In 2014, Consumer Reports surveyed 27,000-plus readers in its annual effort to rank 55 of the largest U.S. supermarket chains. The survey gauged shoppers’ satisfaction with the retailers’ service, price, cleanliness and perishables. When all was said and done, one retailer rose to the very top: Wegmans Food Markets Inc., a privately held regional chain based in Rochester, N.Y.
Although those four measures of performance certainly are critical, Wegmans’ loyal shoppers likely would add one more to the list of what makes the retailer such a standout: the myriad sights, smells, tastes and sounds that combine to create a one-of-a-kind shopping experience.
BuzzFeed staffer Rachel Sanders might have described the “Wegmans experience” best in an August 2013 post titled “25 Reasons Wegmans is the Greatest Supermarket the World Will Ever Know.” “Shopping at Wegmans is essentially a journey through a small, beautifully maintained, self-sustaining city,” she wrote.
And that “city” — recreated 85 times within the states of New York, Pennsylvania, New Jersey, Virginia, Maryland and Massachusetts — is populated with people who know how to deliver that unique Wegmans experience to shoppers. The 44,000-plus employees Wegmans counts among its ranks are educated well and treated well, making them enthusiastic ambassadors for the banner. In fact, in 2014, Wegmans made Fortune magazine’s list of the “100 Best Companies to Work For” — for the 17th year in a row.
“Our employees make Wegmans a place where customers feel happy and cared about, and my job is to make sure our employees feel that way, too,” said Danny Wegman, CEO, of the 2014 honor. “What’s most important to us is that our employees feel that Wegmans is a great place to work.”
W. Frank Dell II, president and CEO of Stamford, Conn.-based Dellmart & Company Inc., suggests that job satisfaction is obvious on the employees’ faces.
“Except for Publix, there are more smiles on employees in the store than one will find in most supermarkets,” he says.
And that happiness is contagious.
“If people are engaged and excited about what they do there, if they’re proud to be working there, if they’re treated well, that reflects back to the customers and has a significant impact,” says Jim Wisner, president of Wisner Marketing Group, Libertyville, Ill.
A stellar store brand program
In addition to happy and engaged employees, a critical part of the Wegmans experience is the incredibly large assortment of packaged and prepared food and beverage products, as well as non-food offerings, the retailer offers. Wegmans says its largest stores (store size ranges from 80,000 to 140,000 square feet) carry almost 70,000 products, including a wide range of international items. And its “stores within a store” include a Market Café with a dizzying array of prepared food items and large seating areas, a Cheese Shop with upwards of 300 specialty cheese choices, an oversized bakery featuring European specialties and other temptations, and many more.
But most impressive among the offerings — and the reason Wegmans deserves Store Brands’ 2015 Retailer of the Year honors — are the retailer’s private brand products. As Jim Hertel, managing partner for the Barrington, Ill.-based Willard Bishop LLC food retail consulting firm, explains, the program builds on the brand equity of the Wegmans name. (In fact, whether it’s Wegmans Italian Classics, Wegmans Food You Feel Good About or another of the retailer’s many store brands, the Wegmans name always comes first.)
“It’s clearly a part of a strategic approach to the marketplace, not just a ‘me-too,’ but a real reflection of the brand promise they make,” he says. “They’ll delist national brands if the price-value proposition is not good enough for their customers.”
And Wegmans’ store brand program emphasizes quality, Dell adds.
“For other retailers, this quality might be classified as gourmet,’ but it is the norm at Wegmans,” he says.
Carol Spieckerman, president of the newmarketbuilders retail consultancy, believes it’s that attention to quality that really stands out in shoppers’ minds.
“Wegmans clearly views its private brands as a way that its customers take the brand home, not just as margin-builders,” she says. “At the same time, Wegmans’ unique and pristine stores create a powerful frame for its brands, one that is the envy of the industry.”
The program is customer-centric, too, boasting product formulations created specifically for Wegmans’ shoppers, Dell says.
“Wegmans knows its customers and uses that knowledge to develop and select products they are not getting from national brands,” he states.
Although Wegmans has been able to demonstrate that its private brand products are not just cheaper, but actually represent a value to shoppers, the retailer’s private brand program’s contribution to gross margin cannot be overlooked as a factor behind its success, suggests Paula Rosenblum, managing partner for Miami-headquartered Retail Systems Research.
“It offers customers an option and it delivers more gross margin to the retailer,” she says. “I honestly believe that a strong private brand program is critical to any grocer’s long-term success. Otherwise, it just can’t deliver a strong bottom line.”
A story to tell
Another private brand strength, Wisner says, is Wegmans’ ability to tell and promote the story behind many of its products. The retailer excels at creating a “sense of experience” in marketing those products, he says, pointing to Wegmans’ own cheese caves as one example.
The caves, which began operating last April, not only will yield soft and washed-rind cheeses with a more consistent level of quality, Wegmans said at the time of opening, but also will take “employees and customers along on an educational journey” into the efforts required to craft “perfect cheese.” The caves, which mimic the environments of famed cheese caves in Europe, are housed in a 12,300-square-foot building that allows as many as eight different cheeses to be ripened at the same time. The first two exclusive cheeses produced in the caves — Bourbon-Washed Pie d’Angloys and Cremeux de Bourgogne — made their debut in December.
And when it recently added to its Wegmans Italian Classics own-brand lineup, Wisner says, Wegmans played up the fact that the line was sourced in Tuscany — and told customers why.
“There’s a back story to what they do; there’s a sense of authenticity to what they do,” he notes.
Wegmans also is adept at communicating its products’ stories through multiple channels ranging from its Wegmans Menu magazine to its employee-written blog.
“Even though ‘content’ and ‘content marketing’ became ubiquitous in 2014, many retailers are still in the early stages when it comes to crafting strategy,” Spieckerman says. “Wegmans has focused on it for quite some time, and I give special props to its highly engaging and informative blog. It’s a terrific forum for announcing product launches, showcasing ways that Wegmans is listening and responding to customer input, and providing additional color on any number of its customers’ niche interests and needs [such as] gluten-free, GMOs, etc.”
Wisner also believes that the retailer leverages YouTube better than its competition to talk about the food experience, strengthen viewers’ food knowledge and food preparation skills, and promote its private brands.
“They do an awful lot of work, all of it supported by video, with their culinary staff and chefs,” he explains. “And every one of those videos somehow incorporates products that are unique to Wegmans — their own brands.”
Also key to the success of its private brand program — and to the overall Wegmans experience — is the retailer’s commitment to staying on-trend in new product development. Wisner points to Wegmans’ 2014 debut of natural “better for them” pet food (under the Wegmans Simply from Nature brand) and gluten-free baking mixes (under the Wegmans Gluten Free and Wegmans Food You Feel Good About Gluten Free brands) as two examples of relevant on-trend development.
“If you take all the hot issues, Wegmans does something for its customers,” he maintains. “They say, ‘You don’t have to go elsewhere to find this stuff; you can trust us.’”
That statement certainly applies to Wegmans’ own-brand organic offerings. Mark Heckman, who heads Bradenton, Fla.-based Mark Heckman Consulting, notes that the retailer’s store brand organic offerings rival those of Kroger — a much larger retailer — in number.
“In addition, Wegmans has invested in their [Wegmans] Organic Farm, which they tout as a source of many of their organic and natural products,” he says. “This commitment is not lost on their loyal shoppers.”
The past year certainly was a busy one for Wegmans in terms of trend-centric new product development. In addition to the natural pet food and gluten-free baking mixes, the retailer said it added gluten-free chocolate brownies, chocolate chip cookies, snickerdoodles, and vanilla and chocolate cupcakes to its in-store bakery. In a continuation of the “better-for-them” theme, Wegmans also announced the debut of organic flour, sugar and other baking products under the Wegmans Organic brand; a line of organic Greek yogurt under the Wegmans Food You Feel Good About Organic brand; and even a whole-grain cookie range to its Wegmans’ Cookie Bar. And this January, the retailer announced that it has been cutting added sugar in some of its existing store brand products.
“We’re updating Wegmans products across the store to cut added sugar when we can while preserving the taste appeal customers expect,” said Jane Andrews MS, RD, Wegmans’ nutrition and product labeling manager.
Not all new food product development has been focused on more healthful offerings, however. For example, Wegmans added a line of frozen singleserve Italian lasagnas under its popular Wegmans Italian Classics brand in 2014.
The retailer gave attention to the non-food side, too, announcing the launch of single-dose laundry and dishwasher detergents under the Wegmans brand last year. It also introduced Wegmans brand cleaning products designed to be safer than traditional cleaners for humans, pets and the environment. Wegmans said it opted to use the Design for the Environment criteria, established by the U.S. Environmental Protection Agency, as its guidelines in creating the products.
And beyond packaged goods, Wegmans continues to evolve its fresh and prepared food departments. For example, on the fresh side, the retailer partnered last August with the Gulf Seafood Marketing Coalition, Tampa, Fla., to launch a line of frozen wild-caught Gulf of Mexico peeled and deveined shrimp that offers shoppers the “delicious flavors of the Gulf of Mexico” year-round. According to the Gulf Seafood Marketing Coalition, Wegmans offered a day of Gulf Coast seafood cooking demonstrations, freshly prepared wild-caught Gulf shrimp dish samples and educational grilling techniques to support the launch.
“They are excellent ‘fresh department’ merchants,” Hertel stresses. “Part of it is local; part is presentation, but a lot of it is due to their service department personnel, who are knowledgeable, friendly and clearly enthusiastic about … what they do.”
Heckman notes that because Wegmans has such a strong brand image as a chain, it is able to extend its name to many fresh items such as meats “with the confidence that their brand name implies ‘fresh,’ ‘quality’ and ‘satisfaction’ guarantees.”
And when it comes to prepared foods, Wegmans was the first retailer to act as what now is referred to as a “groceraunt,” Wisner says.
“If you walk into a Wegmans store at lunchtime, it’s the busiest ‘restaurant’ around,” he adds. “All of that really is private label, and I think they’ve done a really good job.”
One notable 2014 effort here is the removal of all gluten-containing ingredients from Wegmans’ prepared sushi products. The revamped products were the culmination of a two-year effort between the retailer and its supplier partners, Wegmans said when the launch was announced back in June.
Sushi also was a focus early this year, when the retailer introduced several offerings made with sustainably sourced wild Alaskan salmon. Wegmans said the salmon — which comes from Bristol Bay, the easternmost arm of the Bering Sea, located in southwest Alaska — is sourced through Uoriki Fresh, a Japanese company with which it has partnered since 2008.
But Wegmans really upped its prepared foods game in 2013, when it opened a full-service restaurant in Rochester called Amore Restaurant and Wine Bar. Designed to “celebrate great food and wine in true Italian tradition,” the restaurant features the menu creations of Executive Chef Russell Ferguson.
Poised to stay strong
Wegmans appears to have honed its own-brand approach to the point where continued success is almost guaranteed in the years to come.
“Wegmans … thinks and acts like a CPG brand when it comes to their store brands,” Heckman emphasizes. “Accordingly, Wegmans spends time and energy working with their packaging partners to determine optional package form and label design, as well as to allocate a sizeable amount of their advertising resources to promote their brands.”
It also has demonstrated a commitment to staying ahead of the curve, Dell says.
“Wegmans does not wait for the rest of the industry to try something,” he maintains. “Because they know their customers as well as they do, this is not as big a risk as it would be for other retailers.”
And that well-honed approach will continue to play a pivotal role in the one-of-a-kind, shopper-beloved Wegmans experience.
“Wegmans’ customers are literally ‘buying into’ the total brand experience and banner every time they make a private brand purchase and doing so without hesitation,” Spieckerman offers. “Shoppers are proud to buy Wegmans’ brands.”