Coming off one of its best sales performances in recent years, Weis Markets is poised to continue to drive revenue and develop stores that place more focus on health and wellness, customer experience and improved technology. That’s the message that chief executive Jonathan Weis told more than 600 suppliers, brokers and distributors at the company recent “strategic alignment” vendor meeting held earlier this month at the BWI Marriott in Linthicum Heights, MD.
In fiscal year 2015, which ended December 26, the Sunbury, PA-based regional chain posted an overall sales increase of 3.6 percent with comp store revenue (excluding fuel) jumping 4.4 percent. Total sales for the year were $2.9 billion.
Jonathan Weis kicked-off the four hour confab by noting that he viewed the strategic alignment meeting “as an excellent opportunity to talk about our business and reinforce our relationship. In a fast changing retail environment, we believe that candid communication can help us grow our respective sales.”
The 48-year old CEO stated that one of the company’s goals is to “make our company more convenient and relevant,” adding that in fiscal 2016 Weis will be allocating a record $140 million toward capital improvements and has developed a new store design that is more community focused.
“We are in a ‘people’ business,” Weis noted. “It is vital that we continue to improve the customer experience by developing better insights into their needs and then providing them with the products and services they desire in our stores.”
Kurt Schertle, Weis’ chief operating officer, illustrated the retailer’s trend of recent sales growth by noting that average per-unit sales have increased by more than 30 percent over the past six years, culminating with fiscal 2015’s highest per-store average in the company’s 104-year history.
He also said that, based on sales comparisons (both total and identical store), Weis’ recent performance was better than many of its regional competitors. “Our recent results are analogous to the best-in-class food retailers including Wegmans, Kroger and ShopRite,” he proclaimed.
Noting that Weis was able to take advantage of competitive store closings (“tailwinds”), it also was aggressive in implementing and executing its own aggressive game plan.
“We completed 150 resets last year; we will complete and additional 200 resets in 2016. Last year, we introduced more than 4,000 new items, 900 more than in 2014. We currently have 43 natural and organic ‘store within a store’ locations with additional ones planned. In 2015 we also added five new fuel centers and we are expanding our beer café program. We now have 38 beer cafes with 14 more planned in 2016,” he affirmed.
Schertle told the audience that it was important that Weis stay “on trend” with the products and services their customers want. Working with the “As Seen on TV” sales team, the 44-year old supermarket executive told the story of how “My Pillow” (a late night staple infomercial) has been performing at a high level since Weis began promoting it recently.
“As off-the-wall as it may seem, people are willing to pay $50 for a pillow,” he revealed. “We are determined to be on-trend in every category including food and general merchandise.”
Other areas of planned targeted growth that have met or exceeded expectations include Weis’ online platform (“WOS”) and its pharmacy department.
When Weis held its last formal vendor meeting – in 2014 – Schertle said he hoped that recent price investments at that time would be the catalyst to growing sales more rapidly. In reflection that plan has worked very successfully and now includes several subsets -“everyday lower prices;” “lowest price guarantee;” “fantastic Fridays;” and “mega savings.”
Before turning the podium over to Richard Gunn, Weis’ senior VP-merchandising and marketing, Schertle provided overviews of Weis’ improved efficiency in distribution/logistics/supply chain and advancements made to its IT infrastructure.
When Richard Gunn joined Weis in May 2015, he became the chain’s first true chief merchant since Schertle was hired for that job in 2009 (he was named COO in 2014). The veteran merchandising executive who joined the company from Food City (K-VA-T) in Abingdon, VA, told the vendors: “Be very targeted. Be very tactical. Be very strategic.”
He praised the suppliers, brokers and distributors in the crowd for their support and explained that a collaborative effort of goals, visions, ideas and teamwork will yield success.
“We want to be your most profitable customer by being the master of the mix,” he said. Additionally, we want to achieve our ultimate goals of better sourcing, improved service, enhanced value and increased value.”
More specifically, Gunn noted improved quality and merchandising have resulted in significant sales gains in all fresh departments – meat, seafood, produce, bakery, deli, foodservice and floral. Within those areas, Weis plans to improve its local initiatives in all categories. He cited such Central Pennsylvania based firms as Kreider Farms, Utz, John F. Martin, Pardoe’s Perky Peanuts, Herr’s, Hanover Foods and Lehigh Valley Dairy as important local partners.
Brian Holt, Weis’ VP-marketing, advertising and public relations, began his presentation by reaffirming the company’s mission: “To deliver an exceptional shopping experience by offering best value, service, quality and freshest products while being good stewards of our environment and giving back to the communities we serve.”
He detailed each of Weis’ value propositions: weekly specials, lowest price guarantee, EDLP, TPR (temporary price reductions), mega sales, fantastic Fridays, gas rewards and holiday rewards. The common link for all these programs is Weis’ loyalty card and particularly its top tier “gold” card, whose usage contributes significantly to overall sales, trips and average annual spend.
As noted by Schertle earlier in the day, Holt provided more insight on Weis’ online shopping effort, noting that weekly sales and average basket size experienced healthy increases last year and by 2017 the company expects 60 stores to part of its click and collect network. Related to its click and collect program is Weis’ delivery service. Launched last year, the retailer now provides delivery of its wet-aged beef, 750 pharmacy items including prescriptions (currently from 40 stores) and floral products.
Holt also updated the vendors on its Nutri-Facts labeling program where tagging is currently “about 55-60 percent complete.”
An important area for Weis has always been community service and philanthropy. Within that scope, Holt revealed that Weis increased its corporate donations by 23 percent in 2015 including supporting such causes as “Fight Hunger” and “Paws for Pets.” Also included in Weis’ community giving are dozens of youth sports organizations, community fairs, veterans groups and local scholarships.”
Also addressed was Weis’ changing approach to media, both traditional and digital/social. As the youngest member of Weis’ management team, the 40-year old Holt has a keen sense of attempting to balance the older connection points (weekly circular) with newer methods to attract customers (use of Facebook, Twitter and Instagram to promote recipe videos).
As he closed his remarks, Holt asked the vendors: “Are you participating in our programs – gold card, shopper intelligence platform, electronic marketing, selling solutions, cause marketing, ecoupons, health & wellness, email blasts, social media and targeted 1:1 digital advertising?
After lunch, the program continued with John Grimes, VP-meat, seafood, deli and foodservice, discussing the challenges and opportunities of his department. Noting that protein sales generally double the size of the average shopping basket, Grimes focused on how to overcome the reality of deflation.
“To keep even with last year’s sales we have to sell 10 percent more meat and seafood units,” he disclosed.”We have to find more meal solutions that are quicker and more affordable.”
In 2012, Weis launched its “Great Meals Start here” program which not only included expanding its meal solution offering, but also focused on service and selection.
Grimes said that associate training has been an important component of the program’s success and the fact that Weis is still cutting meat in its stores (unlike its primary competitor Ahold USA) and is able to utilize its people as a key selling tool has helped Weis’ meat sales grow.
In seafood, Weis has added programs such as “Chairman’s Selection” (upscale varieties) and “My Weis Choice” (specialty ordering program) and “Bag and Bake” (in-store prepared meal solution featuring seafood as the protein). Expanding its sushi program has also helped Weis’ seafood sales grow.
In deli foodservice, Weis has upgraded its store breaded fresh fried and rotisserie chicken programs, expanded its hummus variety and more heavily promoted its pre-sliced deli meat program.
As for new ideas in 2016, Grimes said that greater emphasis will be given to private label offerings in all fresh natural and organic items, a redesign of the retailer’s private label chicken program, increased single serve seafood fillets, a renewed deli foodservice focus on breakfast, lunch, dinner and snacks (as part of its “Weis2Go” branding project), more antibiotic-free chicken products and a refocus on specialty cheese.
The day’s final presenter was Kevin Broe, Weis’ VP-center store sales and merchandising.
The former A&P executive began his speech with this thought: “I still believe in the growth of center store.”
To wit, Broe rattled off examples to prove his point including sales and unit growth in the following categories: snacks, coffee, ice cream, cheese and dairy. Overall, center store sales rose four percent both in units and dollars.
Additionally, Broe noted that “beer is on fire;” organic and gluten free products experienced double digit growth; and Latino and Asian products and HBC items posted healthy increases.
During 2015, Broe’s team completed more than 150 resets and added more than 4,100 new items in the center store mix.
As mentioned by several other speakers during the meeting, Broe emphasized that Weis’ sales-oriented culture continues to drive volume with a diverse and creative programs. He also touched on Weis’ private label strategy and how it might affect vendors with branded products. In a strategy that’s been utilized by other retailers, Weis will implement a merchandising plan that includes promoting both national brands and private label products in a complementary manner.
“For example,” Broe stated, “if we have an endcap with Heinz ketchup, Kraft mayonnaise, Vlasic pickles and Sara Lee rolls, we would display Weis Quality mustard on one shelf. This way we complement the national brand on the other shelf without directly competing with them.”
As far as total supplier expectations, Broe’s “suggestion” list included: drive targeted tactical sales; support marketing efforts; expect the best from each other; dialogue across all levels of the organizations; be open, respectful and respective; share best practices; never leaver dollars on the table; CPG; focus on the customer; and build and foster supplier relationships.
The day concluded when Weis presented its top vendor achievement awards.
From an intimate gathering of approximately 175 suppliers six years ago at the Clarion Hotel in Hagerstown, MD, the Weis strategic alignment meeting has grown to become one of the industry’s best retailer-vendor events.
