Globe Discount City

Globe Discount City

One of three Globe Discount City logos
Industry	Retail
Founded	1960
Defunct	December 31, 1999
Fate	Bankruptcy
Headquarters	Chicago, Illinois, U.S.
Products	Clothing, footwear, bedding, furniture, jewelry, beauty products, electronics, housewares, groceries, auto service, pets
Parent	Walgreens (owned from 1962 and discontinued in 1978)

Globe Discount City and Globe Shopper City was a chain of discount department stores, that operated beginning in 1960. Globe stores were located in the Southwest United States and were operated as a big-box retail arm of Walgreens for much of the chain’s operational lifecycle. Massive financial losses led to the closure and transferral of the entire chain in 1978. An independently-run Globe Store continued until its closure in 1999.

History

The first Globe Discount City opened in Houston in November of 1960 by United Mercantile Inc. United had formed earlier in 1960 to operate the existing 10-store chain of Danburg’s Department Stores which had existed since the 1930s and the forthcoming big-box Globe retail locations – the first three of which were each ¬built with over 100,000 square feet of space. All but one of the Danburg locations was in the Houston, Texas market as were the first four Globe Discount City locations. Unlike the smaller Danburg department stores, the Globe City concept featured a full grocery store, a Sun cafeteria utilizing the store’s sun logo, and an expanded variety of more than 80 departments including live pets, firearms, and a Globe Auto Center housed in an outparcel building.

With three Globe stores open in 1962, Walgreen’s acquired the United Mercantile portfolio in March of 1962. Walgreens had seen F.W. Woolworth announce its new big-box retail concept of Woolco in 1961, S.S. Kresge opening its first Kmart in January of 1962, and many others getting into large scale discount stores including the first Walmart store later in 1962 and W.T. Grant would create big-box Grant City stores. Walgreens would use Globe as its big-box brand while later creating a Walgreens Superstore line for its mid-sized pharmacy-centric stores while continuing its existing, smaller Walgreens stores.

Walgreens would extend the Globe big-box locations to its peak of 31 stores primarily in Texas and Arizona with three locations in Louisiana and two locations each in Tennessee and New Mexico. Some locations were branded as Globe Discount City with others labeled as Globe Shopper City. The stores’ positioning statement remained consistent as, “Everything under the sun priced lower.” To retain Globe’s “multi-line customer appeal,” Walgreens leased back certain departments of the store including the food market, fine jewelry (to Zales), the auto center, and the shoe department to Annual Walgreens shareholders reports touted Globe’s “per square foot” sales in the early 1970s that were over-trending and the chain’s usage of computers to track inventory, sales, and other key performance indicators. shareholder report, however, noted that the big-box competition was getting “intense” and the chain did not extend past its Southwest locations.

Downturn and Closure

United Mercantile / Walgreens closed all of the Danburg locations in 1970 as its aging mid-sized department stores were under competition from shopping mall anchors and newer big-box stores. By 1976, Globe stores were underperforming and around 40% of sales were going to the leased areas of the stores. The final three stores were opened in San Antonio early in 1977 to double the number of stores from three to six in the city. But later that same year, Walgreens reported lower earnings partly due to the financial downturn of its Globe store unit. Losses were at $10 million in 1977 when Walgreens decided to exit the big-box space closing all of its Globe Discount City locations in July of 1978. Transactions were made to convert 14 locations to Kmarts and 8 locations became FedMart stores. One location in McAllen remained as an independently-run Globe Discount City Store that operated for 20 more years closing at the end of 1999.