He Created a $10,000,000 Business in Seven Years

FRANK J. AYEARST February 15 1927

He Created a $10,000,000 Business in Seven Years

FRANK J. AYEARST February 15 1927

He Created a $10,000,000 Business in Seven Years

C. P. Loblaw started as a clerk at three dollars a week—now he deals in millions

FRANK J. AYEARST

FROM the little town of Alliston, Ontario, have sprung three men whose names are writ large in the annals of Canadian achievement. Doctor Banting, the discoverer of insulin, is one; George Morrow, son of a former Alliston hotelkeeper, now, the power behind the great cereal industry of America, and many times a millionaire, is another; and, last, but not least, there is Theodore P. Loblaw, the erstwhile grocery clerk who, starting seven years ago with two stores, now heads a chain of groceterias doing a business in excess of ten millions of dollars annually.

The Canadian company, which bears his name, carries on its books an American enterprise, which is spreading rapidly through American cities adjacent to Ontario. A few weeks ago a store was opened in Rochester and two more in Buffalo, bringing the number of Loblaw stores located in the latter city up to twelve.

Here are a few of the Loblaw sales during an ordinary week: forty tons of butter, almost four car loads; 12,000 pounds of bacon; 15,000 pounds of tea; 5,000 pounds of coffee; and 6,000 pounds of cake which has been baked in Loblaw ovens, by Loblaw bakers.

How has Theodore P. Loblaw accomplished the things which sales of this magnitude indicate?

Eight Miles a Day to School

HIS father died when he was only a few months old; his mother when he was a lad of fifteen. On her death, he went to live on his uncle’s farm, until, as a barefooted farm boy he made up his mind that he would rather work behind a counter than behind the plow.

He managed to attend school for six months each year, even though this meant a walk of eight miles a day to the old ‘Scotch Line’ school, in Essa township, near Alliston. There was little time for homework, there being endless chores that had to be' done before leaving in the morning, and again on his return at night. However, by dint of persistence and grit, he managed to pass his entrance examinations and enter High School, before his uncle began to begrudge him the time taken up with his studies.

Life on the uncle’s farm was clean through and through, but it was extremely narrow and uninspiring. There was little or nothing about it to fire a boy with ambition, but there were in this Loblaw lad some dormant qualities which 'clamored for expression.

His uncle was not in sympathy with his young nephew’s ambitions, and refused to advance him a few dollars to make a start away from the farm. So, with the courage that was to win so many battles for him in later years, he hired himself out to another farmer to pick apples for ten dollars a month.

At the end of two months, out of the twenty dollars he had earned, he had saved—twenty dollars. With this nest-egg in his pocket, he went to Toronto. There his ambition to get started in a business career was realized, when he succeeded in getting behind the counter in the grocery store of W. G. Cork, on King Street.

His salary was three dollars a week, and the cheapest board he could get was three dollars and fifty cents a week. But, so anxious was the boy to learn the grocery business, that he would have worked for nothing so long as his original capital lasted.

Commenting on that first job of his, Mr. Loblaw says: “It is unfortunate that so many of our young men to-day want to pick out a job that will pay them most at the start. That is a short-sighted and mighty dangerous policy.”

Three Dollars a Week for a Start

WHILE he found the work of absorbing interest, the time finally came, of course, when his twenty dollars of capital had gone to bridge the gap between his pay and the demands of his landlady. What happened then, is best told in his own words:

“I went to Mr. Cork on Saturday night and told him just how I was fixed. Mrs. Cork succeeded in persuading a neighbor to board me for three dollars a week, with the understanding that I would sleep with her son. I didn’t object, as I worked, everyday, from seven in the morning till ten or eleven at night, and I was almost asleep before I could get into bed those nights. Mr. Cork increased my pay to three dollars and fifty cents a week, so you see, I was fifty cents ahead of the game every week instead of behind.

“When my pay got up to five dollars a week, I was banking a dollar every week. The only money I needed, was for the collection plate on Sundays. I had no time or money for luxuries, entertainments, shows or vacations. I didn’t even board a street car during the first two years I was in Toronto. I will never forget my first ride; it was the greatest trip I have ever taken. I had a night off, and the Corks suggested we take a ride on the electric cars, which ran out King as far as Dufferin Street. I got a bigger kick out of that trip, than I would, now, in taking a tour around the world.

“At the end of seven years, I was earning eleven dollars a week, and in that time had managed to save $800. Had I not saved that money I probably would be working for some one else to-day. It was that hard earned capital which gave me the opportunity to launch out for myself.

“There is another point that I must mention, as it has had a great deal of influence in shaping my policy of merchandising groceries. You remember, how in the old days, most of the groceries were exposed to the elements and to the visitations of all and sundry insects. Oatmeal, for example, was scooped out of a bin, that was generally left open and became a feeding ground for mice. A box of dates was placed in the window, the sides knocked off, and the flies were allowed to play o/er the fruit to their hearts’ content. It was Mrs. Cork who taught me the value of the maximum cleanliness in the handling of all foodstuffs. I believe that cleanliness in the handling of food contributes in no small way to the health of a community.”

From Clerking to Bookkeeping

IN THE Cork store, the system of keeping account of a customer’s purchases was rather complicated, and young Loblaw found it caused him considerable worry. He made up his mind to go to night school and learn bookkeeping, but this would have required three nights a week. He had to work four, but he was prepared to spend the other two at school to prepare himself for bigger things ahead. So, he went to business college, and said to the principal: “I want to take up bookkeeping, but I can only get two nights off, I hope you will see your way clear to let me take the work in the shorter time.”

The principal readily consented and it was not long before Loblaw was able to work out a much simpler method of keeping the store records.

With the $800 he had saved, he bought an interest in a small grocery store on College Street, belonging to J. M. Cork. Here he was able to make a thorough study of merchandising methods, and costs, and, with characteristic foresight, he began to plan his future business along lines leading far beyond a corner grocery.

He realized that, with a greater volume, he could buy

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more cheaply and give better value to his customers. The chain store idea, he felt, was sound, and was bound to come. Instead of sitting still and bemoaning the day when some chain organization would come along and buy him out, he said to himself: “The individual grocer is not facing ruin, but he is facing changing conditions, and I am going to keep abreast of the times.”

One night after the store had closed he was sitting on the counter talking to Mr. Cork.

“Milton,” he said, “I think it would be a good idea to open up a number of small stores. A girl could run one if she had a boy to assist her in the store and make deliveries after school.”

Mr. Cork sympathized with the idea, and entered into a partnership with the young enthusiast. By 1910, the partners were operating nineteen of these small stores, which they eventually sold, these becoming the nucleus of the present Dominion Stores’ organization.

TN THE spring of 1919, Mr. Loblaw

conceived the idea of a cash and carry groceteria system. This method of operation, he thought would be particularly adapted to the needs of centres of dense population, as it would mean immediate service, reduced overhead, and the maximum of value to every customer. So he began to try out his idea, opening two stores in Toronto, as a start.

The ideal store to-day has been called a well-managed restaurant, because, like the latter, it would have no dead stock— everything bought in the morning being eaten up by night.

The Loblaw groceterias average a turnover of their entire inventory every twenty days. Of course, some of these stores turn their, entire stocks over in a much shorter period, and in certain lines they equal the accomplishment of the restaurant.

Obviously, this means a reduction in the overhead through the keeping of each store’s investment in merchandise at a minimum.

Where the storekeeper used to order weeks ahead and have much of his capital tied up in staple merchandise, the manager of one of these groceterias can replenish his stock within a few hours. He merely telephones to the warehouse the company maintains in Toronto, and the goods are rushed to him by motor truck or express.

There is a further reduction of overhead through an immense saving in the matter of delivery—the customer helps him or herself, pays the cashier on the way out, and walks home with the purchases.

That the saving through volume, through the reduction of capital invested in stock, and through the saving of delivery and serving charges, amounts to a great deal, is borne out by the record of the Loblaw company’s success and the phenomenal growth of the past few years.

Starting seven years ago with two groceterias, the company now has a chain of some fifty, operating throughout Ontario and as far west as Edmonton. In the States, it is difficult to keep track of the rapidly expanding chain, every week finds one or more new localities invaded.

In order to determine just which towns are growing, which ones are standing still, and which are dwindling, the company maintains its own census over certain parts of Canada and the United States. Every important movement of people is reported to the head office in Toronto, and the executive make a careful analysis in order to diagnose coming developments. In other words, a sort of day-to-day history is kept of the territory under investigation.

THE Loblaw enterprise has always been conducted on the principle, too often overlooked by many business men, that you can go further, if you take others with you. When I raised this particular point, Mr. Loblaw expressed himself in no uncertain manner. He said: “You know, the late Mr. Woolworth of the great organization which bears his name, has expressed it pretty aptly in these few words. ‘A business is like a snowball: one man can easily push it along for a while, but the snowball becomes large if pushed ahead, in fact, so large that help must be obtained to roll it—and if you don’t keep it rolling, it will soon melt. No business can stand stationary for any considerable period; it either rises or falls. And, if left to itself, the tendency is for it to fall.’ ” What manner of man is this Theodore P. Loblaw?

The first impression one gets, is that here is a veritable human dynamo. Of medium height and strongly built, he radiates a ceaseless energy, which, in a less vigorous person might be taken for an indication of nerves. But, when you have talked to him for a while you realize it is genuine force, the product of a life that has been simple, sane and temperate in everything but work.

Mr. Loblaw claims that work, if one’s heart is in it, keeps one physically fit.

“I brought a good healthy constitution with me when I left the farm, and during the period of my life that I worked the hardest I felt the best. When I first became financially interested in a grocery store, I was up every morning at four o’clock and used to ride out to the nearest railroad junction on my bicycle before breakfast. I would be back to the store shortly after five with the day’s supply of farm produce. I was never finished until after eleven at night. Those were mighty strenuous days, but I enjoyed them.” That still he considers long hours of work and short hours of sleep a desirable programme for a business man, is attested by a description of one of his habits of work which was given me by a friend of his. It appears that Mr. Loblaw spends every Saturday evening in his Buffalo stores, not leaving the city until the last of the stores is closed for the week. This means that, if he wishes to spend Sunday at home, and he does usually wish to do so, he must spend most of the early hours of Sunday morning in his automobile and arrive at his house almost asleep on his feet. A few hours later he is in his'pew at church.

“ \ Ä7 HAT are some of the qualities that * » go to make a man really successful?” I asked.

“He must earn a reputation for unimpeachable integrity, he must tell the absolute truth, he must cultivate goodfellowship—other men like to do business with the men they like and can trust. Then he must be a worker; I know of nothing that will take the place of hard work. Where one man fails through lack of ability, there are a hundred who fail through lack of effort. But, I cannot emphasize too strongly the value of saving part of one’s income regularly. How is a young man going to prepare for the opportunities ahead, the ones that are bound to come, if he has not set aside some capital? Q. know it was the money I saved through self-denial, that made it possible for me to become independent of a pay-cheque. The longer I live, the more I am convinced that the difference between the clerk who saves part of his salary, and the one that spends all of his, is the difference, in a few years, between the owner of a business and the man out of a job. That may sound like a pretty strong statement, but, I don’t think it is a bit too strong.”