Wakefern Food Corp. marked its 75th anniversary during its annual meeting on October 21, when executives paid tribute to the family-owned businesses that comprise the cooperative and drive its success.
For its fiscal year ended October 2, the industry’s largest wholesale food cooperative posted retail sales of $17.8 billion, a slight drop from last year’s COVID-fueled sales of $18.3 billion. During that same period, Wakefern opened four ShopRite stores, four Price Rite Marketplace supermarkets, and welcomed a new member, the Slawsby family. That Massachusetts-based retailer, Madison Foods, is a third-generation grocery business now operating four new Price Rite Marketplace supermarkets in the Boston area.
Chairman and CEO Joseph S. Colalillo, president and COO Joe Sheridan and executive VP Chris Lane addressed Wakefern members, shareholders, staff and store management during the meeting, which included both an in-person and a virtual audience. The meeting was held at the Marriott in Whippany, NJ.
“As we reflect upon the rich legacy of our cooperative – and the history of our family businesses – we also focus on the future, mindful that we are here today because working together, our founding families had the foresight, determination and grit to always look forward. Seventy-five years later, we are still made up of family-owned businesses with deep roots in the communities where our stores operate,” said Colalillo, who also leads his own family business, the ShopRite of Hunterdon County, which was founded by his father in 1954 and today includes five ShopRite stores.
Faced with increasing pressure from big chain supermarkets, eight independent New Jersey grocers came together in 1946 to maximize their purchasing power by forming a buying cooperative – Wakefern. More than seven decades later, the company represents the largest-retailer owned cooperative in the U.S. with members who operate stores under the ShopRite, Price Rite Marketplace, the Fresh Grocer, Gourmet Garage, Fairway Market and Dearborn Market banners. Many of the members are in their third or fourth generation of ownership and have been part of the cooperative since its founding.
Sheridan thanked members, associates and the thousands of store associates for their commitment to the cooperative and the work that has helped Wakefern reach a milestone anniversary at a time when the industry and the world is also being reshaped by the pandemic.
The 75th anniversary celebration and meeting also included recorded video thank-you and congratulatory messages from local celebrities, athletes, community and industry leaders, and representatives of the Special Olympics New Jersey and several food banks supported by Wakefern.
“Seventy-five years is a big deal – pretty remarkable given that family-owned businesses rarely survive past the third generation. It’s important that we pause and recognize this milestone and use it as a moment to reflect on what made us great in the past and what will keep us great to ensure that we keep moving forward for generations to come,” noted Sheridan.
Lane reported on new retail innovations that will continue to move the company forward and elevate the customer experience when it comes to on-line and in-store shopping. Initiatives include the continued expansion of Wakefern’s own brands, Bowl & Basket, Paperbird, and Wholesome Pantry and Wholesome Pantry Organic, as well as the expansion of the Fresh to Table concept in ShopRite stores. The Fresh to Table department reimagines foods to go by providing wholesome and affordable fresh foods, prepped ingredients and meal solutions to customers.
“We are all invested together in this partnership, our cooperative,” said Lane. “Teamwork was the key to Wakefern’s founding and early successes, and I’m confident it’s the key to Wakefern’s future.”
Colalillo also presented this year’s Chairman’s Award to Dewey Cannella, Wakefern’s recently retired VP of labor relations, thanking Cannella for his more than 30 years of service to the cooperative.
After the meeting, we talked to Lane on a variety of topics related to the co-op. The 18-year Wakefern veteran feels confident that his company is taking the proper steps to ensure future growth,
“Over the last several years we’ve become a much more strategic company. Our ability to improve our long-term planning has helped us become more agile and nimble and allowed us to make better long-term investments, particularly in technology,” Lane noted.
He added that the improved flexibility was of particular importance to a company like Wakefern which is governed by 50 independent families operating multiple banners that together amass nearly $18 billion in annual sales.
One key priority has been Wakefern’s focus on e-commerce. Lane noted that the Keasbey, NJ-based distributor has been involved in some level of e-commerce for about 20 years, but added that the game is changing rapidly both from a consumer expectation standpoint and as a competitive challenge.
“We’re certainly making progress with our e-commerce initiatives. We surpassed $1 billion in digital sales last year and continue to invest heavily in micro-fulfillment centers, robotics and pick-up pods,” Lane asserted. “But we’re not Walmart and we’re not Amazon; our approach will be more pragmatic. For a company of our size, making the right investment is vital.”
And while Wakefern’s e-commerce priorities may differ from the larger global retailers, Lane sees several advantages where Wakefern can use its unique structure to capture more revenue from its e-commerce platform.
“Because our stores produce high-volume sales (more than $1 million weekly on average) and we’re located in many densely populated areas, it’s not always possible to build a micro-fulfillment center. But I consider that a good problem – starting off with a significant volume base coupled with strong customer loyalty in stores run by community-minded members. However, we do need to continue to move forward with our e-commerce growth plan – it’s an important part of our future.”
A related area that Lane believes will help Wakefern become more efficient, both in e-commerce and at its more than 360 physical stores, is the integration of a new supply chain system. For many years, the wholesaler had deployed its own internally developed program. Last year, the company made a major decision and converted to an SAP data-driven system. The three-year conversion plan will be completed next year and will allow Wakefern to optimize its inventory and improve its forecasting.
As with most merchants, the changes that retailers made during the onset of COVID-19 were substantial and continue today to some degree. Lane shared his views of how Wakefern managed this unprecedented event.
“Our first concern was protecting our people while not losing sight that our basic job is to serve our communities. Those two pieces are integrally linked,” Lane explained. “As I said earlier, one of the real strengths of Wakefern is the unique bond between our members and our staff. Those connections are an invaluable component of our success.”
As for the current challenges with labor, wages and overall supply chain, Lane feels that those difficulties will abate, although it might take until the middle of next year to return to normalcy.
“Certainly there are labor shortages affecting the entire industry. And we’re all going through supply chain problems,” Lane said. “However, as a company that operates with local ownership, I feel our nimbleness is an advantage. The retail business is still largely about people and being a ‘people organization’ I believe is our greatest strength.”