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[14 comments]

Wegmans Grows Its Own Way

March 27, 2012

Wegmans, as everybody knows, is a different type of grocery chain. The company, which is regularly cited among the best employers in the country, also receives kudos for customer service as recently seen in its inclusion on the J.D. Power 2012 Customer Service Champions list.

So what makes Wegmans different than all others?

The family-owned chain is known for putting its people first. The company's training program is considered among the best in the grocery business. Managers are always on the lookout for special talent and allow it to thrive.

Maria Benjamin, as an example, was put in charge of her store's bakery after managers got a taste of her homemade Italian cookies.

"They let me bake whatever I want," Ms. Benjamin, told The Atlantic. "They're really down-to-earth, wonderful people."

The company also limits its growth with no more than three stores opening a year. That, it has determined, is how many it can open and maintain the standards it has set for itself and its employees.

"What some companies believe is that you can't grow and treat your people well," Mary Ellen Burris, a senior vice president, consumer affairs for Wegmans, told The Atlantic. "We've proven that you can grow and treat your people well."

Discussion Questions:

Discussion Questions: What do you see as Wegmans' competitive strengths? What are its weaknesses? Considering those factors, where do you see Wegmans expanding in the future?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Which chain in Wegmans' current markets provides it with the biggest competition?

Comments:

Wegmans' strengths start with the way they train and treat their employees, from overseas training in wine, cheese, etc, for department managers to scholarships for their young people. These also apply to the way they serve customers. The lesser publicized strengths are their demographic research to build in the right locations, solid supply chain,a strong Store Brands program, their health & wellness initiatives, in-store dining and the excitement for shoppers that a Wegmans trip brings. Those of us who have lived in Western New York will stop at a Wegmans wherever we find one.

I don't see a real weakness as long as they stay true to their commitments to slow growth, great employees and customer service. My sense of where Wegmans goes in the future is a slow spread of locations in the Northeast and Mid Atlantic areas supported by good logistics and strong people programs.

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J. Peter Deeb, Managing Partner, Deeb MacDonald & Associates, L.L.C.

First, Wegmans will probably keep adding a store here and there, slowly and methodically. After all, their site location specialist has been trained by the best. What makes Wegmans more competitive is they are more concerned with being competitive and not worried about what Wall Street thinks of them. They are more concerned about doing well over the next quarter of a century, rather than the next fiscal quarter. Sometimes I get the feeling they don't measure success in dollars and new store openings. They seem to measure success in market share, being considered a good place to shop and work, and making sport out of publicly held, sterile, plain vanilla grocery chains.

David Livingston, Principal, DJL Research

Wegmans' strength is that Wegmans is all that Wegmans should be in today's highly competitive marketplace: innovative, flexible, family oriented, ahead of the curve, appropriately flamboyant, considerate of its associates and acceptably contemporary.

If there is a weakness, it is being in the supermarket business in this era that seems to be moving toward more specialty food retailing.

The future of Wegmans lies in its resoluteness to remain being an ever-evolving Wegmans and not trying to be something else. As the world turns and current food business models become a little tire, the day could come when Wegmans would be considered tomorrow's best path to successful food retailing.

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Gene Hoffman, President/CEO, Corporate Strategies International

Wegmans has always been able to provide the best value to their shoppers, where that value includes not only competitive prices, but also great service and convenience. The secret seems to be the people who work at Wegmans, people that are valued, trained, and rewarded for exemplifying behaviors that support their customer-centric approach. This is not so unlike Costco, Wawa, Harris Teeter, and others who understand the importance of core values to a company's strategy and success.

It is great to see the success of companies who focus on core values and strive to maintain them in order to provide the best value to their shoppers. There are a lot of retailers who could benefit from understanding the "Wegmans Way" and applying it to their own enterprise, all in support of the customer experience and value.

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Verlin Youd, Principal, VPY LLC

Wegmans' greatest strength is their utter commitment to the highest quality food shopping experience for their customers. This commitment to quality is driven through all aspects of their business model -- people, product, and environment. Also admirable is the fact that they are so thoughtful in their growth, eschewing the "growth for growth's sake" that has crippled so many other once-successful retailers. They are in it for the long haul.

Bill Emerson, President, Emerson Advisors

They deliver value to their customers on product, price, and experience and they provide a great work environment for their associates. They also have a track record of innovation. They were pioneers in the early days of barcode scanning, as well as being early to recognize and capitalize on the market for prepared meals (consumer lifestyle changes).

The big knock on them over the years has been that they haven't grown fast enough. It is an interesting debate. There is certainly an argument to be made that their focus and investment on continually improving the model rather then growing fast has allowed them to maintain differentiation for decades, despite a shifting competitive landscape.

Hard to argue with their success.

Paul R. Schottmiller, Senior Vice President of Strategy, Retail and Consumer Goods, Merkle

Wegmans' attention to customer service taps into the consumers desire to get better service at a good price. I think you can put Wegmans in the same category as Costco or Nordstrom.

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Joe Nassour, Chief Technology Officer, RetailTactics

Wegmans' customer service and employee commitment are but two of their strengths. Add to that the strong, powerful word of mouth. Word of mouth actually will lower their advertising costs. Why spend money advertising when your customers will do it for you?

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

Good businesses aim to maintain the balance between making money and adding value to the customer experience. In Wegmans' case, they may be taking a hit on dollars by capping the number of stores they open each year.

But, in doing so, they've created a sort of "mom and pop" feel, where the whole offering, from the employees to the products sold, feels local, fresh, and friendly. And this will keep the customers coming in.

It's never a good idea to make decisions based solely on what will return the most revenue on your investment, and Wegmans is proof of that.

Ronnie Perchik, Founder/CEO, PromoAid

Strengths -- Sunday AM (early) in DC area -- no lines. Not because it is slow, but because they open a new cash register the minute a line forms. I think they value customers as much as employees. Plus the employees act like they are happy to see the customers. I will drive past two other stores for this level of service (not every week, but at least once a month!).

Weaknesses -- my willpower when I shop there. Too many good, interesting choices and my trust in the Wegmans brand!

Growth -- should be interesting. DC area suburbs are at ground zero for Wegmans meeting Harris Teeter with local niche player Fresh Market starting to show up as well. Plus established Giant and Safeway. Not sure where Wegmans goes next -- Harris Teeter in the Carolinas, PA, OH?

'Stanaggie'

Wegmans is a great place to shop -- quality products, strong merchandising, helpful employees, new products to sample, great delis and prepared food, chefs on site to help in meal planning. They remain grounded in their communities, listening to customers, experimenting with ideas and plan growth carefully. They may look further afield in the northeast, but will likely not want to stretch beyond areas they can fully service successfully, particularly in the fresh perimeter.

Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

Competitive strengths: innovative; quality; pride; customer care; commitment to community.

Weaknesses: scale (however, this is also a strength and has not hurt them in supplier relationships). No others I can cite.

Expansion: I truly wish they were coming to Wisconsin ... but their logical growth will take them deeper into the DC market.

Wegmans is an exemplary operator who can be imitated but likely never copied.

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Dave Wendland, Vice President, Hamacher Resource Group

Wegmans is very smart with the locations of their stores. They are well thought out, and put into higher income neighborhoods. Price is not the driving factor to support these stores, and Wegmans executes the perimeter as well as anybody in the country. They know what they're doing, and will continue to grow every year.

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Tony Orlando, Owner, Tony O's Supermarket & Catering

There is no question that Wegmen's competitive advantage is its people at all levels. That seems a well known fact and almost taken lightly. What makes their accomplishment significant is considering that their staffing levels are more than double an average superstore and more than six times that of a conventional supermarket per store.

I believe that their accomplishment in what they do is taken exceptionally lightly. It is phenomenal considering the numbers.

Growing store count at the pace they choose is extremely smart. Growth is not just store count. Growth is consistently improving same same store sales. Their measured process allows the reinvestment necessary to maintain innovation across all locations to ensure the consistent experience that has become their reputation.

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