Inside This Issue - Opinion
Regional supers stand out
November 28th, 2011
by David Pinto, Editor
As a group, the most effective and exciting retailers in America today are the nation’s regional supermarket chains. Name the retailer — Publix, H-E-B, Wegmans, Stater Bros., Hy-Vee, Weiss Markets — and a group of similarities emerges.
Each dominates its market, though each competes with a larger and potentially more powerful grocery retailer. Each has geared its merchandise and service package to its local residents, to a degree no national food chain even comes close to duplicating. Each is intimately involved in its community, supporting local civic and charitable events and participating in community activities, a claim its larger competitors often make but seldom live up to.
Perhaps most telling, and most interesting, each successful regional supermarket retailer is different from the others, as the individual markets they serve are different from each other.
So it is that H-E-B dominates in its Texas communities by offering, in addition to standard supermarket fare in a conventional supermarket setting, a variety of ethnic merchandise and an array of store formats and a range of in-store services no competitor is able to match.
Wegmans provides its customers with an eye-catching range of merchandise, food and nonfood, that local residents had never been exposed to before the food chain’s arrival.
Stater Bros. both represents and dominates the region of Southern California that has become known as the Inland Empire, a geography, with San Bernardino at its center, that touches San Diego to the south and extends almost to Los Angeles 50 miles to the west.
Then there’s Hy-Vee. Name the city or town in its trading area — one that stretches from its headquarters city of West Des Moines, Iowa, into Illinois, Kansas, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin — and Hy-Vee is the dominant food retailer. More than that, it has, inexplicably but justly, earned a reputation as the local retailer, even in regions where more-local grocery chains exist.
Perhaps most noteworthy about each of these grocery retailers — and others not specifically indicated here — is the relationship between the companies and their employees. Some of these food chains claim dominant leaders — Hy-Vee’s Rick Jurgens and Stater Bros.’ Jack Brown come readily to mind — CEOs who have rightly earned a reputation for strong internal leadership and aggressive community involvement. The CEOs at other regionals prefer to remain in the background, motivated to do so either by a natural reticence or the belief that the employees rightly deserve the spotlight.
No matter. In either case, the employees do get the spotlight — and the credit for the success their companies have earned. Spend a couple of hours touring Stater Bros.’ state-of-the-art distribution center in San Bernardino with Brown and the one impression that remains is not of the DC’s technological marvels but of the rapport between the retailer’s CEO and the DC’s employees. Even the lowliest picker treats Brown as an equal — because he is.
Equally impressive, observe Brown greeting a new Stater Bros. employee. Learning that the person introducing himself is Jack Brown, the new hire can only say, “Wow!” Not coincidentally, that’s Brown’s reaction as well.
Or visit the Hy-Vee offices in West Des Moines and tell the receptionist you’re here to see Rick Jurgens. After she invites you to take a seat while she calls Jurgens’ office, she’ll inform you, "Rick will see you whenever you’re ready."
You ascend to the executive floor and, while you wait, all manner of staffers come by to ask if you’re comfortable, if you need a cup of coffee, if you need anything at all. When Jurgens appears, he’s almost an afterthought. The employees have already made you feel welcome.
Questions may well be asked about why the success regional supermarket retailers have enjoyed has not been easily translated to other retailing segments. There are no easy answers. Perhaps the only answer is the obvious one: Food is a major magnet in any community. Drug and general merchandise retailers, on the other hand, are less critical.
At any rate, this issue of MMR profiles two of the very best of the regional grocery retailers: H-E-B and Stater Bros. Other regional retailers have been profiled in these pages in the past. Others will be covered in future issues. What emerges, simply put, are snapshots of the very best that American retailing has to offer: Companies that are inextricably tied to their communities and, as a result of that bond, have made both the retailers and the communities they serve more relevant, more vibrant and more important.