Read the case-The Wegman's Way. What do you think is the key crucial factor that account for the Wegman's success? Would you suggest that other supermarkets should copy its way? Why?
The Wegman’s Way (adapted from Fortune):
SARA GOGGINS WORKS PART-TIME IN A GROCERY store. The blue-eyed 19-year-old attends college in upstate New York, aiming to teach high school history someday. Poor kid, slaving away at a thankless job for some faceless retail conglomerate. But her employer has a face--a ruddy, smiling one, topped with curly auburn hair--and it's right in front of Sara on this snowy mid-December day in the Rochester suburb of Penfield, N.Y., complimenting her on the display she has helped prepare in the store's French-inspired patisserie.
The face of Danny Wegman, president of Wegmans--the best company to work for in America--turns even redder when Sara whips out a picture she took of the two of them earlier this year, which she keeps behind the counter. "I love this place," she tells a visitor. "If teaching doesn't work out, I would so totally work at Wegmans."
Supermarkets aren't often thought of as desirable employers, what with low pay, grueling hours, annual turnover rates that can approach 100% for part-timers, and labor unrest such as last year's strike in California. Wegmans, however--along with the three other grocers on our Top 100 list--does things differently, including the way it deals with employees. The company has proved adept at battling the intractable problem facing grocery stores in this country--that there's no compelling reason to shop there anymore.
Privately held Wegmans--which had 2004 sales of $3.4 billion from 67 stores in New York, Pennsylvania, New Jersey, and Virginia--has long been a step ahead. Its former flagship store in Rochester, opened in 1930 by brothers John and Walter Wegman, featured café-style seating for 300. Walter's brilliant and pugnacious son Robert, who became president in 1950, added a slew of employee-friendly benefits such as profit-sharing and fully funded medical coverage. When asked recently why he did this, 86-year-old Robert leans forward and replies bluntly, "I was no different from them."
Each Wegmans store boasts a prodigious, pulchritudinous produce section, bountiful baked goods fresh from the oven, and a deftly displayed collection of some 500 cheeses. You'll also find a bookstore, child play centers, a dry cleaner, video rentals, a photo lab, international newspapers, a florist, a wine shop, a pharmacy, even an $850 espresso maker. "Going there is not just shopping, it's an event," says consultant Christopher Hoyt. In an annual survey of manufacturers conducted by consultancy Cannondale Associates, Wegmans bests all other retailers--even Wal-Mart and Target--in merchandising savvy. "Nobody does a better job," says Jeff Metzger, publisher of Food Trade News.
The smiles you receive from Wegmans employees are not the vacuous, rehearsed grins you get at big-box retailers. They are educated smiles, with vast stores of knowledge behind them, cultivated perhaps through company-sponsored trips to Napa Valley's Trinchero winery. After all, what good is it to offer 500 types of specialty cheeses if you can't explain the origin of each, what type of cracker to serve them on, even what wines they should be paired with? "If we don't show our customers what to do with our products, they won't buy them," says Danny Wegman. "It's our knowledge that can help the customer. So the first pump we have to prime is our own people."
More than half of Wegmans store managers began work there as teens. "When you're a 16-year-old kid, the last thing you want to do is wear a geeky shirt and work for a supermarket," says Edward McLaughlin, director of Cornell's Food Industry Management Program. But at Wegmans, "it's a badge of honor. You are not a geeky cashier. You are part of the social fabric."
A cashier making $5.93 an hour part of the social fabric? But it's true. Wegmans employees don't work in any old supermarket. They work at Wegmans, and there's cachet attached to that. You're a culinary whiz, an ambassador of fine cuisine--even if you only stock shelves at night. "Just about everybody in the store has some genuine interest in food," says Jeff Burris, who runs the wine shop at Wegmans' Dulles, Va., store. In fact, Wegmans has been known to reject perfectly capable job candidates who lack a passion for it.
Not all Wegmans cashiers are food connoisseurs, but a common denominator of passionate customer service sets Wegmans workers apart from those at other retailers. Simply put, no customer is allowed to leave unhappy. To ensure that, employees are encouraged to do just about anything, on the spot, without consulting a higher-up. One day it could mean sending a chef to a customer's home to clear up a botched food order. It could also mean cooking a family's Thanksgiving turkey, right in the store, because the one Mom bought was too big for her oven. Is that expensive? Sure. Is it worth it? You bet. A Gallup survey found that over a one-month period, shoppers who were emotionally connected to a supermarket spent 46% more than shoppers who were satisfied but lacked an emotional bond with the store.
Empowering employees goes beyond making house calls, though--it also means creating an environment where they can shine, unburdened by hierarchies. Kelly Schoeneck, a store manager, recalls the time a few years back when her supervisor asked her to analyze a competitor's shopper- loyalty program. She assumed her boss would take credit for her work. But no: Schoeneck wound up presenting her findings directly to Robert Wegman.
The Wegmans culture flows from the top: from Robert, Danny, and his two daughters, SVP of merchandising Colleen (33 and the likely heir) and 30-year-old group manager Nicole. But there is no shortage of folks to act as cultural conduits for new hires as the chain expands beyond its Rochester roots. (The company's expansion is slow and methodical: It generally opens only two new stores a year. In 2005, one is opening in Fairfax, Va., and one in Hunt Valley, Md.) The new stores may be tougher for the family to keep tabs on. But the Wegmans culture "is bigger than Danny in the same way that Wal-Mart's became bigger than Sam [Walton]," says Bain & Co.'s Rigby.
When asked what makes Wegmans tick, Pawlowski, now a vice president, replies, "We're taking customers to a place they have not been before." And once they arrive, shoppers often don't want to leave. Longtime customer Toni Gartner, 61, is spending the winter in Florida for the first time. But all things being equal, she'd rather be back in frigid Buffalo. "I am trying to get used to Publix," she says. "I understand that Publix is rated highly. Maybe--but it ain't Wegmans."