Wegmans a Grocery Superstar

Training and presentation make N.Y. chain the gold standard

Published in CSP Daily News

ROCHESTER, N.Y. -- As well-respected grocery chains go, Wegmans Food Markets Inc. is near the top, according to a report in the Rochester Democrat and Chronicle. And the newspaper took a recent store opening this one in Mount Laurel, N.J. as an opportunity to outline just what makes the 70-store chain the gold standard for grocery shopping in the Northeast.

The Mount Laurel store is in an affluent southern New Jersey township across the Delaware River from Philadelphia. When the doors were unlocked at 7 a.m., about 800 people pushed shopping [image-nocss] carts into the superstore. The only thing missing was the mosh pit, according to the report.

"A Wegmans opening is like a rock concert," said Deric West, owner of the Honeoye Falls Market Place and Mendon Meadows Market Place grocery stores. Indeed, the day-long scene included wall-to-wall customers gawking at the wood-fired brick bread oven, the fresh seafood or the dazzling display at the Patisserie. And they come back again and again, to the tune of at least $1 million in sales a week per store.

Wegmans has become the gold standard for grocery shopping in the Northeast, experts say. "They are renowned throughout the industry as one of the most leading innovators in the retail business today," Robert Higgins, director of the Center of Food Marketing at St. Joseph's University in Philadelphia, told the newspaper. "They've set a standard of excellence that challenges conventional operators. The way they design their stores, the caliber of people they recruit and retain, the innovation they bring to the food system is truly unique and differentiated."

The Rochester, N.Y.-based company received 4,655 letters and e-mails last year from consumers in 46 states asking Wegmans to move into their towns, according to the report. But the company plans to stay the course in new markets while also replacing or expanding existing locations. That's a strategy that sits well with grocery industry experts.

"Their format is not only capital-intensive, it's people-intensive," said Neil Stern, partner of Chicago research firm McMillan/Doolittle. He specializes in the area of strategic planning and development of new retail concepts. "Literally, they can't train people fast enough. Even if they have access to capital, from a human resources standpoint, they can't grow any faster."

And that, Stern said, is a "fabulous strategy" for a privately held company such as Wegmans. "It doesn't work well for a public company, but it's fine for a private company where you only have to report to yourself."

Wegmans, which employs roughly 35,000 chainwide, always has carefully guarded its individual store sales figures, but some numbers have leaked through the industry. Jeff Metzger, publisher of Food World, calls a report of $675,000 in opening-day revenue at Sterling, Va., in 2004 "accurate." "I was told opening week, there was about $2.8 million," he said. "It's like P.T. Barnum got reincarnated."

Metzger said sales at the Hunt Valley store outside Baltimore averaged $2 million for the first several weeks the store was open, "which was incredible because they were not selling wine or beer." He added that the two northern Virginia stores were approaching $2 million a week in sales. Metzger expects the newest store in Mount Laurel to settle in at more than $1 million weekly.

One reason likely will be shoppers such as Linda Westad, who lives about 5 minutes from the newest store but who limited her opening-day shopping to buying just a few items before tiring of the wall-to-wall traffic in the aisles. So mostly she was dazzled. "The presentation is very amazing," she said. "What you see is just eye-popping. I would like to think I'll be going there at least once a week."

Westad is typical of the first-time Wegmans visitor, St. Joseph's Higgins said. They make shopping a true experience rather than the way most consumers feel in feedback to us: that it's a drudgery," he said. "If you look at marketing today, word-of-mouth is becoming almost the most powerful method of getting your message out to customers and once you've been in a Wegmans store, I've never known anyone to walk out of one saying they didn't like the experience."

Most industry experts expect Wegmans to continue to expand its shopping experience in the Philadelphia, Baltimore and Washington, D.C., markets over the next several years. The company has two more Philadelphia-area stores scheduled to open this year, has two more in the D.C. area, plus one in Harrisburg, Pa. Other growth is expected as well.

In the meantime, Wegmans will stay the course and concentrate on customer service. "The two stores they opened in northern Virginia they clearly could have opened before the busy holiday season (in 2003 and 2004)," Metzger said. "But they elected to do it their way, the proper way, with extended training and the focus on customer service. Neither store opened until a couple of months after the holidays. So absolutely, I think they are speaking the gospel in terms of how they operate."

And professor Higgins is ready to give Wegmans its final grade. "My report card on them is A-plus," he said.