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Monday, November 2, 2009

Human face of Dirt Cheap moves on — as competitor

By Phil O'Connor
Monday, Nov. 02 2009
His family's legacy in the St. Louis business community traces back to 1812,
when his great-great-grandfather founded a pretzel shop near what is now the
south leg of the Gateway Arch.

But it was his television appearances, often alongside an oversized furry
yellow chicken that chirped "Cheap, cheap, fun, fun," for which Fred Teutenberg
may be best known. Those corny TV spots, regularly laced with low-brow humor,
made Dirt Cheap discount liquor and cigarette stores a hit, both as a business
and as a recognizable brand across the metro area.

Now the man, who not long ago was reminding viewers that "the more she drinks,
the better you look," has moved on. After spending the last 16 years helping
establish Dirt Cheap and nurturing its growth to 14 stores, Teutenberg is
starting a new line of liquor stores under a new name.

While he's excited about his new venture, Teutenberg declined to discuss how he
feels about competing against the company he helped build. Nor does he care to
discuss his departure from Dirt Cheap, including reports that he was forced

"No use going into the nitty-gritty, but we had a parting of the ways," said
Teutenberg, who was the company's president.

Dirt Cheap is controlled by members of the Paul Taylor family. Taylor founded
U-Gas, which operates 15 gas and convenience stores in the St. Louis area.
Through an attorney, company officials declined comment about Teutenberg and
his plans. In fact, both sides signed a legal agreement that prohibits them
from discussing the split.

Already, it's clear Teutenberg won't stray too far from the strategy that made
Dirt Cheap such a success. The name — Fred's Cheapo Depot — is the first
giveaway. The stores also will carry many of the same product lines as Dirt

But there will be some changes. The Cheapo Depot stores will have a retro
atmosphere that harken back to a time when, as Teutenberg describes it, "people
were more comfortable drinking and smoking in public and not so politically

Competitors, friends and family describe Teutenberg as a kind-hearted
workaholic with a passion for his customers. At 70 years old, he has no
intention of retiring.

Instead, he is busy working on two new stores he hopes to open by the end of
the year. One store will be in downtown St. Louis, the other in South County.

"It's starting from scratch," said Stacey Page, a former Dirt Cheap employee
who is vice president and chief financial officer of the new stores. "But
there's a lot of people who care about Fred and want him to be successful."

Teutenberg says he's ready for the challenge. And besides, it's not the first
time he has had to start over.


For five generations, the Teutenbergs operated several well-known bakeries and
restaurants in the area, making it at one time the oldest continually operating
business in the Midwest.

But with creditors closing in, it was Fred Teutenberg who made the decision to
close the last of the restaurants in 1991.

"It was no longer economically viable," he said. "We couldn't go on."

The family sold their home in Ladue and moved to a smaller house in Clayton.
"It's fair to say we struggled," he said.

Teutenberg's wife of 42 years recalled the months after the restaurants closed
as an introspective period for her husband. "It was time when he figured out he
wanted to go in a new direction," Janet Teutenberg said.

About that time, cigarette outlet shops were opening across the country that
took advantage of tax variances among neighboring jurisdictions to sell their
products at a lower price.

Teutenberg went into business with Taylor, a friend he had been classmates with
in high school and college. The first Dirt Cheap store opened in January 1993
in a strip shopping center that Taylor's mother owned at Highway 30 and Valley
Dell Drive in Fenton. They hoped Jefferson County's lower cigarette taxes would
lure customers from St. Louis County seeking cheaper alternatives.

The second and third stores opened later that year at Telegraph and Forder
roads, and at Dunn and Bellefontaine roads, locations aimed at drawing Illinois
buyers. Buying in bulk, selling at a discount and operating on thinner margins,
the business took off. Then came the television spots.

Teutenberg offered customers "the last refuge for the persecuted smoker." His
reminder to "be careful out there" became a staple. The chicken arrived when
the store needed a logo for its own line of beer.

"We struck some kind of chord," Teutenberg said.

Haim Mano, an associate professor of marketing at the University of
Missouri-St. Louis, said he often discusses the Dirt Cheap ads in classes.
Despite their low-value production, the ads effectively use humor to draw in
viewers and boost brand awareness.

"The fact that they've been going on for so many years, and we talk about them
and love to watch them even though we hate them, means they're doing something
right," Mano said.

A television commercial for Teutenberg's new stores — minus some of the
trademark lines of the previous ads but featuring a cartoon version of
Teutenberg — began running earlier this month. On the new store's website,
Teutenberg wrote, "We have ditched the pesky chicken and the big company
bureaucracy and left them behind."


Friends and business associates say Teutenberg's common-man approach isn't just
a marketing ploy.

Teutenberg grew up in Webster Groves and attended public schools before
graduating from Washington University. Despite their success, his parents were
frugal, influenced by the Depression and World War II, a trait they passed on
to their son, according to his wife.

From his father, Teutenberg said he learned to work hard, not waste money, be
diligent and treat everyone fairly. But he said one lesson didn't stick.

"He always said, 'You have your business so you can live, you don't live so you
can have your business,'" Teutenberg said. "He might accuse me of living too
much for my business. But I think he would be proud of me."

Along the way, Teutenberg said he has learned that karma and luck have as much
to do with success as anything. "I know people in business who worked hard and
were successful and other people who worked just as hard and weren't. Working
hard, per se, doesn't guarantee it."

The couple, who have four grown children, now live in a modest-size brick house
with an American flag out front on a quiet street in Brentwood. Teutenberg
drives a 4-year-old Jeep Cherokee. He has no real hobbies, belongs to no
country clubs. He sleeps only a few hours a night, smokes a pack and half of
Kent Lights a day, and relaxes with Beefeaters gin and a good book.

He wears rumpled, off-the-rack suits and rarely dons a tie.

"It's who he is," said Jon Rand, president of Discount Smoke Shops. "Fred could
afford as nice a suit as anybody, but that's not his image. He'll wear a suit
every day, but it's a common man's suit, isn't it?"


If Teutenberg ever had any guilt about not passing the family restaurant
business on to his children, it has been alleviated.

Three years ago, his youngest daughter put the family name on a restaurant she
opened with the help of relatives at Seventh and Olive streets. Joanne
Teutenberg, 26, believes her father always had regrets about leaving the
restaurant business even though it opened up other opportunities for him.

"I think it was nice for him to be able to reconnect with that when we reopened
down here," she said.

Taking a break at a table in the restaurant's smoking section last week,
Teutenberg was asked to reflect on his family's legacy and his place in it. He
doesn't worry that he might one day be best remembered for his corny

"I don't think about that kind of stuff at all," he said in his smoke-cured
voice. "That stuff's for presidents."

His competitor, Rand, suggested what he considered a most appropriate epitaph —
Fred Teutenberg: "He loved his customers."

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