In the pantheon of contemporary American capitalism, there are few living heroes. Now there is one fewer. Sol Price, the legendary retailer, unprecedented philanthropist, counselor to people and presidents alike, died last month at the age of 93. He was a mentor and a friend to many including myself, a modest man whose straightforward approach to his business and the nation’s could be epitomized by the question to which this web site is dedicated: “where’s our money?”
On Friday, more than a thousand friends of Sol Price packed a San Diego ballroom to mark his passing.
One of them was Jim Sinegal, who was just a kid when he met Sol while unloading a bunch of mattresses at FedMart, Sol’s first venture into retailing, back in the nineteen fifties in San Diego. Sinegal was there in 1976, when Sol and his son Robert pioneered the “big box” membership store. Its features are commonplace now, but back then, they were a revolution in retailing: the stores relied on word of mouth rather than paid advertising. Expenses were cut to the bone by building concrete warehouses and locating them where real estate was less costly. Hours were limited. Instead of tens of thousands of stocked items, you’d find only thousands. But they’d be top quality, and, because they were bought in bulk and overhead was so low, much cheaper for the consumer. And for a long time, the stores refused to accept credit cards – because Sol did not like the idea of his customers going into debt.
Sol always considered himself an agent of the consumer. “We tried to look at everything from the standpoint of, Is it really being honest with the customer?” Sol told Fortune Magazine in 2003. “If you recognize you’re really a fiduciary for the customer, you shouldn’t make too much money.”
They called the company the Price Club. I always found it fascinating that he was born with a last name so nearly eponymous with the savings ethic that marked his retail philosophy. Today, after a 1993 merger, the $71 billion company is known as Costco. It has 566 stores, with over 56 million members. Sinegal is its President.
(A note for those who consider invention the province of the young: Sol was 60 years old when he started the Price Club.)
Sam Walton, the founder of WalMart and later Sam’s Club (names he acknowledged cribbing from FedMart and Price Club), said, “I guess I’ve stolen – I actually prefer the word ‘borrowed’ - as many ideas from Sol Price as from anybody else in the business.” But in contrast to the WalMart approach, Price offered employees high wages, employment stability, full health care coverage and invited unions to represent store workers.
Sol’s honesty and integrity were the core of his being, and guided his conduct as a businessman. Sinegal told the story of how Price refused to set up restrooms separated by race in Texas. How he once persuaded a hosiery supplier to cut his wholesale price deeply upon the promise of volume sales, but when the volume failed to materialize, Sol repaid the wholesaler the difference, a gesture unheard of then – or now. Or how he refused to lowball the owners of a bankrupt company forced to sell their assets. “Never kick a man when he is down,” Sol said.
“It is impossible to make him bigger in death than he was in life,” Sinegal said Friday.
Sol became famous around the world for his business acumen, but it was his philanthropy that distinguishes him from so many other ultra-rich. “Sol told me, ‘we make money so we can give it away,’” recalled Sherry Bahrambeygui, a young, super-smart lawyer he recruited to help manage the Price family’s business and charitable endeavors.
Sol lived the quintessentially American rags to riches story, and I saw that background reflected both in his demeanor – he was direct, to the point, and would not tolerate flattery or prevarication – and in his careful, frugal approach to everything he did, from how he lived to his businesses and philanthropy.
The son of a labor organizer, Sol grew up during the Great Depression and decided to study law, graduating from University of Southern California Law School in 1938. During World War II, he practiced law by day, but spent his nights training maintenance workers to service engines at a San Diego airfield. Unlike most businessmen, who often whine about lawsuits and support efforts to roll back consumer protection laws, Sol was a strong supporter of the right to go to court. All of his actions were guided by his strong sense of what was just and fair.
Though his personal wealth was estimated at $500 million, he lived in a modest home, drove himself to work until he no longer could, used pencils rather than pens, and, I’m pretty sure, wore a Timex watch.
Sol instituted his most ambitious philanthropic project close to home. Working with local officials, Sol, his son Robert and a small staff operating out of his office in LaJolla revitalized the dilapidated City Heights section of San Diego. He, his family and their charities donated over $150 million to build schools, housing, a library, recreational facilities, a police station, and provide a host of family services to City Heights residents. No detail was too small to escape his attention; he was known to insist on the particular kind of shrubbery to be included in the landscaping. His work at City Heights confirmed his belief that the most efficient and effective way to provide health care to kids was through the school system – an approach that was briefly contained in the health care legislation now before Congress.
Another project arose from the loss of a grandson to cancer at age fifteen. The Aaron Price Fellows program enrolled promising high school students in a special curriculum that taught about government and civic involvement. One of its graduates, San Diego City Councilman Todd Gloria, joked on Friday that some might say a “ten pound bag of rice” was Sol’s legacy. Not so for the six hundred Price Fellows. “I would not be where I am today were it not for Sol Price,” Gloria said. When asked to identify themselves, dozens of Price Fellows in the audience stood up – a diverse group of young, smart, eager people who will be California’s next generation of leaders.
An unabashed Democrat and liberal, Sol supported many advocacy groups, from Public Citizen and the Urban Institute in Washington, D.C., to the Center for Public Interest Law at the University of San Diego, and the group I founded in 1985, Consumer Watchdog.
Asking Sol for money was nothing like anything I had ever experienced. At our first meeting, in the 1990s, I had barely said hello before he gruffly sent me away, with instructions to come back with an organization budget and a profit and loss statement. I was taken aback. “Non-profits aren’t supposed to make a profit,” I protested. He chuckled that chuckle that I quickly learned preceded a shaking of his head and then a short but tough lecture. “What happens if your expenses are greater than what you bring in?” he asked. “Why should I invest in something that might not be around?” I returned with the data, which we poured over, Sol all the while questioning my assumptions, my strategies, asking me where every penny went, forcing me to consider how we could do our work more effectively (even if it ended up costing more). Once he was satisfied with the plan, Sol became a major supporter.
After electricity deregulation turned into a costly scam in 2000 and Consumer Watchdog took a lead role in trying to protect Californians against a taxpayer bailout of the energy industry, Sol helped us raise money from people he knew all over the state. I recall one day asking for his views on various possible solutions to the crisis. He imparted some wisdom that clearly had served him well. “You don’t always have to have all the answers. Sometimes it’s important just to ask the right questions.”
Sol’s support for well-run non-profit groups was widely recognized. What was less well known is how he took care of the people he came in contact with. Sherry Bahrambeygui described Sol as having an ability to connect with individuals in a deeply personal way. I experienced it as an almost uncanny sixth sense. One day in the fall of 1997 I drove down to his office, intending to discuss a grant for Consumer Watchdog. But when I sat down, he said to me, “what about your own financial situation? What’s your plan for the future?” In truth I had been so absorbed in my work that I’d too often neglected those matters. What made him ask remains a mystery to me. But we then spent many hours together, me and the founder of Costco going through my own finances! I later learned that I was one of many to whom he had offered personal advice and assistance.
For years after that, I would visit him every month, sometimes with my family. The man who was brutally honest and laser-like when scrutinizing a balance sheet or a business proposal was also a witty storyteller who liked to talk politics and history with friends and family over dinner. His insights into human nature were entertaining and often eerily prescient. He knew everyone and enjoyed connecting people. Among those he introduced me to were his close friends Brian and Gerri Monaghan, who became my friends as well. On Friday, they whispered to me with a laugh that if Sol had been in attendance at his memorial he would have left after fifteen minutes – he was never comfortable being the center of public attention, much less adoration.
I saw Sol just a few weeks before he died. His wife Helen had passed the year before, and he seemed, for the first time, weary. He was distant and uncharacteristically quiet. Yet when I wondered aloud why people seemed to grow more conservative as they grow older, a twinkle came back into his eye and he said, “I think it’s because they sense their own mortality and become more fearful.” I saw no fear in his eyes. I will always be grateful that I had one last chance to thank him for all he had done.
There were many poignant moments at last Friday’s tribute – laughs, gasps at previously unheard anecdotes, and the occasional swiping away of tears as people recalled, publicly or privately, their own moments with Sol. But the time I choked up was at the very end, after Robert spoke about his mom and dad’s 78-year marriage, then thanked the crowd and left the podium. There was polite applause, and it seemed that it was time to go. But then something changed; the applause grew louder, and suddenly everyone was standing, and, facing the now-empty stage, clapping their hands together in a sustained thunder for many minutes – a last ovation for Sol.
In an age defined by forgettable billionaires who built little but monuments to their own narcissistic folly, Sol Price left a remarkable and enduring legacy. He changed corporate America’s relationship with consumers and the lives of the many thousands of people who knew him.