Thrifty PayLess

Thrifty PayLess Holdings, Inc.

Former type	Retail/Pharmacy
Industry	Retail
Fate	Acquired by Rite Aid
Founded	1919
Defunct	1998
Headquarters	Los Angeles, California
Products	Pharmacy, Liquor, Cosmetics, Health and Beauty Aids, General Merchandise, Snacks, 1 Hour Photo
Website	None

Thrifty PayLess Holdings, Inc. was a pharmacy holding company that owned the Thrifty Drugs and PayLess Drug Stores chains in the western United States.

The combined company was formed in April 1994 when Los Angeles-based TCH Corporation, the parent company of Thrifty Corporation and Thrifty Drug Stores, Inc., acquired the Kmart subsidiary PayLess Northwest, Inc.^[1]

At the time of the merger, TCH Corporation was renamed Thrifty PayLess Holdings, Inc. and Thrifty operated 495 stores, PayLess operated 543 stores.

In 1996, Rite Aid acquired 1,000 West Coast stores from Thrifty PayLess Holdings, creating a chain with over 3,500 drug stores.

History of PayLess

In 1932 L.J. Skaggs opened Payless Drug Stores in Tacoma, Washington, which soon expanded across the western United States. Some stores were sold to his brother Samuel "L.S." Olnie Skaggs (then an executive at Safeway) along with some colleagues. L.J. Skaggs retained California Pay Less Stores, which eventually became part of Thrifty PayLess. The remaining Pay-Less stores were renamed Skaggs Drug Stores in 1948, Skaggs Drug Centers in 1965.

Peyton Hawes and William Armitage acquired a controlling interest in five drug stores in three communities in Oregon and Washington, which were named PayLess, and grew their chain through both acquisition and internal expansion. By 1984 PayLess Drug Stores was the largest independently owned and operated drug store chain in the United States. It became a wholly owned unit of Kmart in 1985, as part of the Kmart expansion program created by CEO Joseph Antonini. In 1986, there were 225 PayLess stores. By 1990 PayLess operated in nine western states. Today, a new Payless Drugs, (using a similar logo to the prior PayLess), operates as a long-term healthcare pharmacy but does not operate retail stores.

Acquisitions

• 1973 - Acquired Seattle based House of Values and Portland owned Gov-Mart Bazaar to form PayLess House of Values.
• 1976 - PayLess bought 22 Value Giant stores, the majority of which were located in Northern California.
• 1980 - PayLess acquired PayLess Drug Stores of Oakland, California, founded by Levi Justin Skaggs.
• 1987 - PayLess purchased 25 Osco Drug stores in California, Idaho, Oregon, and Washington.
• 1990 - Acquired Pay Less of Tacoma, Washington.

History of Thrifty

In 1919, brothers Harry and Robert Borun, with brother-in-law Norman Levin founded Borun Brothers a Los Angeles, California drug wholesaler. In 1929, they opened their own retail outlets under the name Thrifty Cut Rate in Los Angeles, California.

After opening 5 additional stores,^[2] Thrifty opened their seventh store in the mid-Wilshire district on Wilshire and Western, the first store outside of downtown, in 1931.^[3] This was quickly followed by several new stores within a few miles of downtown.

By 1942, Thrifty Drug Stores had 58 stores.

The 100th store was opened in Studio City in 1950.^[4] At the time of this store opening, Thrifty had stores as far north as Santa Rosa and far south as San Diego.

The first store outside of California was open in Las Vegas in 1952.^[5]

Thrifty expanded into the Pacific Northwest by opening a store in Eugene, Oregon in 1959.^[6][7]

Store grand opening events were always a large spectacle with politicians, and movie and television celebrities involved in the ceremonies. Actor Errol Flynn participated in the 1941 opening of the South Pasadena store.^[8]

A neon Thrifty drug store sign is visible in the background of a scene from the 1954 Judy Garland version of A Star Is Born.

During the 1950s, a Thrifty commercial jingle was heard on numerous radio stations in Southern California:

"Save a nickel, save a dime.
Save at Thrifty every time.
Save a dollar and much more,
at your Thrifty Drug Store!"

Thrifty was large enough to have their own brand of products.

Until the early 1980s, every Thrifty store featured a tube tester, usually located near the cosmetics display case. A wide variety of tube-type and hybrid tube/transistor consumer electronics were still in use, and the local Thrifty store was a convenient place to test TV and radio tubes and purchase replacements. Thrifty also published a brochure which showed various malfunctioning TV presentations and suggested which section's tube or tubes might be the problem. The brochure also provided numbered stickers to aid consumers in making sure that the good tubes went back into the same sockets in their equipment.

In 1972, Thrifty acquired Big 5 Sporting Goods ^[9]

Thrifty's parent, Thrift Drug Stores Co. Inc. became Thrifty Corp. in 1977 to better reflect the fact that the parent company had recently expanded into many non-pharmacy businesses through the purchase of such companies as Big 5 Sporting Goods and The Akron Stores.^[10]

Thrifty Corp. itself was acquired by Pacific Lighting, the parent of Southern California Gas, in 1986.^[11][12]

In 1988, Thrifty acquired Pay 'n Save and Bi-Mart.^[13]

In Washington State, Thrifty went by the name of Giant T since the Thrifty name was in use by another chain of drug stores. The name was later changed to Thrifty in 1984. Later, all Thrifty stores in Washington state were renamed to Pay 'n Save after the acquisition in 1988.^[14]

Thrifty withdrew from Arizona in 1992 by closing all of their stores in that state.^[15]

Thrifty Ice Cream

The Thrifty name and logo live on as Thrifty Ice Cream, still sold in West Coast Rite Aid locations and various ice cream shops in northern Mexico and the southwestern United States.^[16][17][18] It was available in half-gallon cartons, changed in about 2009 to 1.75 quarts, and from small Thrifty Ice Cream bars, located within Rite Aid stores themselves, as a single, double or triple dip cones, notable for their iconic cylindrical scoop shape. The Thrifty brand of ice cream was retained because it had won several important awards in its history.^[19] Thrifty Ice Cream is manufactured at the Thrifty creamery in El Monte, California.^[20]

Like most drug stores during the early part of the twentieth century that had an in store grill and soda fountain, Thrifty at first purchased ice cream obtained from local suppliers. However, since Thrifty was constantly opening new stores and expanding rapidly throughout Los Angeles, finding a steady supply of high quality ice cream at a low price became more difficult. To meet the demands created by these new stores, the Boruns decided to make their own ice cream by purchasing an existing ice cream factory located in Hollywood from the Borden Ice Cream Co. in 1940 for $250,000.^[21][22]

Eventually, the Hollywood plant was replaced in 1976 by a larger custom designed ice cream production facility in El Monte that was to supply the then existing 450 stores plus outside purveyors. The new plant was initially capable of producing 16 million gallons of ice cream annually.^[23][22][20]

Thrifty ice cream has consistently received gold medals each year since it was first entered in competition at the Los Angeles County Fair in 1954 and the California State Fair in 1948.^{[22][24][25][26][27][28]} In 1988, Thrifty ice cream received a total of 24 gold medals at the L.A. County Fair, more than any other competitor.

As a means to persuade customers, along with their entire families, to return to their stores on a regular basis, Thrifty (and later Rite Aid) had always kept their ice cream prices extremely low without sacrificing quality. This unique marketing strategy was not followed by any of their competitors. A single scoop could have been purchased with just a nickel as late as the early 1970s.^[29] By 1991, the price increased to $0.35^[30] and to $1.79 by 2013.^[31]

Notes

References

• Pay Less to jump $1 billion sales hurdle in 1984 Discount Store News, July 23, 1984
• Pay Less changes mix, closes Wonder World units - Annual Industry Report, part 2 Discount Store News, July 18, 1988
• Completion of new children's hospital delayed The Business Journal of Phoenix - May 11, 2001 by Angela Gonzales
• Thrifty PayLess. Drug Store News, April 28, 1997

External links

• Payless Drugs homepage
• History of Thrifty PayLess (prior to acquisition by Rite Aid)
• Thrifty Ice Cream Mexico