Speaking of Fedmart or Sol Pierce, basically no one will know these two names in the future, but there must be many people who know about Costco, another company.
As the eighth-ranked supermarket group in the world, Costco's multi-year revenue exceeded US$220 billion in 2021. In the same year, Wal-Mart's revenue exceeded US$500 billion, and the total amount was less than half of Wal-Mart's. However, the latter's number of stores exceeded 10,000, while the former's number of stores Only 700+.
In terms of turnover of Lundian stores, Costco supermarket is definitely the first in the world, and the core factor that can achieve this is its business model: a warehouse chain supermarket.
In fact, warehouse supermarket chains have already appeared in Europe and the United States as early as the 1950s. However, the initial model was not aimed at everyone, but at specific groups. For example, the most famous Fedco in the United States in the 1950s specialized in providing services to American civil servants. , because the prices are much cheaper than outside supermarkets, many civil servants will buy a large truck of goods, which can be used by their families for several months, even if they drive hundreds of miles.
This business method attracted the attention of Saul Pierce, who was refused entry when he went shopping. After a year of investigation, in 1954, he returned to his hometown of San Diego and opened his own warehouse-style supermarket, Fedmart. , and then the revenue in the first year exceeded 3 million US dollars, far exceeding his estimate of 1 million US dollars.
When things went well, naturally, the second and third stores were opened later, and they were all successful. In 1959, the company went public. At that time, Fedmart had 5 supermarkets, with an annual turnover of US$26 million and a net profit of US$470,000.
However, as its scale grows, the price of similar products at Fedmart is lower than that of other retail channels, which has touched too many people's cakes. Even Pierce has set his sights on gasoline. The gasoline he sells is more expensive than gas. After being refused by the local gasoline company to sell it, he bought gasoline across state lines.
As a result, major brands cut off supply to Fedmart and similar retail stores under the pressure of their own retail channels. As a novice, this business model was under too much pressure and did not have enough economic foundation, which led to the collapse in 1964. In 2008, there was a problem with the company's capital chain. In order to save the company, Pierce accepted the franchise system, laying the foundation for future business failure.
In the 1960s, traditional department stores and supermarkets also experienced rapid development. As a giant retail group in the United States, K-mart happened to open many supermarkets around Fedmart. In addition, the group's internal management was poor, and Pierce was unable to monitor it. Regarding the operation of supermarkets in other cities, by the 1970s, most of the supermarkets owned by FedMart were losing money, and only a few that Pierce was eyeing were still profitable.
Pierce was born in 1916 and was about to be 60 years old. Therefore, he had the idea of selling the company or merging with other supermarkets. However, he found several supermarkets but no one agreed. Later, he had an opportunity and went to Europe to work with European supermarkets. A supermarket owner hit it off and gave up his controlling stake in Fedmart.
However, he was deceived. After the European supermarket acquired Fedmart, he was kicked out of the board of directors. Pierce was unwilling to suffer failure when he was almost 60 years old, so he established Price Club through bank loans and borrowed money two years later. It was the predecessor of Costco, the most famous warehouse chain supermarket giant in later generations.
After Chen Zhiwen time traveled, he spent a lot of time looking for suitable investment targets, that is, he only invested but did not participate in the operation, and occasionally gave guidance on the direction of operation.
Future technology giants do not actually need his guidance, and according to the laws of Western countries, these technology giants cannot participate in operations no matter how many shares are controlled by outsiders.
In other industries, the giants of later generations are basically companies that are a century old, or even have a history of several decades. However, there are very few companies that were established in the 1970s that would give him the opportunity to invest in them. Costco is one of them.
Chen Zhiwen is also very interested in the retail industry. This industry is very influential. The terminal can create a large number of jobs, and the procurement end can control countless suppliers. If there are opportunities in the future, he will definitely invest in the retail industry in Hong Kong and the mainland in the future. But overseas , it is basically impossible for him to succeed in running it.
This is different from technology companies. Western countries generally do not restrict the retail industry. The problem is that in the future, successful local retail giants in Europe, the United States, Japan, South Korea and the Mainland will go to other regions, and it can be said that very few can be said to be successful.
Although the European Carrefour, Auchan and Metro's investments in America and Asia, and Wal-Mart's investments in Europe and Asia, cannot be said to be failures, they can only be said to be average operations. First, local brands in these places already have first-mover advantages and cost advantages. Another problem is the difficulty of localization.
However, there are some that are relatively successful, and Costco is one of them. But its success may also have a lot to do with the fact that there are very few stores and they are easy to manage.
Supermarket giants with complete channels cannot establish retail businesses in other countries. Chen Zhiwen naturally does not have the confidence to imitate the original Costco in the United States and become a retail giant for future generations. Then find the former founder. , investing before he starts his second business is the best way, especially now that he is preparing to sell his own company.
"I want to sell FedMart, but not everyone can buy it." Pierce shook his head and said, "I would rather merge with other supermarkets and use the resources we jointly own to optimize and integrate."
"I understand this, but is it really that easy to integrate resources after a merger?" Chen Zhiwen said: "Unless you can sell Fedmart to giants like Sears or Celtic, otherwise, two supermarkets of similar size cannot be combined. We can’t gain much advantage in procurement, and doesn’t the so-called resource integration require the other party to spend millions of dollars on FedMart?”
"Then Mr. Chen wants to invest in FedMart?" Pierce asked.
"Yes, and no, I want to acquire Fedmart, and I want to invest in you. After the acquisition, Mr. Pierce, you will continue to be the president of the company. There will be no changes in everyone's positions. I will also separately inject capital for operations. At the same time, , and at the same time, I will use part of the shares to reward the entire management, including Mr. Pierce." Chen Zhiwen said his purpose with a smile.
"Acquire all of FedMart?" Pierce was surprised. He didn't expect that the young man in front of him was so ambitious. Although FedMart's stock has not been very good in recent years, and the oil crisis caused the stock market to plummet, no matter what, it is still a company with a turnover of more than 100 million. If you want to delist a US dollar supermarket chain from the stock market, you won't be able to get it without tens of millions of dollars.
