Fedco
Encyclopedia
Federal Employees' Distributing Company, known as Fedco, was a membership department store
chain that operated in Southern California
from 1948 to 1999.
. It was founded by 800 U.S. Post Office
employees who wanted to leverage their buying power by purchasing goods directly from wholesalers. The Board of Directors headed by Robert Kee established the first store on Slauson Avenue in Los Angeles. Members would come into the store and find items they wished to purchase in various catalogues. As demand grew the Board of Directors began to carry merchandise in the store. Business flourished and they took over adjoining storefronts. Under the guidance of Board President Robert Kee FedScript was developed. This allowed for a form of "borrowing" but ensured that the funds could only be spent at FEDCO. Lines included general merchandise, grocery, and in some locations, auto services and furniture. MA lifetime membership was less than five dollars for employees of the U.S. government, students, and their family members. In later years, Fedco membership opened to the general public, with memberships being sold at swap meets. Fedco's lifetime membership cost $10 in 1998.
At its peak, Fedco had ten department stores plus three appliance-only stores, and served 4 million members.
concept. The customer/member was presented with a wide variety of consumer products: camera equipment, office machines, major and minor appliances, garden supplies, clothing, jewelry, liquor and groceries. The stores also had a full-service deli and a separate produce department. Many stores also had a tire and battery shop. The corporate buyers often found one-of-a-kind deals on miscellaneous items. At the holiday season the garden department became a toy shop.
The stores were tightly managed. To foster smooth operation, romantic interest between employees was discouraged, and married couples were not allowed to hold Fedco jobs concurrently.
Some of the departments around the periphery of the building were not Fedco businesses, but were concessions operated by others. For example, the Stereo Components department was run by Coastron, seller of the Soundcraftsmen
line of stereo equipment. Coastron paid rent to Fedco to operate in the building. Other concessions included the Optical Department (later bought out by Fedco), the Shaver Shop, and the Key & Lock Shop. Fedco offered a variety of private label
items, including electronics, liquor, watches and some groceries.
The membership model was successful for Fedco for decades. It was common for the stores to be crowded, with long lines at checkout. A picture of a packed LA Coliseum, posted above the drinking fountain near the exit of the San Bernardino store, proclaimed, "More people shop at Fedco stores each week than the attendance of the 1984 Olympic Games
opening ceremonies!" There were separate registers for general merchandise, groceries and produce. At one time purchased merchandise was placed in a bag and a color-coded tape was placed on the stapled bag. The tape color varied from day to day to prevent theft. In later years as merchandise was bagged, the bags were stapled shut and the receipt stapled on the top. In a precursor to the common practice at most membership clubs today, the sealed bags and receipts were checked at the exit.
Fedco had an aggressive pricing model and employed "secret shoppers" to determine prices of other retailers. The Fedco price on many items ended in 87 cents to claim the lowest price, even if it was only pennies below the customary 99 cent prices of competitors.
For most of its lifetime, Fedco was closed on Wednesdays, though some employees would work re-stocking or taking inventory. During the Christmas season, Fedco was open 7 days a week to accommodate the customer surge. Fedco would sometimes require employees to work up to 10 hours a day. Working 6 days a week was possible during Summer surge and Christmas Season.
Fedco employees were members of the Teamsters Union
, many in Local 232 and 542. They struck
the company in the summer of 1979 seeking higher pay as compared to members of the Retail Clerks Union
. The strike was resolved after about 3 weeks.
, Kmart
, Ames, and fellow membership chain Costco
, but remained a regional chain and eventually was unable to compete with the national chains. Fedco filed for Chapter 11 bankruptcy in 1999, at which point it had been the longest-operating membership-based store in the country. Most of its locations were sold to the Target
chain, while others (like the Escondido, California
location) were eventually torn down, and the Ontario location eventually became the city's police department. The $10 lifetime membership at Fedco was exchanged for a $300 Target coupon book at the 1999 bankruptcy. The proceeds of the bankruptcy sale were placed in a trust fund intended to charitably serve communities that had hosted Fedco stores.
Department store
A department store is a retail establishment which satisfies a wide range of the consumer's personal and residential durable goods product needs; and at the same time offering the consumer a choice of multiple merchandise lines, at variable price points, in all product categories...
chain that operated in Southern California
Southern California
Southern California is a megaregion, or megapolitan area, in the southern area of the U.S. state of California. Large urban areas include Greater Los Angeles and Greater San Diego. The urban area stretches along the coast from Ventura through the Southland and Inland Empire to San Diego...
from 1948 to 1999.
Beginning
The chain was unusual in that it was a nonprofit consumers' cooperativeCooperative
A cooperative is a business organization owned and operated by a group of individuals for their mutual benefit...
. It was founded by 800 U.S. Post Office
United States Postal Service
The United States Postal Service is an independent agency of the United States government responsible for providing postal service in the United States...
employees who wanted to leverage their buying power by purchasing goods directly from wholesalers. The Board of Directors headed by Robert Kee established the first store on Slauson Avenue in Los Angeles. Members would come into the store and find items they wished to purchase in various catalogues. As demand grew the Board of Directors began to carry merchandise in the store. Business flourished and they took over adjoining storefronts. Under the guidance of Board President Robert Kee FedScript was developed. This allowed for a form of "borrowing" but ensured that the funds could only be spent at FEDCO. Lines included general merchandise, grocery, and in some locations, auto services and furniture. MA lifetime membership was less than five dollars for employees of the U.S. government, students, and their family members. In later years, Fedco membership opened to the general public, with memberships being sold at swap meets. Fedco's lifetime membership cost $10 in 1998.
At its peak, Fedco had ten department stores plus three appliance-only stores, and served 4 million members.
Business model
The management strove to make Fedco a one-stop shopping destination, similar to a hypermarketHypermarket
In commerce, a hypermarket is a superstore combining a supermarket and a department store. The result is an expansive retail facility carrying a wide range of products under one roof, including full groceries lines and general merchandise...
concept. The customer/member was presented with a wide variety of consumer products: camera equipment, office machines, major and minor appliances, garden supplies, clothing, jewelry, liquor and groceries. The stores also had a full-service deli and a separate produce department. Many stores also had a tire and battery shop. The corporate buyers often found one-of-a-kind deals on miscellaneous items. At the holiday season the garden department became a toy shop.
The stores were tightly managed. To foster smooth operation, romantic interest between employees was discouraged, and married couples were not allowed to hold Fedco jobs concurrently.
Some of the departments around the periphery of the building were not Fedco businesses, but were concessions operated by others. For example, the Stereo Components department was run by Coastron, seller of the Soundcraftsmen
Soundcraftsmen
Soundcraftsmen was a manufacturer of high-end audio stereo components located in Santa Ana, California, United States.The company was founded in 1961 by Ralph Yeomans, a concessionaire in Fedco . Early Soundcraftsmen components included tube-type receivers and amplifiers...
line of stereo equipment. Coastron paid rent to Fedco to operate in the building. Other concessions included the Optical Department (later bought out by Fedco), the Shaver Shop, and the Key & Lock Shop. Fedco offered a variety of private label
Private label
Private label products or services are typically those manufactured or provided by one company for offer under another company's brand. Private label goods and services are available in a wide range of industries from food to cosmetics to web hosting...
items, including electronics, liquor, watches and some groceries.
The membership model was successful for Fedco for decades. It was common for the stores to be crowded, with long lines at checkout. A picture of a packed LA Coliseum, posted above the drinking fountain near the exit of the San Bernardino store, proclaimed, "More people shop at Fedco stores each week than the attendance of the 1984 Olympic Games
1984 Summer Olympics
The 1984 Summer Olympics, officially known as the Games of the XXIII Olympiad, was an international multi-sport event held in Los Angeles, California, United States in 1984...
opening ceremonies!" There were separate registers for general merchandise, groceries and produce. At one time purchased merchandise was placed in a bag and a color-coded tape was placed on the stapled bag. The tape color varied from day to day to prevent theft. In later years as merchandise was bagged, the bags were stapled shut and the receipt stapled on the top. In a precursor to the common practice at most membership clubs today, the sealed bags and receipts were checked at the exit.
Fedco had an aggressive pricing model and employed "secret shoppers" to determine prices of other retailers. The Fedco price on many items ended in 87 cents to claim the lowest price, even if it was only pennies below the customary 99 cent prices of competitors.
For most of its lifetime, Fedco was closed on Wednesdays, though some employees would work re-stocking or taking inventory. During the Christmas season, Fedco was open 7 days a week to accommodate the customer surge. Fedco would sometimes require employees to work up to 10 hours a day. Working 6 days a week was possible during Summer surge and Christmas Season.
Fedco employees were members of the Teamsters Union
Teamsters
The International Brotherhood of Teamsters is a labor union in the United States and Canada. Formed in 1903 by the merger of several local and regional locals of teamsters, the union now represents a diverse membership of blue-collar and professional workers in both the public and private sectors....
, many in Local 232 and 542. They struck
Strike action
Strike action, also called labour strike, on strike, greve , or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became important during the industrial revolution, when mass labour became...
the company in the summer of 1979 seeking higher pay as compared to members of the Retail Clerks Union
Retail Clerks International Union
The Retail Clerks International Union , was a labor union that represented retail employees. The RCIU was chartered as the "Retail Clerks National Protective Union" in 1890 by the American Federation of Labor. It later adopted the name Retail Clerks International Association, and subsequently...
. The strike was resolved after about 3 weeks.
Fedco stores
Fedco had several locations in Southern California including:- Los Angeles (originally located on Slauson Ave, later relocated to La Cienega Blvd)
- Pasadena
- San Bernardino
- San Diego (Webster/Oak Park area) (closed when the Nat'l City store opened)
- San Diego (National City)
- Cerritos
- Costa Mesa
- Buena Park
- Ontario
- Van Nuys
- Escondido
- Lakewood (closed when the Cerritos store opened)
Fedco Reporter
The Fedco Reporter was the store's catalog and magazine. Board President Robert Kee and Edward Butterworth were instrumental in establishing the Reporter. Edward Butterworth rose from company attorney to Board member to the position of CEO. The department was run by art director and department manager Thomas Kimball and editor Michele Brunmier. The Reporter was a bi-monthly 62-page dated catalog mailed to members. There were seasonal specials and sales with themes like "Buyers' Goof Days". In addition to showcasing products, it also contained short one-column articles. Most issues contained one article about updates in federal policy that might affect federal employees. The majority of the articles were about minor but colorful stories in California history, and were labeled with a "California Historical" logo.Bankruptcy
Fedco predated the giant chains Walmart, TargetTarget Corporation
Target Corporation, doing business as Target, is an American retailing company headquartered in Minneapolis, Minnesota. It is the second-largest discount retailer in the United States, behind Walmart. The company is ranked at number 33 on the Fortune 500 and is a component of the Standard & Poor's...
, Kmart
Kmart
Kmart, sometimes styled as "K-Mart," is a chain of discount department stores. The chain acquired Sears in 2005, forming a new corporation under the name Sears Holdings Corporation. The company was founded in 1962 and is the third largest discount store chain in the world, behind Wal-Mart and...
, Ames, and fellow membership chain Costco
Costco
Costco Wholesale Corporation is the largest membership warehouse club chain in the United States. it is the third largest retailer in the United States, where it originated, and the ninth largest in the world...
, but remained a regional chain and eventually was unable to compete with the national chains. Fedco filed for Chapter 11 bankruptcy in 1999, at which point it had been the longest-operating membership-based store in the country. Most of its locations were sold to the Target
Target Corporation
Target Corporation, doing business as Target, is an American retailing company headquartered in Minneapolis, Minnesota. It is the second-largest discount retailer in the United States, behind Walmart. The company is ranked at number 33 on the Fortune 500 and is a component of the Standard & Poor's...
chain, while others (like the Escondido, California
Escondido, California
Escondido is a city occupying a shallow valley ringed by rocky hills, just north of the city of San Diego, California. Founded in 1888, it is one of the oldest cities in San Diego County. The city had a population of 143,911 at the 2010 census. Its municipal government set itself an operating...
location) were eventually torn down, and the Ontario location eventually became the city's police department. The $10 lifetime membership at Fedco was exchanged for a $300 Target coupon book at the 1999 bankruptcy. The proceeds of the bankruptcy sale were placed in a trust fund intended to charitably serve communities that had hosted Fedco stores.
Sources
- Karen Newell Young, "Discount Stores in County Proliferate: A Profile of Fedco,", Los Angeles TimesLos Angeles TimesThe Los Angeles Times is a daily newspaper published in Los Angeles, California, since 1881. It was the second-largest metropolitan newspaper in circulation in the United States in 2008 and the fourth most widely distributed newspaper in the country....
(Orange County ed.) February 19, 1988, Orange County Life p. 8.