesake stores and the Smith's Food and Drug units, while Kroger owned Fry's, which mostly operated "food-drug combos" by this point.
By early 2000, Kroger had made some decisions about Phoenix. Most Smith's stores in Arizona were converted to Fry's units (Smith's, of course, continues to operate elsewhere). This was a smart move, considering that the Fry's name had operated in the market far longer and had an excellent reputation. Additionally, Fred Meyer's move into Arizona was stopped; the Fred Meyer Marketplace stores became Fry's Marketplace stores. Kroger preferred to operate its Arizona "supercenters" under a trusted local name while continuing to rely on Fred Meyer for its GM strategy. The full-scale Fred Meyer stores were unceremoniously dropped. For a long time, Arizona’s first Fred Meyer store (partially built, never opened) stood next to the Smitty's it was meant to replace - it too was abandoned. These 2 empty shells were replaced by a Wal-Mart Supercenter. This is appropriate because Kroger was probably afraid to have the Phoenix full-scale Fred Meyer stores compete against the growing number of Wal-Mart Supercenters in Arizona.
Some "new" Fry's Marketplace stores have opened, but they are nothing like Fred Meyer stores, nor are they like the Fry's Marketplace stores that are former Smitty's. They are larger than a combo but smaller than a supercenter (80K square feet or so). There is a good amount of GM, mainly housewares, small electrics, furniture, and garden - these stores are oriented towards the "Arizona lifestyle" and therefore emphasize "home and garden" as opposed to the full range of GM that Fred Meyer had planned to unleash on Phoenix.
The Smitty's story shows that Kroger has no intention of expanding Fred Meyer into new markets (the recent conversion of Fred Meyer stores in Utah to "Smith's Marketplace" units demonstrates this). Kroger does not intend to open Fred Meyer-like stores under other banners, either. Instead, Kroger is focusing on the "Marketplace" concept, larger than a "combo food-drug" but far smaller than a "supercenter." Kroger realizes it can't compete with Wal-Mart Supercenters and SuperTarget; it wants to offer something different, drawing on the GM strengths of Fred Meyer, the acquisition and distribution strengths of the nation's largest supermarket chain, and the loyalty strengths of homegrown store banners. Ralphs and Fry's, for example, have a lot of Kroger private label products, but Kroger sees no need to change the names on the front of the stores to match the products. Kroger is taking a very smart approach, learning what it can from Fred Meyer to make its grocery chains more competitive against Wal-Mart.
http://www.mitchglaser.com/journal/2005 ... ittys.html
--- In remembering_retail@yahoogroups.com, "storewanderer" wrote:
> Kroger has a lot of gems on their hands. It is just a question of
> bringing them together to work well. Frys and Fred Meyer have worked
> very successfully together since the failed Fred Meyer entry into
> Phoenix and they have opened a couple new Frys Marketplace Stores this
> year alone. I believe they have close to 20 Frys Marketplace Stores in
> metro Phoenix now.
>
> One full size Fred Meyer was built in Phoenix but never opened. Kroger
> cancelled the grand opening. The building was demolished.
Most of today's Fry's Marketplace stores were Smitty's stores, a homegrown chain of multi-department "supercenters" that was briefly absorbed into Fred Meyer. I'd like to take some time to remember Smitty's, which operated in Phoenix from 1964 to 1999.
I worked at Smitty's #7 (northwest corner of Baseline Road and McClintock Drive in Tempe) part-time from June 1994 to August 1997, then only during summer and winter breaks from college until January 1999. I witnessed a lot of changes in these years that foretold the end of the chain.
The first "Smitty's Big Town" opened at the southwest corner of Buckeye Road and 16th Street and was a large supermarket but not a true "supercenter” (it was later sold to Southwest Supermarkets, now it’s closed).
The second Smitty's opened at the northwest corner of McDowell Road and Granite Reef Road in a former discount department store. Smitty's "supercenter" mix of food and department store merchandise was first executed here (it was briefly a Smith’s – see below – then closed and demolished).
Smitty's continued to open stores at a rapid clip until the late 1970's, most of them "supercenters" in excess of 100,000 square feet. These stores included: a full supermarket with service meat, deli, bakery, and produce; liquor; health and beauty aids; pharmacy; domestics; housewares; furniture; men's, women's, and children's clothing; shoes; jewelry; toys; books; photo and electronics; cosmetics; hardware; automotive; lawn and garden; a full-service branch bank; a barber shop; a beauty salon; a restaurant; a snack bar; and a candy counter. The chain was agressive in the fast-growing suburbs, fending off competition. Smitty's was the undisputed #1 market leader for a long time.
In 1980 Clyde Smith sold Smitty's to a Canadian retailer, Steinberg. Long-time cashiers I worked with shared how the sale of the chain to a foreign company bothered customers in Phoenix, some of whom threatened to stop patronizing the stores.
Smitty's held on in the 1980's but began to lose ground by 1989. Steinberg's struggles in Canada deprived Smitty's of capital to expand and/or renovate existing stores. In the 1980's, Fry's, which had become part of Kroger, expanded or relocated many of its stores into large "food-drug combo units" and was aggressive about "following rooftops" in the suburbs. Smitty's other competitors in the late 1980's were Safeway, ABCO (a combination of former Alpha-Beta and Lucky stores in AZ), homegrown chain A.J. Bayless, homegrown chain Bashas', and the new warehouse-style chain, Megafoods. Albertsons and Smith's both entered the market in 1989, making Phoenix one of the most competitive grocery markets in the country. Smitty's fell to #2 behind Fry's.
Smitty's began to open new stores again before late 1994, when Steinberg sold it to The Yucaipa Cos. Yucaipa also acquired Ralphs in Southern California soon after. Yucaipa embarked on a remodeling and rebranding effort. The original Smitty's logo from 1962 was replaced with a red-white-and-blue logo to signal that the stores were back under American ownership. The store remodels were largely face-lifts, but in most instances GM sections were cut in favor of more grocery merchandise (Levi's jeans were dropped at this point).
In 1995, Yucaipa sold the reinvigorated Smitty's to Smith's Food and Drug. Smith's was reeling from its disastrous attempt to move into Southern California, and the merger allowed Yucaipa Cos. to take control of Smith's. The merger made for odd bedfellows: Smith's was #4 in the market (impressive considering it had only entered in 1989) and operated newer conventional "food-drug combos" in the 50K square foot range. Smitty's, on the other hand, was a distant #2 behind Fry's and operated older "supercenters" in the 100K square foot range. Smith's decided to keep the Smitty's name and format. Smith's private label products were placed on Smitty's shelves, and the grocery ads were combined. Smitty's did continue to have a seperate ad for its GM selection, however.
Smitty's employees resented that their stores were equipped with the "hand-me-downs" from the aborted Smith’s California division. The Smith's registers, computers, and other store equipment placed in Smitty's stores were obviously used did not function well. Working in the video rental department in 1996, I learned that most of our videotapes had come from stores in places like Santee and Corona.
In 1997, Yucaipa Cos. sold Smith's to Fred Meyer (it also sold Ralphs to Fred Meyer soon after and gained a controlling interest in the company). Fred Meyer saw opportunity in Smitty's and decided to tilt the chain more upscale and to reinvigorate the GM selection. 2 stores were remodeled into the new "Smitty's Marketplace" format in 1997, with the rest converted in the following 2 years. Smitty's was given another new logo; this one had a more "southerwestern" feel. The stores were far more extensively remodeled than they had been by Yucaipa a couple years earlier. The restaurants and snack bars, sadly, were closed at this time - they were replaced with indoor/outdoor garden centers (the outdoor portion usually taken from restaurant-adjacent parking).
According to long-time cashiers I worked with, Fred Meyer had seriously considered buying Smitty's several times over the years. Fred Meyer was obviously pleased at the results at the "Smitty's Marketplace" stores and saw room for future growth in the fast-growing city. Early in 1999, Fred Meyer absorbed Smitty's.
Smitty's had always been different from Fred Meyer: its stores were smaller, less "upscale," and had a more limited GM mix. In recognition of this fact, Fred Meyer renamed all Smitty's Marketplace stores "Fred Meyer Marketplace" and announced plans to build full-scale stores that would be known simply as "Fred Meyer." It was certainly a risk to replace a venerable Phoenix name with a banner no one had heard of, but Smitty's identity had become too blurred. Consider that Smitty's had operated under 4 different owners in 5 years, under 3 different logos in 5 years, and all its stores had been remodeled twice in 5 years. Fred Meyer felt a name change would reflect how much the stores and merchandise had changed (for the better).
The first full-scale Fred Meyer was planned for the northeast corner of Bethany Home Road and 35th Avenue, next-door to an older Smitty's that hadn't been remodeled into the "Marketplace" format. The store was partially built but never opened, and the Fred Meyer name is now long gone from the Phoenix retail landscape.
In 1999, Yucaipa Cos. sold Fred Meyer to Kroger. One of the selling points of the merger was the limited overlap between the two companies - the only market where they overlapped extensively was Phoenix. In Phoenix, Fred Meyer owned its namesake stores and the Smith's Food and Drug units, while Kroger owned Fry's, which mostly operated "food-drug combos" by this point.
By early 2000, Kroger had made some decisions about Phoenix. Most Smith's stores in Arizona were converted to Fry's units (Smith's, of course, continues to operate elsewhere). This was a smart move, considering that the Fry's name had operated in the market far longer and had an excellent reputation. Additionally, Fred Meyer's move into Arizona was stopped; the Fred Meyer Marketplace stores became Fry's Marketplace stores. Kroger preferred to operate its Arizona "supercenters" under a trusted local name while continuing to rely on Fred Meyer for its GM strategy. The full-scale Fred Meyer stores were unceremoniously dropped. For a long time, Arizona’s first Fred Meyer store (partially built, never opened) stood next to the Smitty's it was meant to replace - it too was abandoned. These 2 empty shells were replaced by a Wal-Mart Supercenter. This is appropriate because Kroger was probably afraid to have the Phoenix full-scale Fred Meyer stores compete against the growing number of Wal-Mart Supercenters in Arizona.
Some "new" Fry's Marketplace stores have opened, but they are nothing like Fred Meyer stores, nor are they like the Fry's Marketplace stores that are former Smitty's. They are larger than a combo but smaller than a supercenter (80K square feet or so). There is a good amount of GM, mainly housewares, small electrics, furniture, and garden - these stores are oriented towards the "Arizona lifestyle" and therefore emphasize "home and garden" as opposed to the full range of GM that Fred Meyer had planned to unleash on Phoenix.
The Smitty's story shows that Kroger has no intention of expanding Fred Meyer into new markets (the recent conversion of Fred Meyer stores in Utah to "Smith's Marketplace" units demonstrates this). Kroger does not intend to open Fred Meyer-like stores under other banners, either. Instead, Kroger is focusing on the "Marketplace" concept, larger than a "combo food-drug" but far smaller than a "supercenter." Kroger realizes it can't compete with Wal-Mart Supercenters and SuperTarget; it wants to offer something different, drawing on the GM strengths of Fred Meyer, the acquisition and distribution strengths of the nation's largest supermarket chain, and the loyalty strengths of homegrown store banners. Ralphs and Fry's, for example, have a lot of Kroger private label products, but Kroger sees no need to change the names on the front of the stores to match the products. Kroger is taking a very smart approach, learning what it can from Fred Meyer to make its grocery chains more competitive against Wal-Mart.