Independent Grocers Fighting to Survive: 1946
Following the end of the Second World War, the end of food rationing and the lifting of price controls marked the beginning of a troubling time for the independent grocer. During the war, customer loyalty to independent grocers was strong, but afterward, the bigger self-service supermarkets were offering a wider selection at lower prices and frugal shoppers took notice.
In 1946, in an effort to assist these struggling grocers, a sales representative from Del Monte Foods introduced eight independent grocers from Newark, New Jersey to the concept of cooperative buying. Collectively purchasing products in large quantities at a lower cost allowed these grocers to offer their customers the same goods at an unprecedented, competitive price. Pleased with the results, on December 5, 1946 this cooperative relationship was formalized. Each of the seven grocers invested $1,000 and Wakefern Food Corporation was born.
The Birth of “ShopRite”: 1951
For 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 #1
By 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.