That actually sounds a lot like a store we used to have out here called Gemco. In fact, the one I had near me was actually replaced by a Target in that same location after Gemco went under. I don't think anybody had yet heard of Target, so that was interesting. And, yeah, Gemco had music too. I remember seeing Y&T cassettes there, but can't remember if I actually bought any. I got most or all of them from The Wherehouse.
I remember Gemco and Fedco (wasn't it the case for a while that only persons with certain jobs could become "members" of Fedco?)....and Service Merchandise and Best Products. Going back even further, I remember Zody's and Kress (although both of those were gone before I was a teenager. I probably failed to put shopping carts int he corrals at all of those places! Mwahahahahaha!
I vaguely remember Fedco. There was a building literally across the street from the Gemco I mentioned that started as a Service Merchandise and then was taken over by Best. The first company I was aware of that had that model of using a catalog to order at the counter and they would bring you your stuff was Consumers (I forget their whole name). Back when Kenner launched the first 12 Star Wars action figures (after the first four were only available through the Early Bird pack, which I had), my great grandmother would take me to Consumers every time I managed to save up my $2.15 to buy another action figure. I got 11 of the first twelve. Never did find that Sandpeople figure. And I had the cloth robed Jawa, not the original vinyl one. (the cloth one looked a LOT better, but the other one was worth more since it was more rare) Anyhow...
Never heard of Zody's and Kress. Maybe they didn't have them up here.
Not to get off track, but do you still have any of that original Star Wars merch?
Zody's was Socal based, and there were stores in CA, NV, AZ and NM (as well as Michigan after a bad acquisition). There was a Kress in Berkeley, but I think most/all Zody's and Kress stores were gone by the early 80s.
Here in New England it was Woolworth's, Caldor and Service Merchandise. There was a Sears, but that was classy, and Kresge's, which became Kmart (and now actually Kmart and Sears are co-owned) but the big three (at least where I was) was Woolworth's, Caldor and Service Merchandise.
I remember a lot of the commercials for K-Tel compilation albums would have tags that talked about them being available at Woolworth and Woolco stores.
At some point in the mid/late-80s, I bought a semi-auto rifle (a Ruger Mini-14) at Service Merchandise. My how times have changed.