Family Business and Steinberg Case
Steinberg's Success -- Sam Steinberg (1905-1978), was a Canadian of Hungarian descent who transformed the grocery story founded by his mother Ida, into one of the largest chains in the Quebec, Steinberg's Supermarket. One of his key successes was helping to transform food retailing in the post-World War II era into mass merchandising, mechanization, and personnel management that fed into and exploited the bilingual nature of Quebec, and the Ontario. Sam had a unique ability to find optimal locations for his stores by using the old-fashioned technique of driving around the area, watching who drove where, who shopped where, and learning about the areas, then purchasing properties and building on sites he believed would service the public in the most expeditious manner. At the time of his death, Steinberg's was the largest supermarket chain in Quebec. Sam left a legacy of philanthropic ideas and causes, typically focused on the Jewish community. Disagreement among the daughters led to the sale of the family business in 1989, the name disappeared from the stores in 1992, but the family remains one of the wealthiest and most respected in Canada (Ray & Kearney 2002).
Sam's initial success in the business came from shrewd purchasing and the ability to connect with clients. Later, in the mid-30s and beyond, Sam saw that old model of small, limited stores with a counter and customers asking for products was giving way to larger, more spacious locations in which customers would shop with a self-service model. This, of course, meant more employees and more investment, but Sam's view was that the stores became a way of life. In fact, some of Sam's later success was directly attributable to the use of his cash reserves during the war to acquire land at attractive prices, as well as the continued migration into the suburbs -- a move Sam was well ahead of, as well as learning to manufacturing many of its own products like coffee, nuts, tea backs, and baked goods
Part 2 -- What is the Family's role? From the very inception when Sam's mother Ida purchased the small store in 1917, the family was everything to the business. Ida had 6 children and 2 sisters, all of who worked parts of the operation as soon as they were able. According to Sam, it was Ida who instilled the set of values into her children, and the idea that family had to take care of family in the store. As their operation grew and Sam showed talent, Ida would continue to push the role of looking after the family, so much so that Steinberg reports that in order to handle cash in the store, you had to be part of the family (Roberts 1992 p. 3).
Continued expansion was still with the family. Sam formed a company with his mother's borther, Lewis Roth, then continued to open stores putting family in charge, as long as he kept 51% under his control to be careful. Cousins and brothers-in-law, their children, the wives and family of those children, all had a role -- maintenance, fruit buying, grocery buying, construction, accounting, etc.
However, once the business moved from the full service, order, and delivery model to the self-service and expanded warehouse model, Sam realized that he had to hire non-family members, there simply were not enough Steinberg's to adequately expand. Sam looked at the model of the type of person he wanted, and sought out those kinds of people for management, still employing family when possible. What was key is that he and his upper family management never lost sight of the day-to-day operations and treated the stores as a family business; regardless of their location and number; and even the name; even as Groceteria, the idea was the same. High quality product and top notch service for the individual model of store. This was especially true during the war years when many of Sam's competitors would divert scarce products to special customers or sell them privately for black-market prices. Sam never did this, and kept his mark-up the same, often letting clients know when he was able to get rare finds so they could both budget and make the time to get the product. This caused customers to believe that they were also "part of the family" and after the Depression and War were even more loyal to Sam.
Part 3 -- What made the transition from Ida to Sam so successful? The transition from Ida to Sam was almost seamless for a variety of reasons. First, Sam was 12 when his mother opened the first store. Ida...
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