Pronto Markets

"The Most Important Strategic Decision Was to Become a Genuine Retailer The fundamental job of a retailer is to buy goods whole, cut them into pieces, and sell the pieces to the ultimate consumers. This is the most important mental construct I can impart to those of you who want to enter retailing. Most “retailers” have no idea of the formal meaning of the word. Time and again I had to remind myself just what my role in society was supposed to be. Many of the policy decisions for a retailer boil down to this: How closely should we stick to the fundamental retailing job? “Retail” comes from a medieval French verb, retailer, which means “to cut into pieces.” “Tailor” comes from the same verb. The fact is that most so-called retailers don’t want to face up to their basic job. In Pronto Markets we did everything we could to avoid retailing. We tried to shift the burden to suppliers, buying prepackaged goods, hopefully pre-price-marked (potato chips, bread, cupcakes, magazines, paperback books) so we had no role in the pricing decision. The goods were ordered, displayed, and returned by outside salespeople. To this day, supermarkets fight with the retail clerks’ union to expand their right to let core store work be done by outsiders. Whole Earth Harry’s moves into wine and health foods had taken us quite a distance into genuine retailing. In our cheese departments we were literally taking whole wheels and cutting them into pieces. I took this as an analogy for what we should do with everything we sold. Getting rid of all outside salespeople was corollary to the programs that would unfold during the next five years. In Mac the Knife, no outsiders of any sort were permitted in the store. All the work was done by employees. The closest thing to it that I see these days is Costco, which shares many features with Trader Joe’s."

"At that point, in February 1966, I wrote what I call a white paper, something that I have tried to do at every important turn of events. I started with the founding of Pronto Markets. In a white paper you try to write down everything you plan to do, and the reason why you think you should do it. That way, when things don’t work out, you can’t play the role of a Soviet historian and airbrush history. The other important use of a white paper is to circulate it to the troops, to engage their support and solicit their ideas."