Danny Wegman is chairman and CEO of one of the most successful family-owned grocery store chains in the country. Founded by his grandfather Walter Wegman in Rochester in 1916, Wegmans now has 81 stores in six states. The company regularly ranks at the top of Fortune’s “100 Best Places to Work For,” and has been named the best grocery store chain in the country by Consumer Reports.
Q: Wegmans looks to hire people who are innately helpful and caring. Why is that the most important quality?
A: We don’t think you can teach caring. You can teach anything else. What we try and do is identify whether you’re caring or not and there are even new tools that came out that help you figure those things out, new software. The hiring process is where you have to begin this whole journey.
Q: It seems like everyone sells groceries now – Target, Walgreens, etc. How is that squeeze affecting Wegmans?
A: Well, there are certain things we believe in doing that we think are very important to people. We think eating fruits and vegetables is important to people and so we try and concentrate on things that we think are most important and maybe if we concentrate on them a lot, then we can do a better job than somebody else... Hopefully we can take an area like produce and do a better job than anyone else on those areas and hopefully those are really important to people. The other thing we’re trying to do is trying to cook more vegetables in the stores. I don’t think Target is going to do a lot of cooking in their stores, nothing against Target, by the way, but that’s our strategy to do things that customers want that we can do that our competitors can’t do and hopefully our customers will come to us because of those things.
Q: The market is kind of fractured with high-end gourmet at some stores and then deep-discounts at other stores. How do you compete with that under one roof?
A: Our stores do very high volume per store. They’re almost like little villages, so that’s how it all works. I’ll give you an example: if you’ve got someone selling cheese and they’ve got five customers an hour or if they’ve got 50 customers an hour it makes an enormous difference. The (relative) cost of your salary is a lot less, so frankly we can pay the cheese person more and we can still afford the cheese person.
Q: Wegmans always seeks out well-educated demographics in store locations. Why?
A: Our goal for food is to offer really great-tasting food that in the end is healthier. We sell food. We think that’s our responsibility. In most situations, there’s a change process that takes place. You’ve got folks who are innovators and early adopters and so on down the line. And frankly, when it comes to food, the innovators are better educated, they think more about health and we think that everyone will be there eventually. If we don’t serve communities where there are better educated folks, it takes longer to get to our point of view and we’re not even sure we can get there. I guess that’s our process for change. It’s nothing against anyone. We have a lot of customers that aren’t as educated and we think we do a good job for them, too. But we try and put our stores where people will pick up more in produce, maybe less meat. We sell a lot of meat, we have I think a great meat program, but we don’t think it’s as good for the environment. We think people should eat less meat for the environment, but that’s why we do what we do. We have a vision as to where we think things should go for the environment, for sustainability, for health and so we try and say, “How do we tend to make this vision take place?”
Q: I’m sure it tends to line up with demand, anyway?
A: Eventually. But it lines up first with better educated folks. They get it. They know what we’re trying to do. We have the whole “Love your veggies” with the little heart. We don’t go around preaching “eat healthy” but people know we’re nudging them. So we try to do it in a way that’s fun.
Q: Do you have any expansions planned for Buffalo?
A: We’re looking to remodel our Transit Road store right now. So that will be the next big endeavor.
Q: How far do you see Wegmans expanding overall?
A: Our basic strategy is to grow every store in every market. To make improvements in every store... Our objective is not to be an extremely large retailer. Who knows how big we’ll get, but our objective is not to be national. I would say our objective is not just to maximize our profits, it’s to help our customers be healthier.
Q: Tops has a new Orchard Fresh chain they’re launching, Trader Joe’s is coming, Whole Foods has been looking around. What do you think about that?
A: I think it’s good for the market if that happens... I can’t say we’re particularly happy about it, but on the other hand, it’s inevitable. Each one of these is different. There are similarities, but there are a lot of differences between Trader Joe’s and Whole Foods for example. But competition in the end is good. You find out things customers want and you have to be good at doing it.
Q: It almost seems like Wegmans can do no wrong. You’re always the best place to work and number one on this list and that list. How do you do it?
A: Well, we can do a lot of wrong and we work very hard to correct things when they do go wrong, so that’s number one. But number two, I think our basic philosophy is to do what is right and what our people feel is right, and to never ask our folks to do anything that isn’t in their heart... I wonder about the same thing. Things go well and people say nice things and feel-good things, and you wonder how that’s all happening, and you just be humble and say, “Let’s keep working hard to treat each other right and treat our customers right and keep your fingers crossed.” I don’t know what else to say.