Jewel-T / Texas-T Discount Grocery

Jewel-T was a discount grocery operation run by the Jewel Companies from the late 1970s until about 1984. However, operations in Texas continued under the Texas-T name, separate from Jewel, for ten more years. Jewel Companies first entered the grocery business via door-to-door sales under the name Jewel Tea. Initially selling coffee and tea, and later moving on to other items that could easily be sold on foot and later from a van. Chicago-based Jewel Tea arrived in Texas in 1915 and quickly became a national company. While the door-to-door business was good, Jewel kept up with the times, opening stores around their home of Chicago starting in the 30s, mainly by purchasing other chains to expand. Jewel would later try expanding out of state in the 50s and 60s but lacked the recognition or scope to truly integrate these out-of-state chains. The door-to-door business gave Jewel information that they needed to figure out where to expand their grocery stores, and Jewel searched for a company to purchase. As luck would have it, drug store chain Skaggs needed a grocery operating partner. Skaggs had first partnered with Albertsons to open “supercenter” food and drug stores across the U.S. This operation brought Skaggs-Albertsons stores throughout North Texas, a market where Jewel had good sales. In 1977, Albertsons and Skaggs dissolved their partnership to allow Albertsons to focus on its own growth. The deal gave Skaggs the authority to run the stores using the Albertsons name, but grocery was not their forte, so Skaggs had sought a partner. On their own, Skaggs began looking for a new partner and entered serious talks with Jewel. They needed a company that had experience in grocery and name recognition to take on Albertsons. While the merger nearly happened, at the last moment, Skaggs pulled out to link up with American Stores Co instead, renaming the Skaggs Albertsons locations Skaggs Alpha-Beta. While Jewel was upset by this decision, it would not deter their spirit. In the face of being snubbed by Skaggs, Jewel promised to eventually make it to the markets where they were poised to take over. The only problem would be how to get there.

It was now the late 70s and door-to-door grocery delivery was on its last legs. The Jewel Tea Company wasn’t gone, but it was seen as out of date. Most grocery shopping had switched to in-store, and local companies ended their delivery programs. The grocery store business had also become very cutthroat, with national chains duking it out against locals, prices, and profits were lower than ever before. When expanding, Jewel had to be wary of the markets they chose. Some, like Houston, were ruled out due to their competitive nature. Others, like Dallas, were considered conquerable with the right strategy. That strategy had to be low cost, easy to roll out, and high on profits. Hedging their bets, Jewel would use a compromise between the well-known Jewel Tea name and the more straightforward “Jewel” their grocery store wore. Thus, Jewel-T was born and inspired directly by Aldi, which was expanding its way through America out of nearby Des Moines. Some other American grocers, like A&P, had tried converting some of their older stores into European-style “box stores,” as they were referred to at the time. However, Jewel-T’s operations were much closer to Aldi than those of its competitors. These new stores would be completely no-frills. They would carry about 500 products, and you shopped from pallets to cut costs. Items were not placed on shelves but left in cases and shipping cartons. Items did not have price tags; instead, you had to find a price guide or refer to hanging price signs above each pallet. Cashiers would be allowed to sit, but no one would bag your groceries or even provide free bags. The stock was limited to non-perishable items, and the stores operated on a cash-only basis. Copying A&P and others’ attempts at reusing old stores, Jewel-T would look to move into older, smaller locations left behind by larger grocers. The average size of a Jewel-T tended to hover around 10k sqft at a time when the average grocery store was closer to 35k sqft, and the first modern superstores began to break 50k sqft. The first Jewel-T locations were in the Mid-Atlanic region and opened around 1978. The stores were quite successful and greenlit further expansion, including Flordia and Texas, two areas lost during the Skaggs debacle.

With the 1979 announcement that Jewel-T was coming to Texas, competitors didn’t seem to care. They thought that one-stop shopping was the only way customers would accept buying groceries and that Jewel-T would likely be out of business in DFW quickly. Most major supermarket chains saw no threat from the tiny Jewel-T and felt the concept would be a fluke. Likely, the executives of competitors like Tom Thumb, Minyard, and Kroger thought this was simply a way for Jewel to test the waters and that they would either bring larger-scale stores here or exit, finding it unsuitable. The rationale is also likely not far from the truth. The Jewel-T concept allowed the chain to end door-to-door sales around 1981 and served as a meter of the grocery markets in these areas. The first Texas store would open in Mesquite in mid-1979, not holding any sort of grand opening spectacular but still attracting the exact type of customer they hoped for. While competitors played it down, Herman Landon, President of the Texas Division of Jewel-T, noted that their business had primarily been from customers who shopped the specials and were already stopping at multiple stores. One constant concern was the quality of Jewel-T products. As their district manager, Dale Rothe, put it, since their focus was on low prices, selling a non-satisfactory store brand didn’t make much sense because customers wouldn’t return. The chain would open its ninth DFW location by September and had 15 by the end of the year. While the competition was mostly mum on the impact of Jewel-T, one of the first complaints came towards the end of the year, when Minyard publically took issue with Jewel-T carrying a “full assortment” of Wonder Bread products. Minyard’s management felt it was unfair that a deep discounter was undercutting them. This move was the first of many to help Jewel-T succeed and make the Texas Division one of the best. Whether or not the competition acknowledged it, their prices had dropped in response to Jewel-T’s arrival. Some customers even noted that they would keep shopping at Jewel-T because it forced the competition to lower prices.

By early 1980, Jewel T had 19 locations in suburban and rural areas of North Texas. Growth had slowed a bit due to a limited number of old grocery stores to occupy. However, things would pick up again when Jewel began occupying non-traditional spaces, such as former drug stores. Another change during this time would be the addition of some perishable items to stores. The items would start straight out of the Aldi playbook: margarine, onions, and potatoes. Things that did not need refrigeration; however, this expansion of perishables would not stop there, with most stores eventually receiving a refrigerated fixture to add staples, like milk and eggs. Jewel-T would also take on another of its biggest complaints; they would finally start taking checks around this time. Jewel-T even built a new Texas distribution center in Grand Prairie to support this new growth. Located near the geographic center of DFW, Jewel-T would try opening a few locations within nearby city centers. By the end of 1981, Jewel-T had ballooned to 33 locations, making it one of the largest divisions within the discount grocery company. However, the tide would turn in 1982, when Jewel-T began cutting stores and opened only one new location. While they were mum on the surface, the reality was that as a chain, Jewel-T had been facing trouble. It had not been able to turn a profit, and, in 1982, Jewel would drop their Atlanta division altogether and were considering dropping DFW. To help their chances, Jewel T began accepting manufacturer coupons in 1982 to try and win back business. Behind the scenes, things didn’t look bright for Jewel-T; while DFW had primarily succeeded, the same could not be said about the rest of the chain. Jewel-T was losing money, Jewel stores in Chicago were suffering against the competition, and investors cast long-term doubt about the future of Jewel. Quietly in the background, a deal was being worked out between Jewel and American Stores, the company that snubbed Jewel in the Skaggs deal just a few years prior. American Stores made a deal with their former rival, including some non-negotiable financial commitments.

To help pay down debt, Jewel would be forced to sell chains and divisions that were underperforming. While it was obvious that Jewel-T would be a part of the sale, leaders of the Texas division pled their case and made some last-minute moves to avoid being shut down. When Jewel agreed to be purchased by American Stores. They stated they would sell off Jewel-T to “investor groups.” The deal with the Texas Division seems to have closed only about a week after the sale to American Stores; the remaining non-Texas Jewel-T stores would be sold to Save-A-Lot a few months later. When the stores were sold, all were allowed to continue using the Jewel-T name and logo for about two years. The stores in Texas would be sold to a management-led buyout under a newly formed company, Shop n Sav Inc. Division President Herman Landon would become President and CEO, and district manager Dale Rothe would be promoted to VP. For the first year, the company wouldn’t change much, eventually selling off their remaining Jewel-T branded products in a warehouse sale and switching advertising over to the new “Texas-T” name, which was still a pun, as Texas Tea is a nickname for oil. They would start opening new stores once the chain was fully converted. 1986 saw ferocious growth, with five locations opening while many other grocers closed. However, Texas-T would not be immune to the more significant grocery problems DFW was experiencing, and in 1987, when Safeway left, the discounter tried a new type of store. This single experimental location in the food court of the Irving Mall was named Texas-T Ice Cream. The chain already had a few mall-located stores, including one in the Irving Mall, so the pairing made sense, although it would only last about four years. The departure of Safeway was likely a mixed bag for Texas-T.  While it allowed them to become a more dominant grocer in some areas, this retail vacancy invited competitors to pop up and try the market here in Houston.

Development would pause once again; without the backing of a national company like Jewel, Texas-T was taking a large risk in opening new stores. In 1990 and 1991, a total of four new stores opened. By this point, the stores had grown a bit stagnant. They were still popular, but their limited perishables, which, unlike Aldi, had not been updated, and the loss of Jewel-T branded products caused some shoppers to reconsider. Additionally, the 90s brought new competition to the grocery market of DFW. From Hypermart USA to Food Lion, everyone seemed to want a piece of the pie, and with this in mind, the owners of Texas-T realized they wanted out. In 1994, after ten years on their own, Texas-T agreed to sell their operations to Save-A-Lot. While the store still had sales of about $65 Million/year in a business that was increasingly dependent on scale, Texas-T could not scale up. The company managed to do quite well on its own, only closing a handful of locations under its ownership and netting two stores before selling to Save-A-Lot. At this point, Supervalu had recently purchased Save-A-Lot and pledged to convert the former Texas-T locations before the end of the year. Many were updated and added perishables. However, the oldest and smallest stores were permanently shut down in the ’90s. While a handful of spaces still operate as grocery stores, since the dissolution of Save-A-Lot, most former Jewel-T spaces in the DFW area no longer operate as grocery stores. Jewel would briefly return to DFW in 1991 when American Stores decided to rename their Skaggs-Alpha Beta stores to Jewel-Osco. This decision would only last about six months, after which American Stores sold 74 Jewel-Osco locations, including those in Texas, to Albertsons.

Location List