The Skaggs Family, starting from a small frontier town in southern Idaho, came to have an important impact on merchandising across much of the United States. During most of the 20th century, the Skaggs name was prominent on hundreds of stores throughout the West and Midwest.
The origins of a wide range of these grocery and drug store enterprises can be traced to this one Skaggs family. The father in the family was a Baptist minister and had moved west for a better climate. He had a large family; to supplement his income he opened a grocery store. He and six of his sons, with varying degrees of collaboration, introduced in the early 20th century two important changes in merchandising: the low-margin, cash-and-carry approach to business, and rapidly growing a multitude of common outlets, now called chain stores. Their entrepreneurial interests became a major retailing force resulting in large, retail chains that carried not only the Skaggs name itself, but names like Safeway, Osco, PayLess, Albertsons, Longs Drug Stores, Katz and others.
Biography Circa 1887 Samuel M. Skaggs, with his wife Nancy (E. Long) and two of his brothers and their families, moved from Tennessee to Missouri.[2,8] There Sam tried farming and managed a store and post office in Cato, Missouri. Between 1888 and 1900 he entered the Baptist Ministry and by 1900 settled in Newton County, Missouri. At the time of their move from Tennessee, Sam and Nancy had five children; in Missouri they had 10 more. Of the first 11 children, 9 were alive in 1900. Of these there were six sons who came to be known by their initials:
Pepper Oscar Skaggs, born January 7, 1881, became O.P. Aron Sylvester Skaggs, born January 14, 1886, became S.A. Marion Barton Skaggs, born April 5, 1888, became M.B. Loronzo L. Skaggs, born May 5, 1891, became L.L. Samuel Olnie Skaggs, born November 14, 1895, became L.S. Levi Justin Skaggs, born May 4, 1899, became L.J.
Between 1908 and 1910, Samuel Skaggs brought his family from Missouri to Idaho. As a minister of a small group in a small frontier town, American Falls, Idaho, he needed additional support for his large family. He opened a small grocery store, but to compete with the few that were already operating, he changed its business model from one of credit accounts, which were tailored to the sporadic and seasonal income of farmers, to a cash-only basis. Attracting customers to this simpler arrangement would make sense if he could sell for much less than his competitors. While the margin would be lower, he avoided the risk of non-payment of accounts. To drive down the wholesale price of the groceries he sold, he bought them in larger lots than competitors. In those days large lots were defined by some fraction of a railroad carload, and because American Falls was a stop on the Union Pacific Railroad, this afforded Sam Skaggs an opportunity to buy and sell for less. Perhaps more important to his expansion-oriented sons than to Sam, the savings of large-lot buying increased as more stores came on line.
To portray the evolution and impact of the merchandising practiced by Skaggs and to track the creation of stores and their ownership transfers, a nearly 100-year chronology is used. In it lies the genesis of much of the modern merchandising. The Skaggs family anticipated what customers wanted, so the Skaggs brothers and their merchandising model comprise a thread in the fabric of the present commercial world. This chronology begins with Sam Skaggs moving his growing family west:
Timeline of events in the history of the Skaggs family 1907 S.M. Skaggs leaves Missouri and moves west with his family in search of a better climate. They settle in American Falls, Idaho before 1910 where he is located in that year's census. 1914 In a separate commercial effort Sam Seelig founds a chain of four stores in California called Sam Seelig Grocers. According to the Safeway web site, this chain grew to over 322 stores by 1926. In 1925 he renamed them Safeway. 1915 In April, S. M. opens the Skaggs Cash Store "with his own hands, on rented property, on borrowed money." The store was about 18x32 feet. It was located in the original town of American Falls, adjacent to the Union Pacific railroad tracks, and he apparently bought large lots from the rail cars and sold them to the public. That store became Skaggs Store No. 1 and is now beneath the American Falls Reservoir. When the town was relocated between 1923 and 1925, that store was situated at the corner of Ft. Hall and Idaho Street, now housing the Senior Center. Unusual for the time, the Rev. Skaggs had a cash only, no credit policy, which all his sons later adopted. (See adjacent newspaper ads.) 1916 S.M. sells this store to his third son, M.B. (then 29 and a well driller), for $1,088, and moves to eastern Oregon. Though M.B. didn't at first contemplate having multiple stores, he saw his principle of economical buying and quantity distribution going only so far with a single store. The following year M.B., with the help of some of his brothers, starts expanding; opening stores in Blackfoot, Rupert and Burley, Idaho. This process continues elsewhere to form a grocery store chain that reached 428 stores by 1926. In the meantime O.P. also starts Skaggs Cash Stores in Idaho Falls, Elko NV, and elsewhere, including California. He numbers his stores with even numbers and they have orange fronts while M.B. uses odd numbers and uses blue fronts. L.J. goes to work for O.P. in Ogden.
1917 Five small grocery chains in the Philadelphia area combine to form American Stores Company. This group would be acquired by a Skaggs enterprise in 1978. 1918 L.S. returns from military duty and reenters the grocery business with his brothers.
1919 The brothers form a partnership called Skaggs United Stores. In Ogden, Utah L.J. meets and marries Mary Dee, daughter of a Mormon convert from the Netherlands. They work together to open a chain of Pay’n Takit Stores. These would eventually (1928) become part of Safeway. 1926 About this time O.P. sells some of his grocery chain to his brothers bringing the total Skaggs United Stores to 428 stores in ten states. This included some of O.P.’s Skaggs Cash Stores in California. (Probably does not include O.P.’s drug stores or all of his California food stores. See below.) This year Charles Merrill, a co-founder of the Merrill Lynch investment firm in 1914, engineered the merger of Skaggs United Stores and Safeway. M.B. became President of the new company and the stores were initially called Skaggs Safeway. They reverted to just Safeway after about 18 months. Merrill temporarily withdrew from the financial industry in 1930 to help oversee the expansion of the Safeway enterprise. M.B. remained the head until 1934. Also, by this time, one C.J. Call purchased a chain of California food stores from O.P. 1928 Mainly through acquiring grocery chains in California, Washington, DC, and Kansas City, Safeway expands to 2020 stores, 855 of which are combination stores with meat markets. Sales in 1929 were $203 million. Part of the expansion involved Safeway acquiring the Pay’n Takit stores of L.J. that ranged from the mountain states into California, Arizona, and Texas. For many years they were called Safeway Pay’n Takit. 1930 L.S. is intermountain director for Safeway, residing in Salt Lake City. 1931 Safeway stores in the U.S. and Canada now number 3527. This would be the largest number of Safeway stores. 1932 L.J. Skaggs opens his first self-service drug store, PayLess Drug, in Tacoma, Washington. The PayLess chain grew throughout the West, but L.J. would sell most of his interests to his brothers and associates. By 1965 three companies would result: one in Washington and Oregon, a 4-store chain in Tacoma, Washington, and one company he would retain in California. L.J.’s California stores, headquartered in Oakland, California, would be sold to the Washington-Oregon chain in 1980 and then to Rite Aid sometime around 2000. 1933 The Skaggs brothers' cashonly policy helps them weather the depression. 1934 M.B. retires as head of Safeway. Allen Rosenberg opens Arizona’s first self-service drug store called Thrifty Payless Drugs selling it eight years later (1942) to the L.L. Skaggs chain. 1936 Death of Samuel M. Skaggs 30 October. 1937 L.L. Skaggs and Harold Finch found Pay-Less Drug in Rochester, Minnesota. It was the Midwest's first self-service drug store. With the opening of a second store in Mason City, Iowa the following year, the name was changed to Self-Service Drug, Inc. It would later (1942) become Osco Drug, which would grow to approximately 600 stores in 19 states by 2003. 1938 Joe Albertson, a district manager for Safeway, enters into partnership with L.S. Skaggs and the latter's accountant, Tom Cuthbert, and opens first store in Boise, Idaho. M.B.’s son-in-law, with his brother, form Longs Drugs that today has 450 stores in six western states. Coincidentally, the brothers, Joe and Tom, had the same last name as that of M.B.’s mother, Nancy E. Long. 1939 L.S. resigns from Safeway to enter the drugstore business. Two associates from Safeway join him and they buy four Pay Less stores from his brother L.J. They were located in Salt Lake, Ogden, Boise, and Great Falls. O.P. sells some stores in Nebraska to George W. Martin, whose family operated them until selling them in 1964. In 1959 Martin started a new set of stores in Nebraska called Skagway and several are operating today in Omaha and Grand Island. 1942 L.L. Skaggs forms a partnership with H.B. Finch, Paul Stratton and George Hilden and call it the Owners Service Company, hence Osco. The headquarters was then moved from Waterloo, Iowa to the Merchandise Mart in Chicago, Illinois. By 1961 they had 31 stores in six states. 1945 C.J. Call (see 1926), with Ira Brown, open the first Sav-on Drug Store in San Bernardino, California. Sav-on Drugs would be acquired by Jewel Companies. who would, in turn be bought by American Stores, headed by L.S.’s son. 1948 Some PayLess Drug Stores change their name to Skaggs Drug Stores. 1949 Death of L.S. at age 54. His son, L.S. Skaggs Jr. (“Sam”), takes over his father's role at age 26. At that point there were 11 drug stores with $9.5M sales. L.S. Jr.’s expansion drive was remarkable for by 1978 he had grown that number to 202 stores and 39 super-centers in 21 states with over $1B sales. 1950 The M.B. and Estella Skaggs Foundation builds a community hospital just north of Branson, Missouri.
1951 Albertson’s opens first combination food and drug store, a superstore. 1955 Safeway control passes to Robert Magowan, Charles Merrill’s son-in-law, who continued Safeway expansion to become the second largest grocery chain in the U.S. But by the 1970s it was in financial difficulty and losing market share. 1956 General Electric sues a group of Western retailers for selling its products at below recommended price. Skaggs Companies counter-sues and wins, overturning so-called “fair trade” laws in Utah and other states that prohibited discounting. 1961 Jewel Companies acquires the L.L. Skaggs-founded Osco Drug chain. 1962 Using the name of the island on which it had been located early in World War II, a Navy radio receiving station in north San Francisco Bay officially adds Skaggs Island to its name. The island had been named for M.B. when he financially helped the struggling Sonoma Land Co. during the depression of the 1930s. The Navy station was decommissioned in 1993. 1965 Skaggs Drug Stores incorporates as Skaggs Drug Centers and over the next few years acquires drug chains called Josco, Harts, Cook's in the South and West, and Katz, which had stores in the Midwest and also owned the non-California operations of L.J. Skaggs's old PayLess chain. 1969 Albertson's and Skaggs partner to create Skaggs-Albertsons combination stores and over the next few years opened 58 such stores in Oklahoma and the Southeast.