Among the giants who founded chain drug retailing in America, Sam Skaggs was unique — which is saying something, considering the range of vision and talent contained in the group of entrepreneurs who built America’s chain drug store business.

Sam Skaggs, American Stores, chain drug store business, chain drug retailing, mass retailing, supermarket, drug store, Skaggs Drug Centers, drug store retailer, Albertsons, David Pinto

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Inside This Issue - News

Skaggs, retail pioneer, dies at 89

April 8th, 2013
by David Pinto

SALT LAKE CITY – Among the giants who founded chain drug retailing in America, Sam Skaggs was unique — which is saying something, considering the range of vision and talent contained in the group of entrepreneurs who built America’s chain drug store business.

Skaggs, who died last month at age 89 after battling a range of physical infirmities for many years, conceived, introduced and developed more successful retail concepts than any single retailing executive in the annals of mass retailing in America.

He was the first retail drug executive to see the possibilities in combining a supermarket and drug store under one roof with a common bank of checkstands. He was one of the first retailers to open super drug stores, units of 20,000 to 30,000 square feet that offered customers a range of products and categories extending far beyond the traditional drug store mix of its day. He was among the first to appreciate the advantages of locating his drug stores in the suburbs at a time when most drug stores still clung to cityscapes. He envisioned the growth of shopping centers, the blurring of retail lines, the decline of downtown and the corresponding emergence of surrounding areas.

Perhaps most dramatically, starting with 11 drug stores in the Intermountain states left to him when his father passed away in the mid-1950s, Skaggs built, through a shrewd combination of organic growth and strategic acquisitions, the largest retail grocery and drug store business in America.

He accomplished all this by anticipating the needs and wants of the U.S. consumer, often before that consumer was conscious of those emerging needs and wants.

Sam Skaggs was not an easy man to describe, understand or relate to. Painfully shy, he did not always relate well to his subordinates or to the wider world in which he operated. Indeed, he asked only one thing of those who worked for him: to faithfully carry out his instructions — unless they had some seriously valid reason for not doing so. He was once asked to describe the contribution to his success made by his wife, Aline. “She was wonderful,” responded Skaggs. “She raised our children — and stayed out of my way.”
He was half joking — but he was half serious.

Skaggs built his business mostly in the 1950s, 60s, 70s and 80s, when travel in the Intermountain West was difficult and distances were neither easily calculated nor easily bridged. The young entrepreneur would often leave home on a Monday morning and not return for two weeks. During those extended periods he would visit stores, study the competition, determine the best locations for the stores he planned to build and evaluate the opportunities to buy out competitors. So it was Skaggs Drug Centers became Skaggs Cos., while growing from 11 drug stores to become the dominant drug store retailer in the Intermountain area.

During this period Skaggs reached an agreement with the Albertsons supermarket chain — primarily through his mutually respectful relationship with Joe Albertson, Albertsons’ founder — to open food/drug combination stores in the Southwest and Southeast. The first combo opened in 1969. When the partnership was dissolved by mutual agreement eight years later — the principals were concerned that the combination-store business was coming to overshadow each partner’s primary business — the companies split the package, each retaining 29 combination stores. From there, Skaggs went on to build America’s most dominant mass retailing ­business.

By the time Skaggs retired, American Stores, the name the company acquired along with its 1979 acquisition of the Philadelphia-based grocery retailer, had become America’s dominant food and drug store retailer.

Much has been made of the fact that Skaggs was descended from America’s dominant mass retailing family. His father was one of six brothers who, among them, conceived, built, bankrolled or participated in the growth of virtually every dominant mass retailer in the America west of the Mississippi River in the first half of the 20th century. But in the end, it was this self-effacing grandson of the Baptist minister who brought his family to American Falls, Idaho, during World War I, to open a small cash-and-carry grocery store and teach his six sons the retail business, who outdid them all.

Skaggs’ intelligence, drive, determination to succeed, retailing background and insight would not be denied. He consistently accomplished deeds that were seemingly beyond him, effectively competing with larger, better-funded retail organizations, acquiring companies or company units that were interested only in acquiring his company, developing retail concepts that consistently put him ahead of the competition.

Now, at 89, he has passed away. Before his death he had turned his attention to helping those less fortunate than himself, giving time and money to causes he deemed worthy. Retailing has largely forgotten him. But students of retailing will never forget who he was, what he accomplished and the many ways he succeeded, often against impossible odds, in competition with the most capable mass retailing executives and companies in 20th century America.