The jammed parking lot in front of the new, expanded Price Co. warehouse on Morena Boulevard is a far cry from the disturbingly empty parking lot that greeted passers-by when the first Price Co. warehouse opened 10 years ago, on July 5, 1976.
Back then, worried managers asked employees to park their cars out in front, hoping to create the illusion that business was booming for the fledgling wholesale warehouse.
The parking lot tactics were only partly successful, and the company created by Sol and Robert Price, father and son, ended its first two months of operations with a $420,000 net loss on $278,000 in revenue--less than what the company now sells during a single day at each of its 24 locations around the country.
Although Price Co. started out by wholesaling goods strictly to businesses with resale licenses, the company wasn't "selling enough to survive," according to Executive Vice President Giles Bateman, who was quoted in the first edition of a tabloid newspaper the Price Co. recently mailed to its members in San Diego and the Bay Area.
To bolster revenue back then, the company bent its strict membership rule to include "group" members, the individuals who, by paying an additional 5% above what business members paid, could share in the company's low prices.
"That saved our bacon," Bateman said in the interview.
The company recorded its first profit in the spring of 1977.
During the following decade, Price Co.'s novel wholesale approach sparked a geometric growth pattern that generated $46 million in net profits and $1.8 billion in revenue during the fiscal year ended Aug. 31.
Based on those figures, Price Co. is now the largest publicly held San Diego-based company, with revenue topping longstanding local corporate giants San Diego Gas & Electric ($1.7 billion) and Pacific Southwest Airlines ($689 million).
Despite that remarkable growth rate, Price Co. probably will limit the 10th anniversary of its creation--and the spawning of what industry analysts have described as "the most exciting development in retailing today"--with a small get-together for the company's original employees and an open house at the company's new Morena Boulevard facility, according to President Robert Price.
However, the company--which still uses book shelves made of cinder blocks and planks in its executive offices--has added a few wrinkles to its basic business of selling products as cheaply as it can.
Perhaps the most noticeable change was the opening of a larger warehouse in a building just yards from the original warehouse building.
Last year, Price Co. again altered its membership rules, instituting a $15 membership fee for group members. Members who pay $15 for the card no longer pay 5% more than their business-member counterparts.
The card program has received "widespread acceptance" and "should further strengthen the long-term relationship between our company and our members," Price said.
To strengthen its geographical base, Price Co. last year announced the creation of an agreement to operate Price Clubs in Canada. The first unit--which could open in the fall in Montreal--will carry the "Club Prix" name.
In the last few months, Price Co. has purchased a meat packing business in El Cajon that supplies beef products for its Southern California warehouses, arranged a Sun Valley, Idaho, skiing weekend for its members and published the first edition of the tabloid newspaper.
Price acquired the meat packing plant because "we think that we understand the numbers well enough to have an investment in it," Robert Price said during an interview last week. He added that owning the plant will "help guarantee quality, secure good prices for our members and generate additional profits."
Although the plant is supplying just ground beef products, Price said it might eventually handle a wider variety of products.
The three-day trip to Sun Valley, which included air fare, lodging, lift tickets, parties and shows, "wasn't too bad," said Price, who added that the company "learned a lot and it seems to have been well-received."
The company offered the vacation package because "we're continuing to piece together what will best serve our clientele," said Price, who has described the company's members as "an affinity group."
Price Co. recently published a company newspaper to provide "business and consumer information" to its members, Price said. The premiere issue featured a lead article that described how "San Diego leads (the) nation in (the) warehouse industry," and a letter from Price, who praised "the special bond that has developed between our company and our members."
Inside, the paper featured a section describing new goods and services available through the company's warehouses, an "exclusive" column by Ralph Nader, and an article describing the risks and rewards of investing.
Although the tabloid contained advertising from a range of companies--including Great American First Savings Bank and Atlas Hotels--Price acknowledged that advertisers were not charged for space. However, the company will sell advertising space in the next issue, scheduled to be printed and mailed early this summer, he said.