Niemann Foods’ Secret to Success

Discussion
Oct 18, 2004
George Anderson

By George Anderson

Ask members of the Neimann family, founders of the Niemann Foods supermarket chain, what the secrets are to their company’s success and they’re likely to tell you it’s a willingness
to change and a belief in having employees take ownership, literally and figuratively, for their actions in support of the company’s goals.

Chris Niemann, executive vice president and chief financial officer of the company, told the News-Gazette that being able to adapt has helped the retailer grow from operating
one store in the 1980’s to running 63 supermarkets, convenience stores and liquor stores today.

“You have to be willing to change,” he added. “We’ve seen a lot of other independent retailers that have not been willing to change, who are not in business anymore.”

Niemann Foods currently operates 21 Save-A-Lot limited assortment units, 29 other grocery stores under various banners, 11 convenience stores and two discount liquor stores.

A key to the company’s growth has been the performance of its employees. Back in the mid-1990s, Niemann Foods became an employee-owned business. The Niemann family retains two-thirds
ownership of the company and the balance is owned by approximately one-third of its 3,500 person workforce.

The company’s chairman Rich Niemann Sr. said, “The more mature-thinking people very much recognize they are a part of the company, and if there is a profit or loss, ‘it’s going
to affect me.'”

“We try to take care of our associates, take care of our customers and have fun doing it,” said Rich Niemann Jr., the company’s president. “If we do that, we’re going to do all
right.”

Company success, however, goes beyond mere store count, he said. “We want to grow enough for people to want to be a part of us, and we need the strength and size to compete,
but growth in terms of just adding stores doesn’t make sense.”

Moderator’s Comments: Do employee-owned retailers have an advantage over competitors that are not employee-owned?

An interesting fact brought up in the News-Gazette piece was Niemann Foods’ strategy of operating both the limited assortment Save-A-Lot stores as
well as more upscale County Markets.

“The two concepts help to spread the risk for all our associate/owners,” said Rich Niemann Jr.
George Anderson – Moderator

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