Forgotten: Steinberg — Mistakes Were Made

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Steinberg’s was a grocery store founded in 1917 in Montreal, by a Jewish-Hungarian immigrant named Ida Steinberg. The motto for the store was to “give customers a little more than they expect.” Ida’s son Sam rented an adjacent store in 1919, and seven years later, the second independent store opened in Montreal. By 1930, Steinberg was 4 stores strong.

The Steinberg stores were full service grocery stores that offered delivery services. In 1933, Steinberg opened a tenth store that was its first self service one. Self-service grocery stores were a new idea. Given the world was in the middle of the Great Depression, the idea became popular. With self service, the prices were as much as 20% lower. Steinberg opened its first two supermarkets in 1937. The stores were the first in Canada that had separate coolers for meat, dairy products, and produce. At these stores, Steinberg was also a pioneer in using cellophane packaging and providing parking lots for each store. In 1943, Steinberg installed self-service meat counters, where customers could select their own cuts of meat without the help of a butcher.

Steinberg became a public company in 1958. The next year it doubled its number of stores when it gained 38 Grand Union food stores in Ontario.

In 1964, Steinberg tallied record sales and net profits because of the performance of their grocery stores. Steinberg expanded from the selling of food to the actual production of food. The company’s stores now had their own private brands of dairy products, fruits and juices, baked goods, and nonfood items.

The company made a 8 million investment in a new Montreal bakery, better manufacturing facilities and food production operations. The bakery was the largest of its type in Canada, with automated assembly and shipping areas, high-speed bread wrappers, an electric cake line, an automatic pie line, and equipment that produced 2,460 dozen doughnuts an hour.

1n 1967, Steinberg had 171 grocery stores and 15 Miracle Mart department stores. In the same year it gained a 30% interest in Phenix Mills Ltd., one of the largest flour mills in Canada.

At its peak and for several decades, Steinberg’s was the largest supermarket chain in the Quebec province. The stores were known for having the lowest prices in eastern Canada. The company started declining after Sam Steinberg’s death in 1978. Today not a single Steinberg’s exists. What happened?

Reasons for decline: 1. Que Sera Sera Unions

Sam Steinberg didn’t have an anti union attitude towards unions as most business leaders do today. In fact, Steinberg didn’t have any formal plan to deal with unions. Steinberg’s policy was if workers wanted to unionize so be it, if not that was ok too. This laissez-faire attitude hurt the company after Sam’s passing. Steinberg employees quickly unionized after Sam’s passing. The company had to pay higher unionized labor costs compared to its competitors who were unionized or not unionized. These costs were passed on to consumers, raising Steinberg’s prices and thus knocking it from its number one mantle of low price grocery store. The lack of a clear plan of strategy on how to deal with unions ended up hurting the company.

2. Poor succession plan to fill empty throne

After the death of Sam Steinberg, a power struggle developed over control of the company. Sam’s daughter Mitzi, her husband Mel Dobrin, daughter Marilyn Steinberg Cobrin and daughter Evelyn Steinberg, each held equally controlling shares in the company through trusts. The problem was their shares, along with the shares of Sam’s wife Helen, were stipulated to be voted together as one, to keep control of the company in the family. They all couldn’t come to an agreement and years of family infighting ensued as the company was steadily losing its footing as a premier grocery store chain.

Imagine if Cersei, Joffrey, Jaime and Tyrion Lannister were all tasked with running Westeros equally after Tywin’s death, and they couldn’t make a move unless they all came to a consensus of how to act. They all would have ended up killed or killing each other a lot sooner in the Game of Thrones universe. Well, the Steinberg’s were just as dysfunctional business wise, minus the poison, attempted hits and incest of course. The company was steadily eroding from a lack of leadership and infighting.

After years of lackluster leadership, family infighting, power struggles, rising costs and increased competition, Steinberg’s was placed for sale. The company sold for $1.3 billion in 1989. A&P Canada bought most of the Ontario area stores from the new owner and rebranded them under A&P. Loblaws bought the final 10 Ontario stores and rebranded them under its name.

The Quebec area stores were sold to major local competitors Metro Richelieu and Provigo and subsequently rebranded. The last Steinberg’s stores closed on September 5, 1992.

Sam Steinberg’s real estate company, Ivanhoe still exists though it is no longer owned by the family. It was sold as part of the 1989 sale.

Originally published at https://mwmblog.com on October 5, 2020.

recovering Lawyer, History buff who wants to share my knowledge with the world . To teach them lessons from our past. see all of the stories on www.mwmblog.com

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