Business Model
The management strove to make Fedco a one-stop shopping destination, similar to a hypermarket 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.
Read more about this topic: Federal Employees' Distributing Company, History
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