Schwegmann Brothers Giant Supermarkets

Schwegmann Brothers Giant Supermarkets

Schwegmann Bros Giant Super Market postcard Jefferson Parish location c. 1950s
Trade name	Schwegmann's
Company type	Private
Industry	Grocery
Founded	February 17, 1859 (1859-02-17)
Founders	John G. Schwegmann
Defunct	December 31, 1999 (1999-12-31)
Fate	Bankruptcy and Liquidation
Headquarters	New Orleans, Louisiana, U.S. , United States
Number of locations	18 at its height, prior to merger
Areas served	New Orleans Metropolitan area, Louisiana Baton Rouge, Louisiana
Number of employees	Around 5000 at peak
Divisions	Groceries Pharmacy

Schwegmann Brothers Giant Supermarkets, often referred to simply as Schwegmann or informally as Schwegmann's, was a grocery retailer operating in the New Orleans metropolitan area and maintaining a single store in Baton Rouge until 1997. The chain pioneered numerous innovations in grocery retailing and played a role in shaping the development of later large-scale retail formats during the late 20th and early 21st centuries. The modern iteration of the company was founded and led by John G. Schwegmann, although earlier family members such as his uncle and grandfather operated precursor businesses.

During the mid-1900s, Schwegmann Brothers Giant Supermarkets introduced several merchandising techniques that transformed grocery retail. These innovations included: Self-service, direct sourcing, consistent low pricing combined with discounting strategies, rapid inventory turnover, and the concept of one-stop shopping. Their store layouts were designed to capitalize on the growing prevalence of automobile travel. Many of these merchandising methods eventually became standard among major retail chains.

Founding

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Example of a traditional corner grocery in New Orleans. Such stores became increasingly rare across the United States during the latter half of the 20th century.

Early history

The company’s roots trace back to the mid-19th century when Garret Schwegmann Sr. emigrated from Germany’s Saxony region to New Orleans. After serving in the Union Army during the United States Civil War, he returned to New Orleans and found work at the Henke Family Grocery Store. Upon marrying the owner's daughter and starting a family, Garret Sr. launched his own grocery operation. Although the exact location remains uncertain, it is believed his store was situated near the intersection of Dauphine Street and Almonaster Avenue (formerly Enghein Street). Despite achieving success as a grocer, Garret Sr. intermittently left and reentered the grocery business to pursue other interests.

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Interior view of the Schwegmann Grocery Store at Piety Street and Burgundy Street in New Orleans, circa 1895. Garret Jr. appears on the far right; John Schwegmann Sr. is second from left.

Garret Schwegmann Jr., son of Garret Sr., also pursued a career in grocery retail, working at multiple corner stores throughout New Orleans, including his father's establishment which had relocated to Piety Street. On March 3, 1895, he acquired this store from his father and reopened it under the name G.A. Schwegmann Grocery Company. He managed operations alongside his brothers Henry and John Schwegmann.

Under Garret Jr.'s leadership, the store underwent renovations and built a reputation for offering affordable products within the local market. By the early 1900s, he rebranded the business as Schwegmann Brothers Company.

Garret Jr. implemented operational changes that contributed to his store’s prosperity. While most grocery outlets during this era were small family-run shops that often extended credit to customers, he eliminated credit sales in favor of maintaining consistently low prices. The store provided delivery services as well. Other advancements included expanding store size, increasing product variety with offerings such as fresh baked goods, seafood, and game meats—items uncommon in typical corner groceries—and adopting self-service rather than full-service models supported by a larger workforce. Additionally, Garret Jr. established Schwegmann's Bar adjacent to their Piety Street location within New Orleans’ Bywater District.

Beyond groceries, Garret Jr. invested significantly in other ventures including real estate holdings throughout New Orleans. In 1939, he sold his grocery business to his brother John Schwegmann Sr.

John G. Schwegmann

John Gerald Schwegmann (1911–1995) was the son of John Schwegmann Sr. and nephew to Garret Schwegmann Jr. Although raised in a family engaged in the grocery trade, during his early adulthood John Gerald Schwegmann initially pursued careers in other sectors such as real estate and banking. By the early 1940s, he recognized that grocery retail was transforming significantly across the United States, presenting a promising opportunity within the Greater New Orleans area. Among these transformations were the increasing size of grocery stores, expanded product variety, and their enhanced attractiveness to customers benefiting from widespread automobile access.

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Schwegmann Bros. Giant Supermarket No. 1, located on St. Claude Avenue in New Orleans, as photographed in 2014

In 1943, John G. Schwegmann acquired a parcel of land for $18,000 at the corner of St. Claude Avenue and Elysian Fields Avenue in New Orleans with the intention of establishing a large-scale grocery store. Construction faced delays due to material shortages caused by World War II. The venture was financed privately, and John G. Schwegmann personally undertook much of the building process, including architectural design, supported by his brother Paul Schwegmann; however, specialized contractors were employed for certain construction elements. The store officially opened on August 23, 1946, with construction expenses amounting to $1.50 per square foot. The initial store spanned 16,000 square feet—somewhat larger than the typical American grocery store size at that time, which averaged around 10,000 square feet.

John G. Schwegmann grew his business into a supermarket chain operating primarily throughout southeast Louisiana, focusing mainly on the Greater New Orleans metropolitan region. Unlike later large-scale retailers that expanded nationally or internationally, Schwegmann maintained strong regional ties and opted against broad geographic growth.

Driven by his opposition to price-fixing practices, Schwegmann entered local and state politics, which limited his direct involvement in managing Schwegmann Brothers Giant Supermarkets full-time. His political career included service in the Louisiana State Legislature as well as a position on the Public Service Commission.

In 1978, John G. Schwegmann publicly outlined his stores’ business model, highlighting key elements such as consistent low pricing, swift inventory turnover, and convenient one-stop shopping experiences. At that time, he reaffirmed his dedication to serving exclusively the Greater New Orleans metropolitan market while acknowledging the competitive advantages held by national retail chains.

After suffering a stroke in 1977, John G. Schwegmann stepped back from active management responsibilities at Schwegmann Brothers Giant Supermarkets.

John F. Schwegmann

John Francis Schwegmann, son of John G. Schwegmann, began his career at Schwegmann Brothers Giant Supermarkets as a young adult, undertaking various leadership roles within the company. In 1979, he acquired the grocery chain from his father, John Gerald Schwegmann, and assumed the position of chief executive officer.

Subsequently, John F. Schwegmann also served as a Public Service Commissioner, a position previously held by his father. During his tenure as CEO, the company expanded by acquiring another grocery chain; however, this expansion contributed to financial difficulties that eventually led to the firm’s sale and ultimate liquidation.

Business practices

From the outset, Schwegmann and his associates prioritized return on investment over the traditional focus on return on sales common among small neighborhood grocers. This strategy involved offering low prices to encourage rapid inventory turnover. Although the store operated on a self-service model, management maintained a strong emphasis on customer service, ensuring clerks were available in each department. The initial store featured a liquor section that provided discounted spirits through self-service. Additionally, it utilized a loudspeaker system to announce incoming phone calls for customers, taxi arrivals, and promotional specials. Early in its operation, the store expanded its offerings beyond groceries to include departments selling drugs, cosmetics, hardware, sporting goods, housewares, and even incorporated a snack bar. Approximately 250 shopping carts were available at this first location.

Financially, the original store proved successful almost immediately. By 1955, it achieved annual sales of $5.13 per square foot, surpassing the national average of $4.25 per square foot for supermarkets of comparable size. The average transaction value was $13.17—roughly twice the national supermarket average at that time.

John G. Schwegmann’s brothers, Paul and Anthony Schwegmann, were nominal partners in the business; however, John G. Schwegmann remained the primary manager.

Expansion

On December 5, 1950, Schwegmann launched a second supermarket that was remarkably large for its era. Situated at 2701 Airline Highway in suburban Jefferson Parish, just outside New Orleans, this store covered 84,000 square feet—nearly four times what was then considered an optimal supermarket size—making it the largest supermarket in the United States upon opening. The structure consisted of three connected quonset hut-style buildings sharing a uniform facade without internal walls separating them. While heating was minimal, the store featured a rooftop water-cooling system designed to mitigate the region’s intense heat and humidity. Catering to the growing automobile culture and suburban expansion of the period, the property included parking accommodations for 2,000 vehicles. Financing for this project involved loans that left Schwegmann with substantial debt; consequently, initial inventory was incomplete and cash registers were not installed at opening. In 1952, a full-service pharmacy offering prescription drugs was introduced within the store—a pioneering move among supermarkets at that time. By 1955, all available floor space had been fully utilized.

The Airline Highway location also leased portions of its space to other retailers to enhance its one-stop shopping appeal—a concept uncommon in the early 1950s. Leased departments included dry goods, footwear and shoe repair services, jewelry, consumer electronics, florists, locksmith services, and a barbershop. The company itself operated both a snack bar and a barroom, permitting customers to consume alcoholic beverages while shopping.

Building upon business strategies developed at the original store, this new supermarket quickly achieved financial success after opening.

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Rooftop parking at the former Schwegmann Brothers Giant Supermarket on North Broad Street in New Orleans

The subsequent significant development for the chain was located in New Orleans’ rapidly growing Gentilly neighborhood. The store at 5300 Old Gentilly Road was situated within city limits rather than in suburban areas. To fund construction—the largest project undertaken by the chain—the company issued "Schwegmann bonds," which were often sold in small denominations to encourage community investment from potential customers. This financing method enabled full payment for construction costs. The Gentilly store adopted merchandising techniques similar to those used at Airline Highway but on an expanded scale. Its one-stop shopping experience further incorporated additional services such as a barbershop, dental office, and jewelry store.

As the chain grew in number of locations, Schwegmann Brothers Giant Supermarkets engaged architect Edward Mung-Yok Tsoi for design enhancements and innovations. Among these improvements was rooftop parking at stores. New construction methods like lift-slab construction were employed to streamline building processes. By 1995, the chain operated 18 stores with Old Gentilly Road remaining its largest location.

The final stores in the Schwegmann Brothers Giant Supermarkets chain opened in 1993.

Marketing

Schwegmann Brothers Giant Supermarkets catered to customers from a wide spectrum of economic backgrounds by offering affordable food items alongside a variety of regional specialties. Their marketing approach targeted a culturally and financially diverse clientele. To enhance convenience, the stores incorporated multiple services such as banking facilities, fuel stations, travel agencies, and options for paying utility bills, aligning with their one-stop shopping concept.

From early on, Schwegmann’s embraced scrambled merchandising techniques, placing unexpected products at prominent locations like aisle end-caps or freestanding displays to capture shoppers’ attention. Within the stores, specialty vendors operated on leased spaces, while the inventory prominently featured numerous private label brands.

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Bottle of Schwegmann's store-brand "1889" whiskey (image courtesy of Infrogmation)

Several private labels were uniquely developed for the chain. For instance, the "Old Piety and Burgundy 1889" label consisted of a blend containing 35% aged whiskey and 65% rectified spirit. By 1978, Schwegmann’s offered around 30 exclusive private brands in addition to carrying most leading national brands.

To enrich the shopping experience, customers were allowed to purchase draft beer and enjoy it while browsing the aisles inside the store.

During the 1980s, an advertising jingle leveraged the local New Orleans vernacular of "making groceries," rather than common phrases like "grocery shopping" or "buying groceries": Template:Quote

Schwegmann’s utilized their paper grocery bags as a platform for advertorial content, which often featured human interest narratives or advocacy messages. Frequently, these messages included endorsements for political candidates.

In the late 1980s, the chain organized annual Schwegmann Food Shows hosted at the Louisiana Superdome. These events typically provided attendees with numerous discount coupons aimed at promoting further purchases at Schwegmann stores.

Consumer advocacy

When Schwegmann Brothers Giant Supermarkets was established, price fixing was a widespread practice in retail markets. This often manifested through state-enforced fair trade laws, essentially government-mandated price controls. Additionally, retail price maintenance, or top-down pricing, was prevalent at the time. John G. Schwegmann recognized that these practices were detrimental both to his business and to the interests of consumers.

In its early years, the supermarket chain offered liquor at prices below those set by producers. Starting in 1949, John G. Schwegmann actively contested various price-fixing arrangements through legal channels and by influencing public opinion. His challenges targeted fixed pricing on liquor, prescription medications, and dairy products. Under Louisiana’s Alcoholic Beverage Control Board regulations, retailers were compelled to apply markups ranging from 15% to 50%, depending on the type of alcoholic beverage.

The practice of selling discounted liquor led to legal disputes initiated by Calvert Distillers Corporation and Seagram Distillers Corporation. Although some court rulings went against Schwegmann, the company achieved a significant victory in 1951 when the United States Supreme Court overturned the Miller-Tydings Act of 1937, which had permitted price fixing—a law that Schwegmann had legally challenged.

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Schwegmann Brothers Giant Supermarkets shopping bag featuring an advertorial promoting discounted prescription drug prices

In 1952, Congress enacted the McGuire-Keogh Act, granting manufacturers in pharmaceuticals and other sectors the authority to establish retail prices for their products.

In 1953, Eli Lilly and Company filed a lawsuit against Schwegmann Brothers Giant Supermarkets because its pharmacies sold insulin—a vital medication for certain medical conditions—at prices below those set by Eli Lilly. At that time, Schwegmann priced insulin at $2.08 per unit compared to the $2.83 per unit mandated by Eli Lilly. The supermarket chain responded with an advertorial stating: Template:Quote

Beyond Eli Lilly, other pharmaceutical companies such as Hoffmann-LaRoche, Sterling Drug, Colgate Palmolive, Johnson & Johnson, Bristol-Myers, and Mennen also initiated legal actions against Schwegmann Brothers Giant Supermarkets. At that time, fair trade laws applied primarily to branded pharmaceutical products; over-the-counter drugs carried the pharmacy’s name rather than a brand. Consequently, Schwegmann continued selling below fixed prices for prescription drugs and actively advertised these prices—a rare practice in 1950s America. In 1956, the Louisiana Supreme Court ruled favorably for Schwegmann regarding fixed pricing on prescription medications.

Despite favorable court decisions concerning liquor and drug pricing, dairy product pricing in Louisiana remained skewed toward producers rather than consumers or retailers. Beginning in the 1950s, Louisiana’s Commissioner of Agriculture set retail dairy prices at an 8% markup over base costs. Initially opposing pending price-fixing legislation before the state legislature, John G. Schwegmann later complied with state pricing by marketing dairy items under store brands. The supermarket also sourced dairy products from out-of-state suppliers and sold them in its stores; courts determined these out-of-state purchases were exempt from Louisiana’s pricing regulations. John G. Schwegmann pursued elected office partly to oppose these restrictive pricing laws. Legal battles over dairy pricing persisted throughout the chain’s existence. As recently as 2013, dairy pricing remained a contentious political issue in Louisiana.

Bankruptcy

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The former National Canal Villere location in New Orleans, acquired by Schwegmann before Schwegmann itself was purchased by Kohlberg

In 1978, the chain's ten stores generated sales nearing USD 250 million. By the late 1980s, Schwegmann Brothers Giant Supermarkets commanded between 36% and 38% of the grocery market share within the Greater New Orleans Metropolitan area. In 1989, their annual revenue reached US$455 million. However, as external competitors from outside the local region gained influence, Schwegmann’s annual sales dropped over the following decade to roughly US$289 million by 1998, despite an expansion in store count. This decline placed them third in market share behind two supermarket chains headquartered beyond Greater New Orleans.

In 1995, Schwegmann Brothers Giant Supermarkets purchased the National Canal Villere Chain’s 28 grocery outlets located in the New Orleans Metropolitan Area; this chain was previously owned by the National Tea Company. The acquisition cost was approximately US$150 million, which subsequently strained Schwegmann’s cash flow. Following this purchase, both inventory management and service standards deteriorated, issues from which the company never fully recovered. Two years later, in 1997, Schwegmann Brothers Giant Supermarkets was acquired by Kohlberg Kravis Roberts & Company, a firm specializing in revitalizing troubled businesses. Despite these efforts, Schwegmann Brothers Giant Supermarkets filed for bankruptcy in 1999 and permanently shut down operations.

Legacy

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Abandoned Schwegmann Brothers Giant Supermarket building as of 2011; briefly utilized by another grocery retailer

Schwegmann Brothers Giant Supermarkets left a notable impact both within its regional market and on retail practices nationwide. The stores served as early examples of big box retailing that became widespread in the latter decades of the 20th century, characterized by extensive product assortments and consistently low prices. Distinct from later big box chains, Schwegmann’s approach emphasized a strong relationship with the local community that fostered reciprocal benefits for both the owners and their customers.

See also

• John G. Schwegmann
• Melinda Schwegmann
• List of defunct retailers of the United States
• Schwegmann Bros. Giant Super Markets v. McCrory at Wikisource
• Media related to Schwegmann's at Wikimedia Commons

Further reading

• The People's Grocer – https://www.thepeoplesgrocer.com/
• Williams, Elizabeth M. New Orleans: A Food Biography. AltaMira Press, 2012, pp. 89–90. ISBN 978-0-7591-2138-6.
• Reso, Richard A. Continuing the Tradition: A History of the Schwegmann Company. Schwegmann Brothers Giant Supermarkets, 1994.

External links

• How Schwegmann revolutionized grocery shopping in New Orleans