My time with Osco and the Jewel Companies ended in 1985, shortly after American Stores acquired everything that was Jewel. By that time, I was in the Jewel Companies corporate office. As it turned out in the American Stores acquisition of Jewel I, along with most other Jewel Corporate executives, became excess baggage and were separated. I went on to other things.
Before then, I worked nearly 15 years with Osco Drug, beginning in 1967. Osco, one of the country’s first self-service drug store chains, with 31 “main street” stores in small and mid-sized markets in six Midwestern states had been acquired by Jewel in 1961. I joined Osco in 1967. The years that followed were years of change and excitement as Osco expanded into new markets and new states with “free standing stores” and grew successfully in joint locations with the four Jewel supermarket companies – Jewel Food Stores in the Chicago market, Eisner Foods in Central Illinois, Star Markets in New England, and Buttrey Food Stores in Rocky Mountain states. By the end of the 70’s, Osco had over 350 stores in twenty-seven states.
Increasingly, our new drug stores were larger with more merchandise categories and broader assortments. We not only continued to develop the original “free standing” drug stores, but the four Jewel food companies and Osco pioneered the food/drug combination store format, a big step at the time but commonplace today. Building partnerships under one roof with the Jewel supermarket companies required compromises on both sides - Which company sells the candy? Who turns on the lights? – and was often challenging, but these stores set the pace for the future development of convenience shopping in the U.S. – customers liked being able to get a lot of shopping done at one “destination” location. In short, the formula was “2 + 2 = 5” for both the customer and the Jewel bottom line. Other retailers, among them Skaggs Companies (later American Stores) and Albertson’s, saw what was happening and climbed aboard the same bandwagon.
During the 70’s, Osco grew in other dimensions too. To staff the growth, we aggressively hired management trainees and pharmacists. Shifting from the old “Direct Store Delivery” system, we got into warehousing and distribution in a big way. We opened the Crest Photo Processing plant that eventually served all of Osco’s stores and grew to be highly profitable in its own right. Osco pharmacists broke new ground with the country’s first consumer information program that not only made prescription prices openly available but also encouraged customers to ask about prescription prices in advance of purchase. We got into direct importing for selected categories of merchandise, mostly from Japan andSoutheast Asian countries, and with that we developed our own private label “Passport” brand of electronics. And with our growth, we outgrew the old Franklin Park office, and along with Turn*Style, another Jewel company, built an expanded and innovatively designed home office in Oak Brook, another Chicago suburb.
By 1980, Jewel Companies corporate management had settled on two concepts that, along with supermarkets, would be drivers for the next phase of the corporation’s growth – free standing drug stores and food/drug combination stores – based largely on the success experienced by these two store types and their outlook for growth. That strategic direction led to the Sav-on Drugs merger into Jewel – and then in 1984, to Jewel’s absorption by American Stores, a company that had also chosen the same strategic path and wanted Jewel’s capabilities to move forcefully in that direction.
Why was Osco successful? For openers, its people were willing workers. I suppose it helped that the company started in the Great Depression in smaller towns where a job really meant something. One time I asked Byron Luke, then Osco’s Vice President of Marketing and Merchandising, why he decided to sign on with Osco Drug. Byron said his childhood growing up years were on a farm in South Dakota, where the work was dawn to dusk in all kinds of weather. He joked that inside work in drug store retailing was long hours and hard work too, but you didn’t have to get up before the sun and work outside in the cold and rain. Byron went on to say, One time on the farm, I took a mid-day break and was sitting on a step leading up to the front porch. My dad passed by, stopped, and with a stern note in his voice asked what the devil I was doing. ‘Taking a time out. Doing nothing,’ I said. To which his response was ‘Well Byron, if you’re going to do nothing, get in the house. I don’t want the neighbors to see you.’
The popularity of country music today reminds me that in our hearts, we’re all a little bit country. Because of its small town Midwest origins, Osco was full of country boys like Byron who had hard work bred into them and “came in out of the rain” to join the company. I remember meeting a newly promoted assistant store manager who’s “country accent” made it clear what part of America he was raised in. After the usual introduction, I asked where he was from. Proudly, he replied, “I’m from Henry.” I’d never heard of the town, so I asked him where the devil Henry was. “Well sir,” he replied, “Henry is in South Dakota. It’s just five miles past resume speed.”
Osco’s foundation was built on a culture that said hard work was the key to success. It also had a culture that understood and rewarded achievement. Jon ‘Tork’ Fuglestad was another “one of a kind” leader who started out as an Osco part-timer, stayed with Osco after he completed Pharmacy College, and eventually headed up Osco store operations across the country. In his travels around to store, district and regional meetings, Tork always found a way to recognize people who, through their accomplishments and ideas, had made a difference. In fact, Tork became famous for the inscribed plaques he presented to those who had hit a new milestone or contributed something special that merited accolades. Later, at Tork’s retirement celebration, his associates called him up to the podium and presented him a beautifully finished walnut plaque of his own that featured a large gold colored cutout of the United States. The cutout had a hole punched out in every town across Osco territory where, over the years, Tork had awarded someone one of his plaques. It looked like a big piece of Swiss cheese.
Tork retired, but he never left the business. After retirement, he established, built and led the Osco/Sav-on Alumni Club, began an annually published Osco/Sav-on alumni directory, and initiated “Connections,” truly remarkable contributions that keep Osco and Sav-on “graduates” in touch with the business and each other. Osco people had spirit. Who ever attended an Osco 25-year service celebration without carrying home a memory of Fred and Marty Dearborn making it a memory for everyone there, beginning with the red carpet and songs on the bus? In whatever he was asked to do throughout his career, Fred gave 110%, and he had a friendly, human way that made his contribution unforgettable.
For Osco people, going beyond expectations to satisfy customers was the order of the day. The Osco legend includes a story about “Doc” Eliot, who in the 1930’s followed George Hilden as the manager of Osco’s first store, #801 in downtown Rochester, Minnesota. Recognizing that people who came to Rochester’s famous Mayo Clinic needed a little something special, Doc figured a way to bootstrap fresh oranges into the store for sale in Minnesota’s often harsh winters. Selling oranges in a drug store was unheard of, and in those days most food stores didn’t stock them in wintertime either. Oranges at Osco became a Rochester magnet, not only for Mayo visitors, but for Rochester’s home based clientele. There is another story about Doc. He was working the camera counter when a customer walked up and asked to see an electric shaver that #801 didn’t carry. Doc said, ‘we could be sold out, but let me check the storeroom.’ He then scooted out the back door and literally ran to a store down the street where he bought the exact item the customer wanted, ran back to #801, and resold it, making the customer happy at Osco’s customary bargain price.
Osco’s customer first philosophy was non-negotiable. When I managed store #813 in St. Cloud, Minnesota, we employed a 6’4” high school part-timer. One day, he wised-off to a customer, so I called him up to the office, said he broke rule #1, and told him to “Take off your jacket and go home. You’re fired.” Young people all make their share of mistakes, and my intention was to teach him a lesson and then hire him back. (Actually, we needed him. He was our “ledge man.”) He beat me to the punch. The next day he came in early and asked to be re-hired, so I did. I’m proud and delighted to say he later signed on for a successful Osco career, become one of Osco’s most successful managers and company leaders, and is now vice-president of the Osco/Sav-on Alumni Club, Gary Hunstiger.
Osco people not only took care of customers and worked hard, they worked smart. They were shrewd merchants, encouraged by incentive programs that allowed them to share generously in their store’s profits. To go along with that, for years Osco store managers had the ultimate authority – and responsibility – to buy just about anything they felt they could profitably sell in their stores. When I was new in the business I had an opportunity to visit with Gene Hubbard who managed the Osco in Marshalltown, Iowa. ‘Hub’ was renowned as a creative merchant, and there were a couple of years where his store’s profits were enough for his share to make him the highest paid person in the company, more than Osco’s president. I asked him how he did it. In answering my question, Hub said:. Well it’s like this. Osco’s stores are known for having the best prices. But you had to use your head. One time the Morris Struhl salesman came by with a special deal on leather coats his company had acquired from a department store that needed to get out from under its overstocked inventory. He was selling them for around $4.00 each on a minimum order of 12. Many stores bought a couple dozen, marked them up to $7.99, sold out quickly and were happy. I bought a gross, put them in a big “Today Only at Osco” ad at $29.99, still an incredible value. The next day, people were lined up down the sidewalk. We sold out by noon. Instead of a markup based on cost, I took a hard look and priced the coats at a price I thought they were worth. Even if the ad flopped, I could have marked them down and done pretty well at half that price on a clearance sale.
There were a lot of trainees and future store managers who had a chance to work with Hub and other savvy Osco merchants, and their merchandising skills were embedded in the company’s fabric.
On top of it all though, a good part of Osco’s success happened because Osco people liked working with each other. They were good natured, could roll with the punches, and liked to have fun. Everybody has their favorite stories about Osco people they worked with.
Here are some I recall: Ernie Sawyer managed the highly successful Osco Drug store #827 in downtown Elgin, Illinois. Ernie spent most of his time on the sales floor, doing whatever needed doing, and led by example. He was a hands-on leader and coach who helped people learn and grow by working shoulder to shoulder with them, feather duster in his back pocket. Assistant managers and trainees aspired to work in Elgin and learn the business by working with him. Ernie generously shared his time and knowledge, but the working days were busy and there wasn’t much time for formal training, so he often would get together at the end of the work day with members of his crew at the local watering hole just to talk about the business and socialize. On those occasions, as he left the store in charge of an assistant manager, Ernie would say, ‘If anyone calls, just tell them I’m at the office.’ The local pub? Its name was on a big sign over the entrance – ‘THE OFFICE.”
This reminds me that Osco’s original store designs had a store office, wide open at the back on a mezzanine balcony overlooking the entire sales floor. Crew members, salespeople, whoever, would climb the stairs and come or go at any time. There wasn’t any privacy. Ron Barr, store manager, a fun-loving guy and unforgettable character, decided he needed more privacy and quiet when he was talking on the phone. He kept a big empty shipping carton in the office alongside his desk. When using the phone, he would lower the box over the top half of his torso. It was his phone booth. But the cardboard was thin and actually intensified the sound so that people nearby could hear everything he said. The vision of him talking on the office phone and covered from head to knees by a Kotex carton made the rounds and became legendary, mostly because when Ron found out how others saw it, he would tell the story on himself.
Sometimes the joke was on me. In the late 1960’s I served for a time as an Osco district manager. My district included the three stores in Little Rock, and at inventory time I showed up at one of the stores where the three managers and I were to meet and conduct the inventory. I found them in the back room around a small oblong box type object – the front half was a chicken-wire cage joined to a back half that was a plywood cube with a hole facing into the wire part. In front of the hole was a little bowl of water and some lettuce leaves. The three managers were stooped over, peering into the cage including store manager Roy Cheever. Here’s what happened next:
Me: What’s up with the cage? Roy: It’s a Mongoose. Me: Mongoose? I’ve heard of those but have never seen one. What’s it doing here? Roy: It belongs to one of the clerks. He brought it in because the crew wanted to see it. Mongooses have the quickest movements in the animal kingdom. In India, they can kill Cobras in just as they strike by jumping to fiercely bite the Cobra’s neck just behind the head. Me: I don’t see him in there. Where is he? Roy: He’s in the little house at the back of the cage. If you hunch down real low, you could probably see him through that small hole.
I set down my briefcase, got down on my knees, and leaned real close so I could see. Suddenly, a black fuzzy blur flew out of the cage, struck my neck and fell to the floor. Quickly I grabbed my briefcase and smashed the mongoose. The three managers rolled on the floor laughing. It was all a set-up. I’d just killed a dirty old black sock. It was loaded into a spring at the back of the cage and when a button was pushed, the spring released and fired the sock to hit the person in front.
Looking back, I think my Osco years were among the most enjoyable and fulfilling of my working life. There was never a dull moment. The days were packed with challenge, change, growth and the opportunity to grow and contribute alongside people you liked, respected and admired. I thank my lucky stars that I had the good fortune to be there.
As Osco celebrates its 75th, I can recall one other 75th anniversary I attended, in 1974. Osco’s parent corporation, Jewel Companies, Inc., started in 1899 selling coffee, tea and spices to homeowners, door to door. The company became quite successful and developed as the Jewel Home Shopping Service operating direct to the home routes in 44 states. Starting out in the horse and buggy days, the business soon shifted to Model A/Model T vintage Ford trucks.
Fast forward to 1974 and Jewel’s 75th anniversary celebration. By that time, Jewel was a diversified retailer operating several different kinds of businesses whose leaders were invited to a 75th corporate anniversary event. Jim Beam, the whiskey company, had designed a special commemorative edition ceramic bottle shaped like one of the old, original Jewel route trucks, wheels and all, hollowed out and filled with a fifth of its top-of-the-line bourbon. Each of us received one of the miniature Jim Beam whiskey filled trucks as a memorial gift. About that time, Osco had just completed its new Oak Brook office building, and I proudly displayed my little Jewel 75th anniversary route truck on a countertop in my office, alongside other company memorabilia.
A year or so later, I was away on vacation one afternoon when a gigantic snow and ice blizzard blew through the Chicago area. The road leading to the office became impassable and everyone working there was snowed in overnight. When I got back from vacation the next week, I noticed my Jewel truck had been moved. I picked it up to put it back in its original “parking place.” It was a lot lighter. My truck was empty. I guess it was out of gas.
Now, 38 years later, it’s Osco’s time to celebrate. Congratulations on your 75th! May your gas tank never be empty and take you – and the company – a long, long way.