Wegmans: A Company to Excel

Ethics of Business

Centenary College

October 13, 2013

WEGMANS A COMPANY TO EXCEL
The Wegmans grocery store chain started its history with two brothers, but today has over 36,000 employees with a genuine commitment to each of them. (Hoovers, 2013) John Wegman first started in the grocery business by opening Rochester Fruit and Vegetable Company in 1916. (History, 2013) The corporate headquarters is still located in Rochester, NY where the company started. (Snapshot, 2013) In 1921, the bothers John and Walter Wegman purchased the Seel Grocery Company. After acquiring the store the brothers introduced bakery and general items to the sales floor. Nine years later in 1930 the name changed to Wegmans and a 20,000 square-foot store with a cafeteria was opened. In 1931 John and Walter Wegman incorporate Wegmans, but the company still remains privately owned. (History, 2013)
Wegmans has a history of quickly adapting to technology. The co-chairman Robert Wegman was part of the industry committee that created UPC labels and in 1974 Wegmans started to use bar-codes before most competitors. In 1990 electronic discounts and coupons were initiated. (Facts, 2013)
Wegmans has grown substantially since its inception in 1916. The company is located in the northeast of American and has eight-three stores in six states. (Store Locator, 2013) Wegmans is a privately held company which Hoovers estimates the annual revenue exceeded 6.6 billion dollars in 2012. (Hoovers, 2013) Wegmans believes they should provide their customers with their best effort every day. To do this, Wegmans has pledged, “At Wegmans, we believe that good people, working toward a common goal, can accomplish anything they set out to do” and “We also believe that we can achieve our goal only if we fulfill the needs of our own people. To our customers and our people we pledge continuous improvement, and we make the commitment: “Every Day You Get Our Best”. With this deep commitment to their customers and employees, no wonder Wegmans has been in the Fortune Top 100 Best Companies to Work For sixteen year consecutively. (Top 100, 2013) Wegmans has the lowest hiring needs compared to most companies in their industry. The average grocer has turnover rates approaching 100% for part time employees, but Wegmans turnover is only seven percent for part-time employees. (Martin, 2011). Turnover for full-time employees is 19% for most supermarkets, but Wegmans is only six percent. (Boyle, 2005) Wegmans opens two to three stores annually with each new store requiring 550 new employees. Each store hires 150 full-time and 400 part-time positions. (Miller, 2007) (FAQ, 2013) Due to low turnover, Wegmans needs to only hire approximately 2,520 replacement employees next year costing $9.1 million dollars and an additional 1,100 new employees assuming only two new stores are opened. Wegmans does not have a specific diversity plan other than to inspire their employees to think of what is right. Dan Wegman was quoted in 2005 “We define diversity as equal success and opportunity for all Wegmans people, regardless of race or gender or religion,", "The common ground we all share is diversity of thought. That's what's most important to us at Wegmans.” "Our whole business philosophy is based on a different way of thinking. We respect people who think differently, and we encourage those who, when everyone in the room says it's black, aren't afraid to say it's blue. At the end of the day we have to be in agreement, but we want people who are confident enough to express their own opinion. For that to happen, you have to have a feeling within a company that different thoughts, and different ways of doing things, are good, not bad." In 2005 turnover for disadvantage employees was 15%. If the philosophy of diversity as stated by Dan Wegman the CEO, no wonder the company has such low turnover with disadvantaged employees. Unemployment is now on average seven percent for part time employees which is a remarkable reduction from the 33.5% it was in 2005. To further encourage diversity, name tags are in English and the employee’s native language. (Springer, 2006)
Wegmans has a high standard of customer service and requires respect when dealing with all its customers. Respect and high standards are how Wegmans maintains customers. Many of the job opportunities require the same level of skill however many positions are specialized and require additional skills to function. Wegmans has a host of specialties including meat cutters, bakers, sales clerks, cashiers, front end clerks, seafood department and more. When one thinks of a job in a supermarket, the immediate thought is long hours at the checkout counter. Because of the vast diversity of products and food offerings provided by Wegmans, there are many job opportunities beyond what is offered at a traditional grocery store. Wegmans also has jobs that are available in specific focuses such as IT, marketing, stock control, store security, construction and maintenance, and numerous other support functions. For this project however we will focus on in store critical skills.
A front end cashier position requires a number of specific skills such communication, organization, teamwork and commitment. Training is an ongoing experience with Wegmans and it is encourage that all employees take advantage of the numerous training programs. Customer service and communication skills are a requirement. These skills consists of greeting and engaging customers, answering questions in and upbeat and friendly manner, proactively assist in providing information and recommendations., direct eye contact and smiling are necessary to create a rapport with the customers. Organizational skills are a requirement to ensure a cashier can prioritizing requests and department activities while managing interruptions and attending to details to complete tasks within deadlines. The associate will need to be able to easily assist customers in locating products by understanding and familiarizing themselves with the store layout and solving problems quickly.
Proficient reading, writing and oral skills are necessary to be able to differentiate flyers and promotions, complete forms such as rain checks or credit card payments. The associate will need to fill out daily cash out sheets. The ability to anticipate, analyze, and identifying problems while responding quickly when situations arise and prevent problems when possible.
Teamwork and commitment are essential as well as diversity awareness. All associates need to capacity to listen to others’ points of view and recognize and appreciative differences while maintaining open lines of communication with team members.
Decision making skills are necessary to assist if a customer is purchasing a product that requires identification such as wine or cigarettes, the cashier would need to know when and how to ask for that information. If they are accepting personal checks, they must ensure they are meeting company guidelines. They need the knowledge and ability to decide who to contact if the cash register malfunctions or the item is not scanning correctly.
For many people, their first introduction to Wegmans as an employer is on their corporate website. In bold letters are the words, “Want a job you’ll love?” and there is a collage of people where you can find links to things that will tell you: * What makes working here different? * New store opportunities. * The fact they are on Forbes Top 100 Companies to Work for since 1998 * What you can expect * Benefits * Career advancement
From the very beginning, the company provides you with information that many other companies do not reveal until a person is almost hired. Wegmans is open and upfront about what they can offer a potential employee which contributes to their retention rate. There should be no surprises for new employees.
Wegmans has a long history of retaining employees due to their simple and powerful philosophy, “Employees First, Customers Second”. Wegmans is so successful using this philosophy that their employee turnover is half of the industry standard. Wegmans proudly reports employee turnover rate is at eight percent. They use traditional methods of retaining employees including competitive pay, comprehensive benefits, training, and they take it a step further. Wegmans utilizes perks such as flexible work schedules, management autonomy, solid communication, investing in employee relationships and training.
Ann Koonz, Meat Manager at the Wegmans in Mechanicsville, PA is a twelve year veteran at the company. Ms. Koonz says she attributes her long time employment with the training and treatment she has received since starting with the company. Her first role was as a meat wrapper and her management encouraged her to take the training necessary to move up in her role. She states that the company is “concerned about what people do and how they do it”. She also says the company not only truly cares about its employees, who come first, but the shoppers too. It is a totally different environment than a previous grocery chain she worked for and she loves her job. (CNNMoney, 2008)
Wegmans is a regional company in the United States and currently has no plan to break into a global market. They do, however, purchase products from countries throughout the world and have begun tying their sustainability efforts to consumer trust. Jason Wadsworth, sustainability coordinator for the company recently spoke at Food Marketing Institute/Grocery Manufacturers Association Sustainability Summit in Rochester, New York and stated that customers return to a store because they trust their brand. He acknowledges that global sourcing is making it much more difficult to maintain that trust and it is a burden to the retailer. According to Wadsworth (2012), “Brand trust matters. Customers who come to Wegmans feel good about our brand and that we’re doing the right thing, even if they don’t always have all the information about sustainability. If you have consumer trust and brand integrity, then you have a license to operate.” (Orgel, 2012)
As one of the most successful grocery stores, Wegmans continues to be one of the best companies to work for and we believe that this is due to their commitment to their employees first and customers second. By placing an emphasis on the Associate, the employee’s work ethic is geared towards creating a positive attitude that the customers register with. Wegmans has generally been ahead of its competitors in all areas of bringing best quality of foods to its customers and due to this, Wegmans has one of the lowest employee turnover rates in their industry. The company’s respect for people who think outside the box and encouragement to those who are not afraid to voice their opinion is another reason for the low turnover rate. Another attribute that identifies Wegmans above others in its industry is a high standard of customer service and respect for customers.
To recruit personnel for Wegmans, a mixture of methods to attract the best and most eager employees should be used. Wegman’s six to seven percent turnover is extremely low compared to other grocers in the industry. The industry average is 19% for full time and up to 100% for part time employees. (Martins, 2011)
New store recruitment should include radio, websites, employee referrals, and internal transfers while consistently reminding employment prospects about Wegman’s benefits. Wegmans has a cult like following among its customers and employees. Part-time employees account for 400 of the employees hired at a new store. A key demographic will be the unemployed 25 years and older which has an unemployment rate of 7.4% for those with less than a bachelor’s degree. (Weisenthal, 2013) These individuals have maturity and life experience which will assist with interacting with customers. Because of the quantity of jobs being filled by Wegmans, radio stations in the area will want to interview a representative of the company. Customers who are familiar with Wegmans will alert friends of the employment opportunity and the unemployed will be alerted as well. Radio interviews will also be an opportunity to mention Wegmans typically pays more than other retail companies which will entice prospects with experience that are currently employed. (Boyle, 2005)
A new store will also require 150 full time employees. Supervisors, managers and skilled employees can be found using job fairs and internal transfers. Half of all managers at Wegmans started in their teens so employees are aware of the possibility for job opportunities within their organization. (Boyle, 2005) Job fairs can be helpful if they are geared towards specific industries. (Brennan, personal interview, 2013)
The internet postings for positions will be an important part to filling the open jobs. AAA Mid-Atlantic a retail company has been recognized as one of the best places in Delaware to work seven consecutive years by The New Journal and receives 80,000 applicants annually. (Top Work Places, 2013) (Brennan, personal interview, 2013) Wegmans is a much larger organization then AAA Mid-Atlantic and has won the Fortune 100 Best Places to Work sixteen uninterrupted years. This award is nationally recognized and will assist with attracting qualified applicants.
Hiring relatives and friends of employees will assist with filling positions quickly and with quality personnel. Currently one in five employees is related to one another at Wegmans and we would recommend continuing this trend for future hiring. (Velasquez, 2013)
Wegmans has no plans to expand into a global market, yet they will be required to continually look at their global sources and ensure that they are following the guidelines and laws for sourcing their products. By tying their sustainability initiatives to their global partners, they will ensure they offer the best products and retain the trust with their customer base that their customers have come to know.
As Wegmans loses employees due to retirement, we recommend Wegmans recruit new employees via radio, websites, employee referrals, and internet postings. The only recommendation is to continue putting employees first and invest in technology to prolong Wegman’s competitive advantage. “Every Day You Get Our Best” is Wegmans motto and by expressing this commitment from the CEO down to the entry-level employee, Wegmans will remain a Best Place to Work and shop for the foreseeable future.

References
Boyle, Matthew. (2005) The Wegmans way. Fortune Magazine. January 24, 2005.
CNNMoney. (2008). Everybody Loves Wegmans. Retrieved from: http://money.cnn.com/video/fortune/2008/01/22/bpw.wegmans.fortune/
Editor. (2012) Buffalo state to Wegmans: Thank You!. Retrieved from: US Fed News Service, Including US State News. July 20, 2012.
Facts. (2013) Facts and Figures. Retrieved from: http://www.wegmans.com/ webapp/wcs/stores/servlet/CategoryDisplay? categoryId=281152&storeId=10052 &langId=-1&catalogId=10002
FAQ. (2013). Frequently asked questions. Retrieved from: http://www.wegmans. com/webapp/wcs/stores/servlet/FAQDetailView?storeId=10052&catalogId=10002&langId=-1&faqCategory=AboutWegmans#question_11
History. (2013). http://www.wegmans.com/webapp/wcs/stores/servlet/CategoryDisplay? storeId=10052&identifier=CATEGORY_1381
Hoovers. (2013). Financials. Wegmans Food Markets, Inc. http://www.chartcourse.com/appreciate-your-staff-the-wegman-way/ Human resources and skills development canada. (n.d.). Retrieved from http://www10.hrsdc.gc.ca/English/ShowProfile.aspx?v=75
Martin, Melainie. (2011) Data on Employee Turnover in the Grocery Industry. Chron.
Miller, Dan. (2007) Wegmans to open hiring office. Knight Ridder. (Feb 6, 2007)
Orgel, D. (2012). Wegman’s Ties Sustainability to Consumer Trust. Retrieved from: http://supermarketnews.com/sustainability/wegmans-ties-sustainability-consumer-trust
Smith, G. (2012). Employee Appreciation | The Wegman Way. Retrieved from: http://www.chartcourse.com/appreciate-your-staff-the-wegman-way/
Snapshot. (2013). Wegman’s Food Markets, Inc. LexisNexis Academic.
Springer, Jon. (2006). Thinking differently. Supermarket News.
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Velasquez, S. (2013). Buffalo.com. January 3, 2013.
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