PORTLAND, Ore. -- For Fred G. Meyer, the overriding credo of his long life was serving the needs of each customer. "Take care of the customer, and everything else will take care of itself," he once wrote. "Without customers we have no business. "If our store burned down tonight, tomorrow we could put up a tent and be back in business because we would still have our customers. However, if we lost all of our customers tonight, we would be out of business tomorrow. "That's why we need to take care of them and do business the way they want it done, not the way we think it should be done." It's a philosophy that served him well for the 56 years he ran the company -- from its founding 75 years ago tomorrow until his death at age 92 in 1978.
ay to South America when he met his future wife, Eve.
"Women have a habit of wanting a fixed abode," he said in the interview. "It's a natural part of their life to want to settle down, and Eve didn't want me to do any more traveling, so Portland was as far as I got."
Meyer tried his hand at several kinds of businesses, including land speculation, but found his area of expertise was marketing.
He bought his first store here, sight unseen, and found it was a run-down location 20 blocks north of the main shopping area of Portland. So he loaded the store's inventory on a wagon and sold product off the wagon.
In 1915 he rented space in a public market and named it the Java Coffee Co. While Meyer's concession was thriving, the rest of the market was not, so the owners agreed to let Meyer manage the whole operation for a percentage of the sales.
To attract customers, Meyer put one commodity per week on sale below cost and displayed it at the back of the market, to force traffic past the other products in the store. When his approach made the store a success, the owners tried to renegotiate Meyer's contract, and Meyer decided to become a free agent.
In 1917 he opened a store a block away that sold groceries on a cash-and-carry basis, rather than letting customers charge their purchases and have them delivered. A few years later he bought up all the concessions in the store and combined them under his ownership, enabling him to sell product for less than the competition.
In 1922 Meyer and his brother, Harry, opened Mybros (Meyer Brothers) Public Market. That partnership didn't last very long, however, since Harry Meyer thought the Piggly Wiggly franchise concept was a good idea while Fred Meyer reportedly disliked the loss of control. So Harry Meyer stuck with Piggly Wiggly and Fred Meyer set up his own company.
Late in 1922, Fred Meyer opened a store under his own name -- marking the beginning of the company that survives today. Unlike many other industry pioneers, Meyer never worked in his company's stores. "In those days we rented out most of the departments on a concession basis, and I did whatever I had to do to keep things together," he told SN in 1976. "But neither my wife nor I worked in the stores. We had to see that the workers worked."
Selling food was not enough for Meyer, and in 1930 he began opening self-service drug stores. The drug suppliers, who were used to drug store counters serviced by individual clerks, didn't like the self-service format and refused to sell merchandise to Meyer.
So he bought out several smaller drug stores and used their inventory to stock his stores, selling at prices 40% to 50% below the more labor-intensive competition.
Always looking for innovations, Meyer wrote, "Explore everything. You never know where gold will be found. Not everything will work perfectly, but if we don't try, we won't know."
For example, he opened his first store in a Portland suburb in the late 1920s after realizing that fewer people were shopping at his main downtown supermarket because of limited parking, which left many customers with parking tickets.
Meyer's solution was to gather up the tickets, take them to the police station and pay them out of his own pocket. He would also ask the police for the name and address of the car owners, and armed with that demographic information, he plotted his customers' addresses on a large map and discovered which area of the city they were coming from, then opened his first suburban store to meet customers' needs closer to home.
That store, in Hollywood, Ore., combined a supermarket, a drug store and expanded general merchandise. It also featured off-street parking and a gas station that enabled customers to have their cars serviced while they shopped.
To help customers cope during the Depression, Meyer issued Lucky Bucks at his stores -- a form of scrip shoppers could use in parking lot auctions to buy store merchandise; he also made it possible for children to go to the movies on Saturday afternoons by trading in labels from My-T-Fine products and other store brands.
To make his employees feel good, Meyer paid them in silver so they could go home with the sound of money in their pockets. According to the company's archives, Fred Meyer never built two stores exactly alike until 1969, but rather was constantly searching, fine-tuning, adapting and changing as customers changed. In one of his many memos, Meyer had this to say about change: "Think like today's customer. What the customer needed and wanted yesterday may not be what they need and want today. The customer reacts to what is going on around him, and that changes what he needs from us. Stop, look and listen to what the customer is feeling, doing, saying. Anticipate where they will be tomorrow."
In the late 1930s, Meyer stores introduced fluorescent lighting, months before it was introduced at the 1939 World's Fair. Beginning in 1940 every new Fred Meyer store was built with a covered drive-through area to enable customers to pick up their purchases in the rain -- an innovation that still survives.
Meyer believed in letting customers lead the way in service and innovation. "Merchants are all very ignorant -- they don't know all the answers," he told SN in 1976.
"If you're a good merchant, you don't make any decisions. You let the customers tell you, through the cash register, what they want and what they don't want. Business is a pure democracy, and the cash register is the greatest voting machine there is."
By the time the company expanded into Seattle in the late 1950s, Meyer was building one-stop stores of 65,000 to 80,000 square feet that sold food, clothing and home goods.
In 1960, with 20 stores and sales of $56 million, Meyer took the company public to obtain capital for additional store real estate.
Within four years, sales had grown to $76 million, and Meyer decided to get into the wholesale business, establishing Roundup Wholesale Co. in Spokane, Wash., which supplied 350 retailers in eastern Washington, Idaho and Montana.
At the outset of the 1970s Fred Meyer Inc., had 41 stores and sales of $261 million.
With the purchase of the Value Mart chain in the Pacific Northwest in 1973, sales rose to $425 million at 52 locations.
In 1975, Meyer decided customers ought to be able to do banking on Saturday, so he purchased a small savings and loan, renamed it Fred Meyer Savings and Loan, and opened branches inside his stores. He had hoped to allow customers to use debit cards to pay for purchases, but bank regulations at that time did not allow that practice.
Asked about retirement, Meyer told SN, "Why retire? Like the old fire horse that goes out to the fire when the bell rings, I've been doing this for so long that I wouldn't know what else to do. I'm too old to chase blondes." However, later that year the 90-year-old executive decided to step down as chairman and chief executive officer in favor of Oran B. Robertson, while taking the title of chairman of the executive committee.
Did he enjoy his work? SN asked Meyer that in 1976. "Work is not something you enjoy," he replied. "People don't work because they enjoy it. Enjoyment is an emotion, and business is not emotional."
