Brookshire Grocery Company History

Address:

1600 West South West Loop 323
P.O. Box 1411
Tyler, Texas 75710
U.S.A.

Telephone: (903) 534-3000
Fax: (903) 534-2206

Private Company
Incorporated: 1928
Employees: 3,700
Sales: $1 billion (1995 est.)
SICs: 5411 Grocery Stores

Company Perspectives:

Brookshire's is one of today's most respected grocery chains, with its stores operating under the same philosophy today as always--that of offering exceptional customer service and providing the cleanest stores in town while maintaining a reputation for being an innovative trend setter.

Company History:

The Brookshire Grocery Company operates more than 100 supermarkets in Texas, Arkansas, and Louisiana. In addition to the standard fare of grocery items, company stores feature specialty departments including bakeries, delicatessens, floral shops, fresh fish and seafood counters, salad bars, and pharmacies. Long known for its concentration on customer service, the Texas-based company has two main operations: Brookshire Grocery, with its more than 80 full-service--and some say elegant--supermarkets, which average around 40,000 square feet; and Super 1 Stores, with its approximately 20 no-frills self-service stores, which range from 80,000 to 100,000 square feet. The billion-dollar company also boasts two distribution centers, two bakery plants, a dairy plant, and its own manufacturing complex. Founded during the late 1920s, the company is widely respected for its long tradition of friendly service, clean stores, and technological innovation.

Early History

The humble origins of the Brookshire Grocery Company date back to 1928 and a 25 x 100-foot store in Tyler, Texas. The store was one of several stores in east Texas operated by the company's founder, Wood T. Brookshire, and his five brothers under the name Brookshire Brothers. The Brookshire brothers set out to build a local chain of grocery stores at a time when the chain store concept, which originated in the latter half of the nineteenth century with such grocery giants as the Atlantic & Pacific Tea Company (A & P) and the Kroger Company, had captured the imagination of many aspiring entrepreneurs. With mammoth chains such as A & P adding 10,000 stores during the decade, the Brookshire brothers attempted to build their own grocery empire by carving out a profitable niche in the east Texas market.

In keeping with the most progressive grocers of the era, the Brookshires adopted the self-service concept in their first stores. Customers, instead of first placing an order for a sales clerk to fill, made their own selections while following a more or less prescribed path designed to expose them to the appeal of the goods on the shelves. This innovative strategy, the forerunner to the modern supermarket, enabled grocers like the Brookshires to reduce operating expenses and, in turn, cut prices and build a strong customer base.

During the early 1930s, the supermarket gradually replaced the small grocery store. Like other grocers of the period, Brookshire operated its stores on a self-service basis and furnished its customers with larger displays of a wide variety of groceries as well as fresh meats, fruits, and vegetables. By dealing in a larger volume, the company was able to market its goods at aggressively low prices, while increasing profits and expanding its business.

In 1939, the Brookshire brothers dissolved their partnership, and Wood became the sole owner of three stores in Tyler, known by the trade name Brookshire's Food Stores, which later became the foundation for the 100-store company of the 1990s. Despite the economic hardships of the Great Depression, the company managed to expand its operations through the late 1930s: by the end of the decade, the fledgling grocery chain had opened its fourth store in the Tyler and Longview area, including the first air-conditioned store in east Texas.

The Postwar Period

Growth continued through the World War II years and the rest of the 1940s as five more stores were added to the east Texas area, in Winnsboro, Longview, Gladewater, and Kilgore. Like many businesses across the country, Brookshire's prospered during the favorable economic conditions of the postwar era; expansion continued at a steady rate.

The years following the war, however, also brought a new challenge to Brookshire Grocery and the rest of the industry. For more than a century, grocery stores were located on the Main Streets of the country and the downtown areas of large cities. As the population shifted from the cities to the suburbs following the war, though, serious parking problems arose in traditional shopping areas, creating the need for a new retail facility and a new grocery store location: the suburban shopping center. Not to be left behind by this change in the industry, Brookshire's constructed its first shopping center store before the close of the 1940s.

With the favorable economic conditions of the 1950s and the Eisenhower years, came further expansion for the company. To keep up with the growing demand from new stores in Corsicana, Marshall, Paris, Greenville and Mt. Pleasant, Brookshire's constructed its first grocery warehouse in 1953. With the onset of a new decade, the 17-store chain extended its operations beyond the Texas state line for the first time, venturing into the Louisiana market and opening stores in Bossier City and Natchitoches. New stores in Wills Point, Terrell, Palestine and Mineola, Texas, brought the total number of Brookshire stores to 31 by the end of the decade. In 1968, to better supply these existing stores and prepare for continued growth, the company erected a 175,000-square-foot distribution center in Tyler.

Expansion in the 1970s and 1980s

The 1970s proved to be a decade of record growth for Brookshire Grocery. By 1975, despite the obstacles of a national energy crisis and a recessionary economy, the company had opened 13 new stores and made its way onto the Chain Store Age list of the fastest growing grocers. Two years later Brookshire's made its first appearance on the publication's list of the 100 largest food chains, recording an estimated $175 million in total revenue. During the remainder of the decade, revenue jumped more than 30 percent as the company inched its way up to number 76 on the list in a market dominated by such multibillion dollar giants as Safeway, Kroger, and A & P--despite operating in a comparatively small geographical area. While doubling its size to 62 supermarkets, Brookshire's did set up for business in a third state, opening three new stores in Arkansas as well as its first bakery plant.

This pattern of expansion continued into the early 1980s despite the recessionary conditions of the U.S. economy. In 1982, the company generated $350 million in revenue, having doubled its output in just seven years. By 1984, Brookshire's operated more than 70 stores and employed more than 4,000 people in its three-state region. In its home base of Tyler, with a population of 75,000, the company's eight stores enjoyed a 40 percent market share, despite the presence of at least 15 grocery stores in the area.

The strategy that enabled the company to experience such steady growth to this point was simple: beat the competition on strong and friendly service. As then president C. B. Hardin explained to Doug Harris of Supermarket Business, the company's strategy of "aggressive hospitality" demanded a strong commitment to service from its employees: "Our philosophy is when you come into one of our stores we want you to be greeted just as nice as if you were coming into our living room--because you're our guest, and the customer is our boss." With increasing competition from such mainstays as Kroger and newcomers as Tom Thumb-Page, Brookshire's fashioned its Southern hospitality into a well-orchestrated effort to please customers and stand out from the competition. With many of its stores located in oil-rich areas, the company attempted to out do the competition on service rather than price, making sure that customers were not only greeted at the door when they entered and at the checkout when they left but given heartfelt greetings from stockers and service counter employees as well. "We'd rather overdo it than underdo it," Hardin told Supermarket Business.

It would take more than friendly service, though, for Brookshire's to continue growing during the 1980s. As more and more competitors entered the scene, the company attempted to broaden its customer base by diversifying its operations and continuing its strategy of growth through geographical expansion. Chief among these developments was the company's opening of its first Super 1 Foods store in Alexandria, Louisiana, in 1984. In contrast to the traditional Brookshire store, with its elegant decor and state of the art technology, the new line of stores cut back on the frills so that it could offer the lowest prices possible.

Between 1984 and 1990, the company opened 11 Super 1 Foods stores in Louisiana and Texas. Unlike competitors in the wholesale foods market such as Sam's Wholesale Club, the Super 1 stores required no membership fees and were generally smaller in size. The new warehouse-type environment enabled customers to save money--usually around $15 a week--by purchasing in larger quantities and bagging their own groceries. Although the Super 1 Foods stores were designed to keep labor costs low, they retained the colorful decor and many of the specialty departments that had become a fixture at the full-service stores and, in this way, distinguished themselves from many other competitors in the wholesale market.

One of the money-saving innovations at the company's warehouse-style stores could be found at the checkout stand. While the full-service Brookshire's stores emphasized ambiance and an aesthetically pleasing checkout environment, the Super 1 units concentrated on getting customers through the checkout faster. To meet this goal, the company began installing triple belt checkstands in its 65,000-square-foot Super 1 units. The "Tri-Belt" system features an initial belt at the head of the checkstand that carries items to the scanner position and a second belt that moves each customer's scanned and paid-for order to a bagging station where the consumer bags his or her own order.

While diversifying its operations in the mid-1980s, the company also attempted to reduce costs by taking advantage of the latest computer technology. In 1984 the company replaced its mechanical time-clocks with microcomputer-based time accounting systems. With more than 4,000 employees in its 70 stores, the manual processing of weekly payroll had become a monstrous task for the 18 payroll clerks who had to recalculate and verify all time-cards in less than 24 hours. The short turnaround time prevented clerks from correcting overpunches and illegal punches--errors that were costing the company thousands of dollars weekly. Once the new computerized accounting system was installed, though, store managers were able to not only reduce such discrepancies but better monitor employee overtime as well. With payroll processing time cut in half, the front office was able to spend more time collecting on bad checks and handling other administrative duties. The bottom line, as then personnel administration supervisor Dan Adcock stated in Chain Store Age Executive, was a savings of about $500 per week per store.

The 1990s and Beyond

One of the keys to Brookshire's continued success during the early 1990s was its traditional emphasis on serving the customer. Attracting shoppers to its Tyler stores in the face of an increasingly competitive market, however, required more than smiling cashiers and friendly stockers; it also meant responding to the cultural diversity and unique needs of its clientele. The transformation process for one Brookshire's store converted to a Super 1 Foods warehouse store, for instance, meant substantially increasing the Hispanic foods section to appeal to the area's small but rapidly expanding Hispanic population. By doubling the size of the Hispanic section through the addition of existing items and new foods such as corn tortilla mixes and sliced cactus and advertising in a local Hispanic paper, the store was able to attract customers from what had been, for the most part, an untapped market. By 1991, Hispanic shoppers represented nearly one-third of the store's total clientele.

Brookshire's transition into the discount foods market coincided with its move into the Dallas/Fort Worth area. New stores were opened in Allen, McKinney, and The Colony during the late 1980s. To keep pace with this steady expansion, the company added more than 250,000 square feet to its distribution center before the end of the decade, and in 1991, the company brought its first warehouse-type store to the area, opening a mammoth 100,000-square-foot Super 1 Foods in Plano. Two years later, Brookshire's increased its presence in the area's discount market, purchasing land for a new 70,000-square-foot Super 1 Foods in Garland. By 1995, the company had established a strong presence in the Dallas suburbs, with seven stores in operation.

The early and mid-1990s saw Brookshire's solidify its presence in existing markets and venture into new territory. The company's expansion to the east resulted in the construction of a second distribution center in 1992, located in Monroe, Louisiana. The state also became the site of Brookshire's 100th store, which opened in Marksville, in 1994. That same year the company, while boosting its total revenue to an estimated $700 million, acquired a 491,000-square-foot manufacturing facility near Tyler.

In addition to opening its own stores, Brookshire's sought to boost its share in various Texas markets by acquiring 16 stores from Thrift Mart, a $90 million, independent, family-run chain based in Granbury that got its start in the 1950s. Terms of the agreement were not released. The acquisition, which included stores in Fort Worth, Hurst, Aledo, and Granbury, represented the company's debut in the Fort Worth area and was heralded by company officials as a way to further increase the growing chain's buying power and offer its customers lower prices.

In an attempt to maintain its reputation for customer service excellence, Brookshire's entered into a multimillion dollar contract with the NCR Corporation for the latest in state-of-the art store automation technology. The installation plan, instituted in early 1996, called for an advanced checkout system that included an innovative, user-friendly, ATM-style interface designed to make checkouts faster and reduce employee training costs--by as much as 60 percent according to some estimates.

By improving the efficiency of its operations and by meeting the diverse needs of its customers through its upscale and warehouse stores, Brookshire's entered the late 1990s hoping to ward off the threat from a new competitor into the grocery market: the supercenter, a combination general merchandise and grocery market under one big roof. Having opened its first supercenter in Texas in 1992, Wal-Mart--which controlled 42 percent of the discount retail market in 1995 and employed one out of every 200 employed people in the United States--attempted to carve its own niche in the $390 billion grocery business, opening its 54th supercenter in Texas and its 230th nationwide in 1995. While the discount giant's increasing presence did not significantly affect Brookshire's larger markets, it did promise to threaten the company's market share in smaller communities where customers have to drive a greater distance to do their shopping and thus realize more benefits from the convenience of supercenters.

Brookshire Grocery Company History

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