Investing in communities as part of a “virtuous cycle”

GRAND RAPIDS, Mich. — Meijer Inc.’s guiding philosophy is the “virtuous cycle,” meaning it turns growth and profitability into community investments. Its communities in turn thrive and boost business at Meijer, perpetuating the cycle.

“When we invest in our communities and customers and give them popular offerings, whether digital shopping or locally produced items or great stores and formats, they reward us with their business and the cycle goes on,” says Meijer president and chief executive officer Rick Keyes. “So, it’s very important to be a healthy company. If you want to help others, you have to be healthy yourself.”

The challenge of remaining healthy — for businesses and consumers — has, of course, never been greater. With the hopes for an end to COVID-19 dashed by the Delta and Omicron variants, Meijer has had to cope with supply chain challenges, as well as the ongoing need for vaccinations. It has met those challenges — along with other retailers — with a Herculean effort to administer vaccines and stay in stock on groceries, O-T-Cs and personal protective equipment. And its vaccination effort has continued with booster shots. For all its successful efforts in maintaining the “virtuous cycle,” Meijer has been named the inaugural MMR Regional Retailer of the Year.

“Helping to heal the country was pretty incredible,” says Keyes, who is also immediate past chairman of the National Association of Chain Drug Stores.

“This is something that we worked on pretty heavily in 2020,” he says, “to have retail pharmacy — food, mass, drug, everybody — participate in. I think we would have never been able to get the vaccination rate that we did without that.”

The impact of COVID on the workforce was another huge concern that has continued with hiring challenges. “We’re really proud of our team and how we have navigated the pandemic to make sure that we’re taking care of our customers,” says Keyes.

When it came to providing vaccines, the retailer’s workforce performed at its peak. The company moved fast to open up in-store clinics, which at their busiest were administering close to 2,000 shots a day. Meijer also created mobile teams with pharmacists and technicians. People could schedule appointments for vaccinations through an online system “that really we think was best in class, that allowed customers to sign up easily, get their date reminders, and made everything very easy,” says Keyes.

And the company takes pride in being one of the only private partners outside of health systems selected by the Federal Emergency Management Agency for inoculations, which led to a Meijer vaccine offering at Ford Field, home of the Detroit Lions. More than 300,000 people were vaccinated at Ford Field, many of them from underserved communities.

Creative efforts by Meijer to promote vaccinations extended to coupons, like the $10 incentive coupons for students who got shots to meet campus mandates. “We wanted to make sure that that was easy and accessible for them as we have a lot of stores just off college campuses,” comments Keyes.

The upshot is that through late last year Meijer had administered an estimated 2.6 million vaccinations and boosters and has “a lot to be proud of,” he avers.

To overcome supply chain wrinkles, Meijer has worked closely with vendor partners who Keyes says have been very supportive. “They’re frustrated as well and want to be able to supply product. But the global problems have created some additional curve balls to work through.”

The retailer’s overall response to the crisis has brought its community support to new heights, he adds. “We’ve doubled down. There’s so much need out there. And partnering and figuring out how we can deal with COVID has led to us giving back in many different ways, whether it’s hunger relief, or the work that we’re doing around diversity and equity and inclusion, or for the long term, sustainability. Overall, we’ve been very purpose driven.”

The company has also focused on innovation, especially when it comes to accelerating digital capabilities. For home delivery it has partnered with Shipt, Instacart and DoorDash, while seeing “incredible growth” in the usage of its own “order online, pick up in store” offering.

The pre-pandemic Shop & Scan service is another added convenience.

“We were just looking for ways to make things easier for our customers,” Keyes points out. “We have big stores, and we do a lot of volume in each one, and we want to give our customers as many shopping options as we can.”

Initial concerns about shrink with Shop & Scan notwithstanding, the technology has been “a huge success,” he adds. “We worked pretty hard to make it a very seamless transaction. We do it via mobile devices. Customers can download our app. We don’t have the hardware [scanners] that you have to take around with you” like at other retailers. “So, it’s very convenient for our customers. I know my wife uses it religiously. And whether you’ve got 10 items in your basket or you have 100, it puts the control in the hands of the customer, making checkout extremely easy.”

A short verification process ensures accuracy, he adds, noting that usage is up “pretty dramatically” since the 2019 launch. “And we think that’s only going to grow.”

While advancing its digital offerings, Meijer has hardly neglected its brick-and-mortar operations. Notably, it has continued to open small-format neighborhood markets, which serve grocery customers with much smaller stores than its typical 190,000-square-foot supercenters. The 38,000- to 40,000-square-foot small-format market offers a vast assortment of fresh and prepared food, including bakery items, fresh meat offerings, and Meijer and national brand products at affordable prices.

Besides committing to low prices, the small formats reflect their communities with locally made goods. “We have over 2,000 local items in each of these stores that are tied directly to that neighborhood, which is really helping minority-owned businesses that are starting up in these communities,” Keyes says.

The fourth small-format store, Rivertown Market, opened on Jefferson Avenue in Detroit in October 2021 and has been a “huge success.” Meeting the needs of an underserved population, overall, it is the retailer’s third store in the city and first downtown.

The new year will bring a format that’s in between the neighborhood market and supercenter. Two of these stores, which are in the 80,000-square-foot range, are slated to open by year-end. The midsize format can be erected on a plot half the size of the 30 acres typically required for a supercenter. “This allows us to densify some of our key markets, and we’re really excited about that,” remarks Keyes. The units will have some essential general merchandise, as well as drug store products, but will focus on groceries.

Another part of the retailer’s growth story has been its fuel business, with gas pumps typically accompanying its supercenters. But, in October, a freestanding gas station debuted for convenient, easy access, and the company is enthused about the prospects for more such openings.

Regardless of format, Meijer will maintain its commitment to offering products from local suppliers. It sources produce from more than 200 Midwestern growers, particularly asparagus and apple farmers in Michigan.

“We have great relationships with them,” Keyes says, noting that with last year’s bumper crop the chain sold 1.5 million pounds of local asparagus. “And we’re always looking for more.”

Supporting Michigan farmers, of course, exemplifies the virtuous cycle, as does a new initiative last year named Meijer Team Gives that engaged its store and distribution facility team members to help choose local nonprofits for donations totaling nearly $3 million. With team members being a crucial part of the cycle, “we wanted to invite them to play a larger role in our giving culture,” Keyes says.

Team members in Michigan, Ohio, Indiana, Illinois, Kentucky and Wisconsin formed a diverse committee at each store and distribution facility to nominate a local nonprofit organization or two for consideration of the fall donation. Each unit could award one local nonprofit $10,000 or two nonprofits $5,000 apiece.

Last year also brought the return of the Meijer LPGA Classic for Simply Give, which the pandemic cancelled in 2020. Refusing to back a golf tournament sheerly for entertainment value, the company made the event a fundraiser for hunger relief. Proceeds benefit the retailer’s Simply Give program, which supports local food pantries across the Midwest.

The tournament has raised more than $7.5 million since 2014 and, in lieu of the event in 2020, Meijer matched its contribution from the year before. The 2021 tournament set an attendance record, and the retailer donated more than $1.1 million thanks to continued community support.