Why Fry’s Was Once the Best Place to Buy Gadgets in Silicon Valley
Late on Tuesday, Fry’s Electronics announced that it would abruptly close all 31 of its electronics retail stores. In a statement on the company’s website, Fry’s said that it had “made the difficult decision to shut down its operations and close its business permanently as a result of changes in the retail industry and the challenges posed by the Covid-19 pandemic.”
Fry’s Electronics has long occupied a strange place in Silicon Valley culture — at times totally nostalgic, and at others highly practical. The store originally launched in Sunnyvale, California — the heart of the Valley — in 1985. Fry’s Electronics was founded by three sons of entrepreneur Charles Fry, who built a successful supermarket business that still bears his name today (the grocery stores are now part of Kroger and aren’t affiliated with Fry’s Electronics).
According to Forbes, when their father gave them the proceeds from the sale of his grocery chain, the Fry brothers had little interest in entering the food business. Instead, they joined with a fourth partner and launched Fry’s Electronics. Grocery retailing is an odd business, with obscenely high revenues (the average individual grocery store brings in $14 million per year in gross sales) and obscenely low margins. Grocery stores thrive on scale — occupying cavernous spaces and moving tons of product, they often reap enormous profits, even if their margins are a paltry 2.5%.
The Birthplace of the Hard Drive is Now an AutoZone Parking Lot
Why can’t Silicon Valley build itself a single decent monument?
The Fry brothers’ core innovation was to take this same business model and apply it to electronics retail. From the very beginning, Fry’s Electronics stores were massive. The brothers’ first store occupied 20,000 square feet, and just before the chain closed this week, its typical store was between 50,000 and 180,000 square feet. That scale allowed Fry’s to sell a massive variety of electronic gadgets — as many as 50,000 unique products in each store.
From the get-go, Fry’s catered a bit to consumers, but mostly to hard-core technologists. In the 1980s and 1990s, you could visit Fry’s in order to buy the latest electronic calculator or personal computer, but also to buy all manner of computer components. Billing itself as a “one-stop-shopping environment for the Hi-Tech professional” providing “products representing the latest technological trends and advances in the personal computer marketplace,” Fry’s sold all manner of chips, cards, cases, and other computer and electronic parts.
That tech pro-centered legacy endeared the store to many in the Valley, who knew they could always turn to Fry’s and its massive stores for “keyboards, integrated circuits [and] cans of Coke” as well as sundries and items catering to its then almost entirely male audience, like “copies of Playboy magazine.” That legacy of seemingly bizarre merchandizing choices continued up until Fry’s closure — as of 2020, the store was a major Apple retailer but also sold items including cookware, cologne, and women’s perfume.
The model worked less well in the age of e-commerce when huge brick-and-mortar stores became a costly liability instead of an asset.
My first encounter with Fry’s was in 2014, shortly after I moved to California to be near Silicon Valley. I was looking for an obscure piece of VOIP hardware for my company’s new office, and Fry’s was the only electronics store in the Bay Area that had it in stock, so I made the 45-minute trek from Walnut Creek to Fremont, California, to pick the item up. What I found at Fry’s was an electronics retailer which that totally different from the Microcenters and Radio Shacks I had visited growing up.
Fry’s stores were massive, with high ceilings and long rows of aisles, along with large, block-print signs hawking various components, “As Seen on TV” products, and much else. Under the pale light of scores of hanging, warehouse-style floodlights, a small gaggle of techies milled about, browsing for gaming hardware, coding books, and electronic gadgets. It looked more like the hastily assembled vendor area at a low-budget comic book convention than a major big-box retailer. Yet there was something comforting in its comprehensiveness, its vast scale, and its total refusal to adapt its culture to non-tech audiences.
Fry’s stores have always embraced lavish, strange, location-specific theming — another trait likely borrowed from the grocery industry. According to the company’s now-defunct website, the Fremont store I visited has an “1893 World’s Fair theme” as “a flashback to the first city powered by electricity.” Fry’s Roseville, California, store honors “the influence of the California railroad with a train engine crashing through the wall and a full-size train replica on tracks in the store.” In Southern California, one store “takes you to Tahiti with sculpted lava tiki heads and its own rain forest.”
Fry’s huge stores, broad selection, and unique theming — much of it reflecting Valley culture, which has long embraced kitschy strangeness — served it well through the 1990s and early 2000s. The store expanded beyond California, opening locations in Texas, Arizona, and several other states. But the model worked less well in the age of e-commerce when huge brick-and-mortar stores became a costly liability instead of an asset.
Ironically for a store that specializes in computer parts, Fry’s was hopelessly late to the e-commerce world. Fry’s didn’t launch a website until 2006 (its competitor, Best Buy, launched its site in 1998), and even then it was buggy, slow, and hard to use. In 2017 the company partnered with Deliv to offer same-day delivery in Silicon Valley — a welcome service for the Bay Area’s engineers, who often need parts and components quickly, and who often find Amazon’s selection of professional components wanting.
But it was likely too little, too late. Fry’s remains a family-owned company, so its financials aren’t public. But even before the pandemic, insiders were growing concerned that the company was in trouble, plagued by its lackluster e-commerce presence and increasing tariffs on many electronic goods made in China. Covid-19 was probably the final nail in the coffin convincing Fry’s to close.
My final visit to a Fry’s Electronics store was in October of 2020, in the midst of the pandemic. During a heat wave in the Bay Area, my home’s air conditioner unexpectedly died. Realizing it would take weeks to have it repaired, I went shopping for a portable unit. Everything at Lowes and Home Depot was sold out. I ordered a Black and Decker unit on Amazon, but it said it would take several days to arrive, and my home was reaching 86 degrees at night.
So I turned to Fry’s. Sure enough, the company had air conditioners in stock. They cost $500, came from a relatively unknown Italian brand, and were designed to cool server closets rather than homes. But they were available and ready to pick up the same day. Once again, I made the trek down to Fremont. Fry’s had pivoted to selling Covid-19 products, like face masks and forehead thermometers. But otherwise, it had the same kitschy, weird vibe, the same Victorian theming, and the same clientele as it always had. I bought the AC, loaded it into my minivan, and had it cooling my home that afternoon. The unit I ordered on Amazon would get delayed in transit and would arrive about a week later. I ended up returning it.
It’s with some sadness, then, that I read about Fry’s closure. The store always felt like a pleasant throwback to some earlier era of Silicon Valley life, when property values weren’t so murderous, and denizens of the Valley spent their days puttering around aisles stocked with resistors and NAND gates, buying the components they’d need to build the next big thing in tech. It was also always comforting to know that when Amazon and its e-commerce ilk failed me, Fry’s would always be there, ready to sell me a graphics card or a phone system (or a frying pan or neck pillow) if I really needed it right now.
It’s not immediately clear what will happen with the Fry’s brand or its stores. The company’s statement says that it will “implement the shut down through an orderly wind-down process that it believes will be in the best interests of the Company, its creditors, and other stakeholders.” Whatever happens, with Fry’s closure the Valley loses one of its iconic, legacy brands — and a piece of its often bizarre, informal, kitschy culture, which started with places like the Homebrew Computer Club and remains strong today. For those in the Valley and the tech world beyond, Fry’s will be sorely missed.