Now In: USA Today
Some Stores branch out by staying put
One-store giants thrive
By Constance Mitchell
WALL, SD – If you’ve ever traveled the sparsely populated prairie between the Badlands and the Black Hills, you may remember the signs: “Who has the gall to bypass Wall?” or “You’ll get walleyed at Wall Drug.”
The legendary signs lead to Wall Drug Store, a mammoth general store that is as extraordinary as its advertisements proclaim.
Located here in a town with 800 residents in a state that even residents describe as “miles and miles of miles and miles,” Wall Drug draws about 20,000 customers a day in the summer. It boasts of being the largest and only store of its kind.
In an era when other retailers are cluttering the nation with replicas of themselves, a handful of USA enterprises-including a grocery in Norwalk, Conn., a shoe store in Sharon, Pa., and Wall Drug -- are growing in place. For them, success comes with vast floor space, shelves stocked with mountains of exotic merchandise and intense marketing.
Wall Drug has nearly 50,000 square feet of selling space. You can buy $400 alligator cowboy boots, models of Mount Rushmore, bottles of horse liniment and in the dining room you’ll find buffalo burgers.
At its founding in 1909, Wall Drug was just a small-town pharmacy. When Ted Hustead bought it in 1931, the store had sales of $300 a month.
Then the store added a Western-style clothing shop in 1954 and erected billboards along nearby highways. Business increased 30%
In 1956 came another addition -- a self-service café. Again business increased. Soon the pattern was set: As new wings and more merchandise were added, money rolled in.
By 1983, Wall Drug had a restaurant with four dining rooms, an apothecary, an art gallery, a theater, a jewelry shop, a souvenir stand, two bookstores, a shoe store (6,000 pairs of cowboy boots and Indian-made moccasins) and an outfitting shop offering backpacking equipment and saddles.
The store now is three-quarters of a block long and this year will have sales of about $5.5 million.
Success, said Bill Hustead, who runs the store with his semi-retired father, has not come at the expense of enjoyment of a family enterprise.
“We wanted a business that the family could appreciate,” he said.
Because of advertising, some of it word-of-mouth, customers often have traveled long distances – and they expect “more than just a drugstore.”
Advertising has been the key to Wall Drug’s success. Each year, the store spends $300,000 on billboards that appear not only in the USA, but in subway stations in London and on road signs in Paris and Rome.
In Amsterdam, the Netherlands, a sign proclaims that it is only “5,397 miles to Wall Drug, Wall, S.D., USA.” There were 127 Wall Drug signs in South Vietnam during the Vietnam War. Soon there will be Wall Drug billboards along the Kenyan railroad from Nairobi to Mabasa, Zaire.
“Once you’ve been tantalized by those signs, you can’t pass it up,” said James Taylor, a South Dakota University business school professor. The more it advertises, he says, “the bigger it gets, the more people it attracts and the more money it makes.”
Then why not open more stores? “I’m not thinking about new operations,” said Bill Hustead.
“I’m trying to figure out ways to keep what we have. Once you branch out, you lose your uniqueness. Our main drive has been to make Wall Drug a tourist center. We want people to see the Badlands of South Dakota and to stop at our store.”
Taylor, who uses Wall Drug as a case study to teach students the value of advertising and promotion, said “If the store were in a different location, it might not fly with the success it has had.”
Another sprawling enterprise, Stew Leonard’s of Norwalk, Conn., rarely advertises. But the store sells more than $2,500 worth of groceries per square foot of selling space – more than $80 million each year.
Stew Leonard Jr., executive vice president and son of the founder, said that rather than risk its hard-earned fortune by opening more locations, the company’s phillosphy now is to “Put all your eggs in one basket, then watch the basket.”
Leonard combines this formula with an attempt to wow his customers by offering a selection of more than 700 products in a store nearly as large as a football field.
Reyers Shoe Store in Sharon, Pa., spends about $130,000 a year on television, radio and newspapers ads in three surrounding states. But Reyers’ success is due mainly to its vast inventory.
“We carry everything. If a guy comes in and needs a size 14A, we’ll have it in stock. Our idea is that everybody can be sold,” said Reyers manager Vincent Cardamone.
Reyers is 15 miles from the steel city of Youngstown, Ohio, in an area of high unemployment. Yet it has grown to be the largest independent shoe retailer in the USA.
“We are able to stay big by staying in one place,” said Cardamone. If we branched out, “We would not be able to offer the large variety that we now do. Now, we offer every type of shoe that people need. We want to wait on the lady who only has $35 and the one who is used to shopping at Saks Fifth Avenue.”
Reyers lures thousands of customers a day by stocking 125,00 to 130,000 pairs of shoes that come in sizes and styles that range from the mundane to the elaborate.
In the spring, the store will carry 200 different styles of women’s white shoes in sizes from 3 to 13 and in 11 widths from AAAAA to EEE.
The selection, requiring a 92 person sales force, generates tremendous volume. Last year the store sold more than $8 million worth of shoes. Its hottest salesman, Larry Joltin, sold $430,000 worth – averaging a pair every 20 minutes.
The high price of construction also keeps these oversized merchants from expanding.
“We’d give it great thought before we’d consider opening a new store,” said Cardamone.
“The costs to open another store this size would be astronomical. Our president has often said we’d do better to put the money in a CD.”