Fedmart was one of the best discount department stores. The store was so popular that it operated 45 locations in the United States.
If you are curious about what happened to Fedmart and why the store’s owner closed the stores, continue reading the article.
FedMart was founded to serve federal government employees and their families. To shop at FedMart, you need to buy a lifetime membership for $2.
Hours were limited, but shifted toward the evening, when working people had more time to shop. Due to a lack of capital, products were displayed on improvised fixtures or pallets.
Customers could only purchase a couple of versions of a product rather than dozens, and the store was self-service rather than having the personalized service that many had come to expect.
Because of “fair trade” laws, the assortment was restricted to suppliers who did not require minimum pricing.
What happened to Fedmart?
As we all know, FedMart was a chain of discount department stores started by Sol Price, who later founded Price Club.
In the first year of its start, it became highly successful; over the next 20 years, FedMart grew to include 45 stores, mostly in California and the Southwest, in a chain that generated over $300 million in annual sales.
Price later sold two-thirds of the chain to Hugo Mann, a German retail chain, in 1975 and was forced to step down as CEO the following year. And later, FedMart went out of business in 1982.
Why Did Fedmart Shut Down?
FedMart closed primarily due to financial difficulties and an inability to continue operations in the competitive retail landscape.
Despite being a pioneer in the discount department store concept and introducing several innovative practices, the company experienced difficulties in its later years of operation.
FedMart closed primarily due to a change in ownership and management in the mid-1970s.
SOL Price’s Price Club merger into Costco:
Price Club was an American warehouse store chain. It merged with its competitor, Costco Wholesale, in 1993 and adopted the Costco brand name in 1997. The original Price Club warehouse remains open.
According to the reports, Price Club merged with rival Costco in 1993, forming PriceCostco. Price Club and Costco continued to operate independently, with members of either chain able to shop at both locations using their membership cards.
The road from Fed-Mart to Fiesta!
The building was built in 1958 for the Fed-Mart corporation. Items were rarely sold in large bulk lots, and the variety of merchandise ranged from garden centers to groceries, outselling most warehouse clubs.
The reputation of Fed-Mart as a warehouse chain is largely based on the concept that, initially, the stores were only open to members.
The name only added to the confusion, sparking another false rumor that these stores were only for government employees.
However, by the time Fed-Mart arrived in Houston, the membership policy had been considerably relaxed, allowing for many new customers.
Fed-Mart was designed to be a cutting-edge retail facility. Fed-Mart outperformed Wal-Mart, Kmart, Target, Gibsons, and most other discounters.
However, this dominance would not last forever, and by the 1970s, Fed-Mart was under intense pressure.
By 1979, Fed-Mart had six locations in Houston, which was far more than most other cities.
Fed-Mart would sell its Houston locations to the newly expanding Fiesta, which would use the extra space to broaden its selections, a characteristic passed onto other stores.