Clarence Saunders (grocer)

Clarence Saunders

Clarence Saunders (August 9, 1881 – September 23, 1953) was an American grocer who first developed the modern retail sales model of self service. His ideas have had a massive influence on the development of the modern supermarket. Clarence Saunders worked for most of his life trying to develop a truly automated store, developing Piggly Wiggly, Keedoozle, and Foodelectric store concepts.

Born in Virginia, Saunders left school at 14 to clerk in a general store. Later he worked in an Alabama coke plant and in a Tennessee sawmill before he returned to the grocery business. By 1900, when he was nineteen years old, he was earning $30 a month as a salesman for a wholesale grocer. In 1902 he moved to Memphis where he formed a grocery wholesale cooperative. Through his experiences he became convinced that many small grocers failed because of heavy credit losses and high overhead. Consequently in 1915 he organized the Saunders-Blackburn Co., a grocery wholesaler which sold for cash only and encouraged its retail customers to do the same.

Piggly Wiggly

The original Piggly Wiggly Store, Memphis, Tennessee

After leaving Clarksville, Tennessee, on September 6, 1916, Saunders launched the self-service revolution in the United States by opening the first self-service Piggly Wiggly store, at 79 Jefferson Street in Memphis, Tennessee, with its characteristic turnstile at the entrance. Customers selected goods for themselves from the shelves and paid cash.

The store incorporated shopping baskets, self-service branded products, and checkouts at the front. Removing unnecessary clerks, creating elaborate aisle displays, and rearranging the store to force customers to view all of the merchandise were just some of the characteristics of the early Piggly Wiggly stores. The concept of the "Self-Serving Store" was patented by Saunders in 1917.

Though this format of grocery market was drastically different from its competitors, the style became the standard for the modern grocery store and later supermarket. By 1922, six years after opening the first store, Piggly Wiggly had grown into 1,200 stores in 29 states. By 1932, the chain had grown to 2,660 stores doing over $180 million annually. Piggly Wiggly stores were both owned by the firm and franchised.

The success of Piggly Wiggly encouraged a raft of imitators, including Handy Andy stores, Helpy Selfy stores, Mick-or-Mack stores and Jitney Jungle, all of which operated under patented systems.[1]

Saunders then listed Piggly Wiggly on the New York Stock Exchange.

Saunders's US patent for the store design.

Wall Street raid

In the early 1920s Saunders began construction of a pink marble mansion in Memphis. Then, in early 1923, a group of franchised outlets in New York failed. Merrill Lynch and other speculators on Wall Street attempted a bear raid on the price of Piggly Wiggly stock, gambling the price would fall. With a loan of $10 million from a number of Southern bankers, plus a bit of his own money, Saunders counteracted with a corner, buying large amount of Piggly Wiggly stock in hopes of driving up the price. He flamboyantly declared his intent in newspaper ads. Saunders bought Piggly Wiggly stock until he had orders for 196,000 of the 200,000 outstanding shares. The firm's share price went from a low of $39 in late 1922 to $124 by March 20, 1923. Pressured by the ‘bears’, the New York Stock Exchange declared a ‘corner’ existed (see cornering the market), and gave the ‘bears’ five days rather than 24 hours to deliver the stock Saunders had bought. The additional time meant "a flood of stock poured [in] from distant points and gave the shorts opportunity to deliver."[2] In addition, Saunders’ bank and his friends were pressured and the price was driven back down. Saunders had to sell his stock at a loss and battle cost him $3 million, forcing him into bankruptcy. Afterwards, Saunders had no further association with the company.

Because of this financial reversal, Saunders was forced to sell his partly completed Memphis mansion to the city. The mansion, nicknamed the Pink Palace eventually became the city's historical and natural history museum. Today, the Pink Palace includes a walk-through model of the first Piggly-Wiggly store, complete with 2¢ packets of Kellogg's Cornflakes and 8¢ cans of Campbell's Soup. Some of the grounds of the mansion were sold off to developers who built an upscale residential development, Chickasaw Gardens.

Sole Owner Stores

In a move reminiscent of that of John Walter Scott’s in 1889, he went on to create the "Clarence Saunders Sole Owner of My Name Stores" chain in 1928. The chain, which was known by the public as "Sole Owner" stores, initially flourished, with 675 stores operating and annual sales of $60 million in 1929. However the chain went into bankruptcy in 1930 at the start of the Great Depression.

During World War II, Saunders designed and sold wooden toys.

The Tigers football team

In the late 1920s, to promote his newest grocery venture, Saunders founded a professional football team. The full name of the team was the Clarence Saunders Sole Owner of My Name Tigers, but it was usually just called The Tigers. The Tigers played professional teams from around the country, including the Chicago Bears and the Green Bay Packers. In 1929, the Tigers beat the Green Bay Packers 20-6. In 1930 the National Football League invited The Tigers to join their organization, but Saunders refused their offer. It is claimed that Saunders disbanded his football team because he did not like to travel to other cities for away games.[3]

Keedoozle

Main article: Keedoozle

Then, in 1937, Saunders designed and constructed a prototype of an automated store, which he called the "Keedoozle" (for "Key Does All"). The Keedoozle was a completely automated store, similar to very large vending machine, based on modern supply chain principles.

Merchandise was displayed as single units each within a glass cabinet under which was a keyhole. Customers entering the store were handed a small pistol-like key that they placed in the keyhole below the goods they wished to buy, the quantity being determined by the number of times they pulled the key's trigger. This action, recorded on punched tape, activated back office machinery to assemble the order, which was then dispatched to the checkout on a conveyor belt. On reaching the checkout, the customer's tape was run through a reader to produce the bill, their groceries being assembled, boxed and waiting for collection. This system eliminated the need for shopping carts; and it increased savings in space, in the labor needed to stock the shelves, and in the time customers spent queuing at the checkout.

Saunders developed two versions of the Keedoozle. The first was developed in 1937, the development of which was abandoned when the United States entered World War II. Saunders returned to the idea in 1948, opening an improved version. Saunders sold twelve franchises to the revised concept. In 1949 he predicted: "In five years there will be a thousand Keedoozles throughout the U.S., selling $5 billion worth of goods."[4]

Unfortunately the machinery, much of which Saunders built himself, proved unreliable, particularly at busy times and the resulting delays coupled with a heavy maintenance bill killed the Keedoozle for good in 1949.

Foodelectric

Until the time of his death on 23 September 1953, Saunders was developing plans for another automatic store system called the "Foodelectric." The Foodelectric concept is a clear predecessor to self checkout. Saunders described it as follows:

"The store operates so automatically that the customer can collect her groceries herself, wrap them and act as her own cashier. It eliminates the checkout crush, cuts overhead expenses and enables a small staff to handle a tremendous volume... I can handle a $2 million volume with only eight employees."[5]

The central invention was a primitive computer, or "shopping brain" which was loaned the shopper, who then roams among the store's glass-enclosed items. To get a box of noodles, she slips the computer into a slot. The price registers in the computer and the noodle box slides down a chute. When she reaches the cashier, there is no need to wait while the prices of individual items are rung up. She simply pays the total displayed on the computer's windowed forehead.[6]

The store, which was to be located two blocks from the first Piggly Wiggly store in downtown Memphis, never opened.

Saunders had a reputation for brilliance, contrariness, and eccentricity. Sadly, his death came just as the full impact of his "better idea" for grocery merchandising was becoming apparent; his creative genius was decades ahead of his time.

Personal life

Saunders was a Methodist. He had three children with his first wife Carolyn Walker. He divorced his first wife in 1928 and later married Patricia Bomberg, with whom he had one daughter.

Miscellaneous

Saunders never ran for public office. He was one of the first to use newspaper advertising to campaign for a political candidate, at least in Tennessee. He campaigned for Austin Peay, an acquaintance from his hometown, Clarksville, Tennessee. Peay won in 1922 and gave credit to Saunders' advertising. When Governor Peay ran for a third term in 1926 (Tennessee governors held office for two year terms then) Saunders inexplicably opposed him, using newspaper ads to denounce his former friend. In 1928 Saunders backed Henry Horton for Governor against Hill McAlister. Memphis political leader E. H. Crump backed McAlister. The candidates were completely overshadowed by the newspaper advertising war waged by Saunders and Crump. Each used insulting language not often seen in political ads today. Their feud was personal and striking, since few in Memphis had dared challenge Crump, one of the legendary city bosses in American politics. After 1928 Saunders' fortunes declined, and he did not write political ads again.

Patent

References

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  1. ↑ Economics of Retailing; Paul Henry Nystrom, 1930,
  2. ↑ Wall Street Journal, Jun 23, 1923
  3. ↑ Lauderdale, Vance Ask Vance: Coach Houses Memphis Magazine March 1, 2008
  4. ↑ Life magazine, Jan 3, 1949, p36
  5. ↑ Inventors & Inventions; ed Doris Simonis; p1298; ISBN 0-7614-7761-6
  6. ↑ Mehling, H (August 9, 1956). "They're Putting the Glamour in the Groceries". Saturday Evening Post 229 (6): 32–58. Retrieved 31 August 2011.

Further reading

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