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09/25/2008

10 Retailers That Shook the World

Joe Skorupa
Editor at Large
Joe Skorupa profile picture
By Joe Skorupa

Retailing is the first or second oldest profession, depending on how you define it. So, it has a long history populated by visionaries like Wanamaker, Woolworth and Marshall Field. But even though these giants were innovators, the businesses they founded have not survived. Here is a list of 10 major retailers that not only changed the world around us, but are still going strong today.

In alphabetical order, here are 10 retailers that shook the world:

7-Eleven

Yes, there once was a time when you couldn't make a midnight run to the convenience store to pick up Dr. Pepper and bag of jalapeno chips. It took the Southland Ice Company in Dallas, founded in 1927, and Joe Thompson, its president, to make it happen. Thompson initially called the concept Tote'm Stores.

In 1947, the name was changed to 7-Eleven stores to emphasize the extended hours of operation, which ultimately became 24-hour service in the early 1960s. Today, the inventor of the Slurpee and Big Gulp, is privately owned by Seven-Eleven Japan. It rakes in $46 billion in revenue, and operates in 18 countries.
With 34,200 stores it is the world's largest store operator ahead of McDonalds.

Amazon
 
If there is a perfect embodiment of revenge-of-the-nerds syndrome it must be techno-geek Jeff Bezos, founder of Amazon. What launched as an online bookstore in 1995 is now an online everything store that sells products ranging from music and toys to groceries and apparel. It also sells unique products such as the TiVo-like Unbox, the electronic book reader Kindle, and the Segway Human Transporter, for which it is the exclusive retailer.

Seattle-based Amazon also acts as a platform for customers to sell merchandise, powers Web sites for retailers, serves as a multi-channel platform for enterprise clients, makes films, and, finally, offers online data storage, cloud computing and Web-store technology tools. The revenge factor? Bezos still owns 24 percent of the $13 billion company.

Bass Pro Shop

If 7-Eleven is the ultimate in convenience, Bass Pro Shops, from Springfield, Missouri, is the ultimate in customer experience. Its 50 Outdoor World Stores in the U.S. and Canada are cavernous, 280,000-square-foot outlets. They not only sell outdoors accessories, but also include archery ranges, fish tanks, snack bars and outdoors skills classes. The company started in 1976 as a bait and fishing supply store by Johnny Morris, who still owns the company. It quickly morphed into a giant sporting goods cataloguer.

Today, the company reels in an estimated $2 billion in sales from a number of subsidiaries that include a wholesaler, boat manufacturer, 850-acre fishing lodge and several restaurant chains. The original outlet, which opened in 1981 and is called the "grand-daddy," has become a popular attractions complete with a museum of wildlife.

Home Depot

There used to be a time when you went to a hardware store, lumber yard, paint store and plumbing supply shop to purchase home improvement products. That was before 1978 when Home Depot put 45,000 items under a 100,000-square-foot roof.

Thirty years later, $80-billion Home Depot is the second largest retailer in the U.S. operating 2,300 stores. Its rapid rise began in Atlanta when Bernard Marcus and Arthur Blank (along with several others) decided to start their own home-improvement center larger and more comprehensive than any of their competitors. Marcus and Blank had plenty of motivation. They had just gotten fired and wanted to show their old company they could do it better. Getting fired turned out to be a good career move for them and DIYers everywhere.


IKEA

If you have ever struggled with inscrutable directions to assemble a bookcase at home, you can thank Ingvar Kamprad, founder of IKEA. Kamprad began selling a variety of products in 1943, but settled on furniture and home products by the 1950s. To cut transportation costs, he pioneered the use of flat packaging and home assembly.

The first official IKEA store opened in 1958 in Sweden. Today, 35 countries are home to 270 IKEA stores, large warehouse-type buildings with a one-way traffic pattern that winds through the showrooms. Customers write down what they want in the showrooms and then find it themselves in the warehouse. Most stores have Swedish cuisine restaurants and large play areas for children. The name is an acronym for Ingvar Kamprad (the name of the founder) plus Elmtaryd, Agunnaryd (his boyhood home).

King Kullen

Someone had to invent the supermarket, at least that's what Michael Cullen thought in 1929 when he worked for Kroger. He developed a business plan for a new concept of self-service, high-volume, highly promoted, discount supermarkets of "monstrous size" that would sell food and non-food products. Kroger wasn't interested, so Cullen found a partner and opened his first King Kullen supermarket in 1930. It was an instant success, averaging 20 times the volume of its competitors.

While the chain didn't conquer the world, the concept Cullen pioneered was widely imitated. Today, it is roughly a billion-dollar company with 51 stores throughout the metro New York City area and is still owned by the Cullen family.

Sears

Although it has seen better days, Sears is a $50-billion giant with a storied pedigree. It began with Richard Sears, a mail-order catalog pioneer in the early 1890s. He teamed up with Alvah Roebuck to push the concept as far as it would go by printing catalogs 500 pages long and featuring a range of products that included refrigerators, stoves, automobiles and houses.

The first store opened in 1925, and in the 1980s Sears was the largest retailer in the U.S. But in recent decades it has suffered from too many owners, too much diversification, and too much Walmart. Today, there are 3,900 stores in the chain counting Kmart, which merged with Sears in 2005. It built Chicago's 110-story Sears Tower in 1974, once the world's tallest building, which it no longer occupies.

Starbucks

Howard Schultz didn't start Starbucks, but he knew what to do with it once he got it. Today, there are 16,000 Starbucks coffee shops in more than 44 countries. It also owns Seattle's Best Coffee, Torrefazione Italia coffee brands and sells music, books, coffee equipment and branded products through grocery stores.

What started as a simple chain of high-quality coffee houses has become a $9.5-billion force of nature. Although it was founded in 1971, it began its meteoric rise in 1984 when Schultz acquired it. In addition to offering customized beverages,
Starbucks is frequently cited as one of the country's best places to work. And with its stuffed chairs and wireless connectivity it is frequently cited as the "third place" (after home and work).

Walmart

What more can be said about the number one retailer in the world and America's largest corporation? The numbers for Walmart are staggering. It operates 7,250 stores, employs two million people, pulls in revenue approaching $400 billion, and sells to a third of all Americans each week.

What began as Sam Walton's Five and Dime in 1950 has become a leviathan of international expansion, innovative technology, disciplined business operations, and a relentless pursuit of driving down prices. Walmart's formula for success has shifted over the years from serving rural communities to supply chain efficiency to buy American first to buy Chinese first to unbridled expansion. But one thing it never loses focus on is offering the lowest possible prices. Customers will never turn their backs on a bargain.

Whole Foods

John Mackey was way ahead of the shift by consumers to eating health-conscious foods. He founded Whole Foods in 1980 in Austin, Texas, and rode the natural, organic and fresh foods wave as it became the fastest growing segment in the grocery business.

But this alone would not have created the 275-store, $10-billion giant that Whole Foods has become. Mackey is a relentless acquirer of regional natural food chains, an approach that culminated in the recent purchase of main competitor, Wild Oats Markets. A big part of Whole Foods' appeal, aside from the health-conscious food, is a self-imposed standard for selling products that are natural, animal friendly, socially and ethically produced, and environmentally responsible.

Criteria for the above list were simple. It must be a chain of $100 million or more, exert broad influence on other retailers, and still be in business. Many were the first of their kind, but not all. Some that could have made the list included Apple Stores, Build-a-Bear Workshop, Dell and Zara. Maybe next time.

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