Hale-Halsell Company

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Hale-Halsell Company

911 East Pine Street
Tulsa, Oklahoma 74115
U.S.A.
Telephone: (918) 835-4484
Fax: (918) 641-5471

Private Company
Incorporated: 1901
Employees: 4,500
Sales: $950 million (2001 est.)
NAIC: 445110 Supermarkets and Other Grocery (except Convenience) Stores; 447110 Gasoline Stations with Convenience Stores; 445120 Convenience Stores; 722310 Food Service Contractors; 422410 Grocery and Related Product Wholesalers

The Hale-Halsell Company has grown from its modest roots as a food supplier to settlers in newly opened Indian Territory in Oklahoma at the turn of the twentieth century to flourish as one of the ten largest food wholesalers in the United States and one of the 400 largest privately owned companies in the country. By following a conservative strategy of growth and acquisitions, and constantly remaining focused on the importance of high quality customer service and employee relations, Hale-Halsell has thrived amid the ever-changing landscape of the food wholesaler industry. Over the years, the company has added a dozen subsidiaries, all of which are connected to Hale-Halsell's core competency of food supply. The largest is the Git-n-Go chain of convenience stores, with over 120 outlets operating across five states.

Early Years

Hale-Halsell was the brainchild of two west Texas entrepreneurs, Tom Hale and Hugh Halsell. Hale was a successful hardware dealer who, in the late 1890s, identified the massive influx of settlers into Oklahoma as a potentially lucrative market for foodstuffs. At the time, small town merchants in frontier communities procured most of their goods from food wholesalers in west Texas. Supplies were uncertain, however, due to the unreliability of transport across the often swollen Red River. Local merchants had to tie up funds maintaining sufficient stocks of goods on hand in case of delays in resupply. Hale thought that a grocery wholesaler with a warehouse on the Oklahoma side of the river could capture the lion's share of the market, which was growing with the advent of significant coal mining operations in Oklahoma at the dawn of the twentieth century. With seed money from his old friend Hugh Halsell, Hale opened the Durant Grocery Company in Durant, Oklahoma, in 1901.

The new venture, which was incorporated as the Hale-Halsell Grocery Company in 1903, quickly blossomed, and Hale began to extend his reach across the whole of the Oklahoma Territory. In 1904, Hale-Halsell purchased the Townsend Grocery Company in McAlester, Oklahoma, which soon became the hub for the company's expanding operations. (The company's headquarters remained in McAlester until 1969, when they moved to Tulsa.) With such a wide distribution network, Hale-Halsell's merchandise soon graced the shelves of a majority of the food retailers in the Oklahoma Territory. By 1908, though, Muskogee had surpassed McAlester as the engine of Oklahoma's growth, and Hale-Halsell bought a building there to broaden its sphere of operations still further. Oil was discovered near Tulsa in 1909, leading to a tremendous population boom. To capitalize on this new market, Hale-Halsell acquired Tulsa's Harvey Wholesale Company in 1912. Hale-Halsell added additional branch offices in Holdenville in 1918, Hugo in 1920, Ada in 1922, and Okmulgee in 1926.

As the company expanded geographically, Hale-Halsell also broadened its offerings. In 1915, it renovated its McAlester headquarters to install Oklahoma's first coffee roasting plant and soon added a peanut butter factory as well. During the 1920s and 1930s, the company diversified its manufacturing operations further when it began to grind and pack spices and create flavor extracts. Hale-Halsell's products were distributed under the labels "Hale's Pride," "Hale's Leader," "Choctaw," and "Cowboy."

Over the next few decades, Hale-Halsell gradually increased the orbit of its operations from its Oklahoma heartland to include parts of Texas, Arkansas, Kansas, and Missouri. After Tom Hale died in 1941, his son Elmer continued to run the company.

Growth and Innovation in the 1950s–60s

The economic boom and the demographic changes that occurred following World War II brought new pressures to bear on the grocery wholesaler industry. To position itself to compete effectively in this new environment, Hale-Halsell constructed huge, modern warehouse complexes in Tulsa in 1951 and Durant in 1953 and closed its plants in McAlester, Hugo, Ada, and Muskogee in 1954. In 1955, a third generation of Hales assumed leadership of the company when Tom's grandson, Elmer Hale, Jr., took the reins from his father. That same year, Hale-Halsell moved to develop a retail presence when it acquired Sipes Food Markets, a Tulsa-based group of grocery stores that had previously been owned by the Sipes family. This bit of vertical integration ensured Hale-Halsell a captive outlet for its wholesale goods. The company's refocusing continued in the late 1950s, as it began to exit the manufacturing sector. By 1963, Hale-Halsell had shed all of its manufacturing operations.

One of the most significant turning points in the company's history occurred in 1958, when Hale-Halsell opened its first Git-n-Go convenience store. The name was selected by Elmer Hale, Jr., who chose the moniker because the store was intended to cater to customers who would "git in there and then want to go along with their business," as Hale-Halsell CEO and board chairman Bob Hawk told Tulsa World (August 30, 1998). Elmer Hale, Jr. had decided to enter the nascent convenience store industry after seeing some of the early 7-Eleven stores in Texas. The original concept for the field was exactly what its name suggested: convenience, particularly for one car families who would rather pay a premium to pick up a few grocery staples close to home than brave long check-out lines at an area grocery store. The industry was in its infancy (in 1958, there were barely 500 convenience stores worldwide), but with its long history of food provision, entry into this new sector represented a logical step for Hale-Halsell.

Git-n-Go had six stores in operation by 1959. Together they generated $495,000 in sales. These outfits were set up along the lines of open-air roadside fruit stands, where customers could stop by and quickly grab a few staple items. However, they soon evolved into full-fledged retail venues, complete with air conditioning. The convenience food industry proved to be exceptionally competitive, particularly in the brutal Tulsa market, which has the highest per capita number of convenience stores in the country. To remain viable, Hale-Halsell had to adapt its Git-n-Go business plan frequently. Convenience stores made inroads on the traditional grocery retail market throughout the 1960s, but grocery stores fought back by adding express lanes and extending their hours of operation, thereby forcing convenience store owners to find new market niches.

In the late 1960s, Git-n-Go identified a new area of opportunity: gasoline sales. "We surveyed the market and realized that the old-time filling station was going by the wayside," Bob Hawk commented in the 1998 article in the Tulsa World. "Since the consumer needed an outlet for gasoline, we could supply that and then, when they came in to pay, they'd buy something else." Gas sales proved to be an explosive market throughout the convenience store industry. By 1998, Git-n-Go's biggest local competitor, QuikTrip Corporation, sold more gas in the Tulsa area than Philips Petroleum and Texaco Inc. combined.

Changes in the 1970s–80s

Despite the success of its Git-n-Go subsidiary, Hale-Halsell did not restrict its focus to the convenience store segment of the retail market. In 1972, the company increased its presence outside Oklahoma when it bought a partnership interest in the two-store Foodtown Supermarkets group of Rogers, Arkansas. Hale-Halsell further expanded its supermarket business two years later when it acquired a partnership interest in the 26-store United Supermarkets of Oklahoma chain. In 1976, Hale-Halsell celebrated its 75th anniversary by buying the Tulsa-based Fadler Company, which traced its own roots back to 1913 when its founder, L.F. Fadler, began selling produce from a wagon. Over the years, Fadler had continued to specialize in fruits and vegetables and later added frozen foods and institutional food service to its repertoire, serving over 300 retail customers and 500 institutional food service accounts. Hale-Halsell soon brought Fadler's retail arm in-house, allowing Fadler to concentrate exclusively on food service supply. (By 1998, Fadler had grown to serve more than 5,000 institutional customers—including hospitals, schools and restaurants—in Oklahoma, Kansas, Missouri, and Arkansas, with frozen foods accounting for roughly half the company's business.)

In the latter part of the 1970s, Oklahoma, along with its neighboring states, experienced a massive economic boom as the Arab oil embargo drove up prices for domestic oil. During this period, many businesses embarked headlong on expansion plans, extending themselves greatly and taking on vast amounts of debt. Hale-Halsell, by contrast, chose a more conservative tack, paying off its outstanding debt entirely and making only cautious investments in the five core states (Oklahoma, Arkansas, Kansas, Missouri, and Texas) in which it operated. Many industry analysts questioned the wisdom of this approach, but Hale-Halsell stuck to its guns. "When the economy was hot, we thought it was too hot and … elected to get totally out of debt," Bob Hawk told the Tulsa World (March 19, 1989). "People thought we were going broke." Hale-Halsell was vindicated when the region's economy entered a deep and prolonged slump and interest rates skyrocketed in the early 1980s. With no debt to service, the company was able to weather the storm without layoffs and was well-positioned to expand when interest rates dropped in the mid-1980s.

Company Perspectives:

Our mission is to aggressively pursue a market-driven, customer-focused strategy that will provide the elements we need to succeed, meet competition, and adapt to and influence change in our industry. We will provide goods, services, and programs of superior quality and value.

In 1986, Hale-Halsell's Fadler subsidiary purchased Curtis Restaurant Supply, whose operations were centered in Tulsa. Curtis was in the business of designing and equipping food service venues, which represented another logical extension of Hale-Halsell's foodstuff empire. "We complement the parent company," Curtis's president Tom Byford recalled in an interview published in a December 2001 "Advertorial Supplement" in the Shelby Report commemorating Hale-Halsell's 100th anniversary. "We can build a restaurant, grocery store or convenience store … from the ground up and then we can supply the facility with food and equipment." (The addition was a wise one. Between 1991 and 2001, Curtis's annual sales jumped from $3 million to over $10 million.)

Much of the growth in the 1980s, though, was focused on Hale-Halsell's Git-n-Go subsidiary, whose range of offerings the company continued to update in order to meet and stay ahead of consumer demands. "Demographics are changing," a Git-n-Go manager told the Tulsa Tribune for May 26, 1989. "We used to have the 18–34 year-old male customer wanting quick sandwiches, pop, beer. Now the customer is more mature. We sell cosmetics and have fountain things." Indeed, soda fountains had been a tremendously successful innovation. Git-n-Go began installing the drink dispensers in 1984, and by 1989 fountain drinks accounted for 12 percent of the chain's $90 million in revenues. During the 1980s, the company also expanded its auto parts offerings and added touchless car washes, which proved to be very popular.

The 1980s were also a time of dramatic change in Hale-Halsell's core sector of food wholesaling. A wave of mergers and consolidations crested over the industry, driven in large part by the entry of retail giants into the food business. "Wal-Mart, Kmart and Target supercenters and wholesale clubs have changed how the entire food industry operates," Hale-Halsell CEO Bob Hawk told the Tulsa World for June 12, 1994. "Grocers have gone from competing just with other grocery stores to compete with lots of non-traditional food retailers." The economies of scale and technical innovations the huge retailers brought to the grocery industry forced many traditional wholesalers to scramble to keep pace. Hale-Halsell identified the personal relationships built from a stable employee base and strong customer service as its biggest point of differentiation from such giant competitors and strove to strengthen the long-term relationships that were its hallmark. Doing so also required careful attention to customer preferences and a nimble operating style that allowed for quick adaptation to shifting consumer demands. "If we have a customer," Hale-Halsell president and chief operating officer Jim Lewis explained in a December 2001 "Advertorial Supplement" in the Shelby Report, "our aim is to spoil them so bad, nobody else will have them."

Expansion and Diversification in the 1990s and Beyond

In 1991, Hale-Halsell acquired ValuFare Supermarkets, a two-store outfit in Oklahoma City. That same year, the company cracked Forbes ' list of America's top 400 privately held companies at number 300, with revenues of $607 million. The year 1992 was also a successful one for Hale-Halsell, which now led the wholesale food industry with a whopping $2,667 in sales per square foot of warehouse space, moving the company up to number 276 on the Forbes list. Reflecting the intense competition in the wholesale food industry, though, sales per warehouse square foot dropped dramatically the following year, to $1,313. While others in the field sought to regain lost ground by trying to spice up their warehouse outlets with ready-to-eat meals and fast food, Hale-Halsell decided to return to its core principals. "We are never going to be another Boston Market," company CEO Bob Hawk told the Orange County Register. "We have to get back to the basics of merchandising and selling food." By 1996, sales were up more than 72 percent over the previous year.

The 1990s were kinder to Git-n-Go, as the company opened nearly ten stores a year and expanded its presence in growing markets such as Oklahoma City. Git-n-Go also began to experiment with "junior" stores, with a 1,500-square-foot floor plan rather than its customary 3,100- to 3,200-square-foot design. These more diminutive models allowed Git-n-Gos to be built on smaller lots in more prime locations, though the majority of the company's new openings were of the larger variety.

In the mid-1990s, Git-n-Go also started incorporating fast food outlets, such as McDonald's Express, into some of its stores. The concept failed to take off, but the company was not chastened. "When you're as aggressive as we are," Bob Hawk remarked in the August 30, 1998 Tulsa World, "you're not going to have every experiment work." By the late 1990s, Git-n-Go was beginning to install drive-through windows in many of its stores.

By the turn of the 21st century, gas sales were accounting for nearly 65 percent of Git-n-Go's revenues. Recognizing a golden opportunity to diversify further, Hale-Halsell formed a new subsidiary, Forefront Petroleum Company, in 2000. Forefront was tasked with distributing gas to all of Hale-Halsell's convenience stores and distribution centers. The venture proved so successful that Forefront began selling to outside customers as well.

Key Dates:

1901:: Tom Hale and Hugh Halsell found the Durant Grocery Company.
1903:: Durant Grocery Company is incorporated as the Hale-Halsell Company.
1915:: Hale-Halsell begins manufacturing operations with the first coffee-roasting plant in Oklahoma.
1941:: Tom Hale dies; Elmer Hales takes control of Hale-Halsell.
1958:: Hale-Halsell opens its first Git-n-Go convenience store.
1969:: Hale-Halsell moves its corporate headquarters from McAlester to Tulsa.
1972:: Hale-Halsell expands into Arkansas with its purchase of an interest in Foodtown Supermarkets.
1976:: Hale-Halsell buys Fadler Company.
1986:: Hale-Halsell's Fadler subsidiary acquires Curtis Restaurant Supply.
1991:: Hale-Halsell buys ValuFare Supermarket chain.
2000:: Hale-Halsell establishes Forefront Petroleum Company and takes over Gro-Mor.
2001:: Hale-Halsell celebrates its centenary and establishes the Blue Valley Water Company.

Also in 2000, Hale-Halsell acquired the Gro-Mor Company. Gro-More was in the business of building and remodeling convenience stores and had done a great deal of work with Git-n-Go. The deal allowed Hale-Halsell to become even more vertically integrated and to establish a greater presence in the service side of the food industry. In 2001, the company celebrated its 100th anniversary and added another subsidiary, Blue Valley Water Company, a bottled water supplier. With a strong base in the wholesale food market, and with subsidiaries capable of doing everything from building, equipping, and remodeling retail and institutional food service venues, to retailing foodstuffs, to delivering gasoline and transporting inventory, Hale-Halsell was positioned for another century of success.