Cunningham, Harry Blair
CUNNINGHAM, Harry Blair
(b. 23 July 1907 in Home Camp, Pennsylvania; d. 11 November 1992 in North Palm Beach, Florida), discount retail pioneer who opened the first Kmart store in 1962 and transformed the company into a retail giant during his tenure as president and chief executive officer of S. S. Kresge Company (later Kmart Corporation) from 1959 to 1970.
Cunningham was born on a Pennsylvania farm and graduated from Mifflintown High School in 1925. He left college after his sophomore year at Miami University in Oxford, Ohio, to work as a reporter at the Harrisburg Patriot newspaper from 1927 to 1928. That year, he entered the management training program of S. S. Kresge Company, a variety-store retailer founded in 1899 as a five-and-dime company. In 1935 he married Margaret Diefendorf, with whom he had three daughters. He worked his way up from the stockroom, becoming a store manager in 1940 and a district manager in 1947.
Cunningham's steep rise to success began in 1951, when he was promoted to assistant sales director at the company's Michigan headquarters. It was his idea to experiment with the same checkout system that had gained popularity in grocery stores, and the system helped the company expand into new suburban shopping centers throughout the 1950s. Company leaders recognized Cunningham's leadership potential, first inviting him to attend board meetings and then appointing him as a director in 1956.
In 1957 the company's board of directors created the new post of general vice president and appointed Cunningham, assigning him to the task of finding new, profitable endeavors for Kresge. He spent two years crisscrossing the country, racking up 100,000 miles in the air, to study a phenomenon just beginning to sweep the retail industry—discounting. "The retailers I visited walked their stores and shared their experiences with me," Cunningham said later. "At the end of two years I probably knew as much about discounting as anyone in America." At that time Kresge was made up of variety stores of about 6,000 square feet, which stocked mostly small items marked up as much as possible. Discounting, on the other hand, involved constructing larger stores and pricing with smaller markups, with the profits coming from faster turnover of merchandise. Cunningham saw that the concept fit with the emerging trend of more bargain-conscious consumers.
When Cunningham was appointed company president in 1959, he set Kresge on a path to becoming a discounter. Three years later he oversaw the opening of the first Kmart store in a Detroit suburb. It had about forty departments, ranging from an auto service and tire center to clothing, sporting goods, and a patio and garden shop. The store, the first of eighteen Kmarts to open that year, was what Cunningham later described as a "miniature one-stop shopping center." As cities nationwide saw retail development moving out of their cores and into the outskirts, Kmart stores ranging from 60,000 to 132,000 square feet sprouted up in suburbs, surrounded by parking lots with room for hundreds of cars. Kresge became the first variety store chain to jump into the discount business.
Some skeptics at the time thought discounting was a "flash in the pan that had run its course," according to a 1966 article in Business Week. But after years of lagging profits, the Kmart transformation caused the company's sales to zoom up more than 20 percent a year through the 1960s. As less-profitable Kresge stores closed, more than forty new Kmarts opened each year. In 1966 the company surpassed $1 billion in sales, up from $450 million in 1962. In 1967 Cunningham was elected chairman of the company's board. By 1970 Kresge was the nation's number-one discounter, with growth that outpaced rivals, including Sears, Roebuck and Company, J. C. Penney Company, and F. W. Woolworth Company, which had been much slower in opening its Woolco discount department stores. Sales for Kresge were $2.2 billion by 1970, and the company had 33.7 million square feet of retail space. In 1970 Cunningham resigned as president, remaining as board chairman until 1972, when he relinquished duties to his chosen successor Robert E. Dewar. Cunningham was named honorary chairman in 1973, a post he held until 1992, when he died in his sleep at age eighty-five. The company changed its name to Kmart Corporation in 1977.
Even after Kmart's meteoric growth became overshadowed by the rise of rival Wal-Mart in the 1970s and 1980s, Kmart remained a powerful force in retailing, growing at one point to more than 4,000 stores. In the 1990s Kmart stumbled with consumers as it failed to keep up with the upgrading and modernizing of its competitors. The company closed waves of lower-performing stores, eventually filing for debt protection in bankruptcy court in 2002. It was the largest retail bankruptcy filing in history.
In spite of the demise of Kmart, Cunningham's legacy as a retail pioneer remained strong. Wal-Mart founder Sam Walton wrote in his autobiography that Cunningham's leadership helped spur Wal-Mart to its own success as the world's largest company. Cunningham, he wrote, "should be remembered as one of the leading retailers of all time." In 1993 David Pinto, editor of Mass Market Retailers magazine, wrote that Cunningham was "quite simply the single most important figure in the history of discount retailing in America."
Cunningham was profiled in Business Week magazine (29 Jan. 1966 and 24 Oct. 1970). David Pinto's column is in Mass Market Retailers (8 Feb. 1993). An obituary is in the New York Times (13 Nov. 1992).