Welcome to Leading Edge, a semi-monthly Q&A forum where some of the grocery industry’s top executives share their views on several current and important issues. This week’s interviewee is Bob Gleeson, senior VP-merchandising and marketing for Weis Markets, the Sunbury, PA-based regional chain that operates 197 stores in Pennsylvania, Delaware, Maryland, New Jersey, New York, Virginia and West Virginia. Gleeson joined Weis in 2019 after a long career at Shoppers Food Warehouse. Gleeson discusses the challenges of being a chief merchant, tackling current supply chain difficulties and the how continuing inflation has impacted business.
- As chief merchant, what do you view as the most challenging issue on your plate currently?
The challenges of operating stores and keeping them stocked during a pandemic and a time of supply chain disruptions, limited labor availability, higher fuel costs and changing consumer patterns have made us better as an organization and as individuals – we can quickly adapt and know that if plan A doesn’t work, we are prepared with plans B and C.
I am truly fortunate to work with a great team – one that’s taken on these challenges and succeeded. This achievement is based on the commitment of our support, supply chain, store management and associate teams who hung in there during a very difficult time and made us successful.
Today, our merchandising/marketing group works a hybrid schedule. We want to ensure associate safety while offering our team the chance to collaborate and work together in person.
It’s a balancing act, but it facilitates associate engagement, which in turn helps sustain our continued growth.
2. Have you seen any improvement in supply chain issues in the last two months? Where do the chokepoints remain and when do you believe that we’ll see service levels returning to something resembling pre-COVID levels?
There has been improvement in some areas but there are also new challenges. This year, we’ve worked through wet cat food shortages and are getting through the infant formula issue. General merchandise availability, particularly in the summer, has been a challenge due to supply chain/manufacturing issues in China. An additional complication is the fact that some mass merchandisers overbought and are now discounting their GM inventories. Wheat is also in short supply due to the Russia-Ukraine conflict since these countries produce about a third of the world’s wheat. This has resulted in pasta category challenges. Record heat throughout our country is another challenge that has impacted produce supply and the beef industry. And, because cattlemen are sending their herds to market early due to feed shortages and higher costs caused by drought, this will result in tight beef supplies in the winter.
3. What lessons have you learned from operating in a pandemic-oriented environment? How have those lessons made Weis a better company?
Since 2020, we’ve been building on our progress – improving efficiencies, keeping our stores in stock and adjusting to changing customer needs.
A good example is our meal center program which we started in one store at the end of 2021. Since then, we have rolled out meal centers in 40 stores and enhanced sets in another 23 stores. The rationale is simple: While people are eating more meals at home, not all of them are cooking.
Our meal centers offer entrees and sides from deli, produce, meat and seafood. We expanded the selection and increased the quality – and it’s paying off for us.
On the marketing/advertising side, it was initially impractical to do weekly print ads early on given the supply chain issues. Instead, we focused on monthly ads, digital advertising and our long-term Low, Low Price program which offers sharp pricing on nearly 8,000 grocery, produce and frozen items. Since its launch, we’ve invested millions of dollars in our program.
It’s been a continuous learning process since March 2020.
4. How have retailer/supplier relationships changed in the past 30 months? What would be on your new “wish list” as it applies to the vendors who call on Weis?
Collaboration on supply chain and product procurement has become a much larger part of our daily activities. The pandemic, continued supply chain disruptions and significant inflation have changed our playbook.
Today, we’re continuously working with manufacturers and vendors to manage allocations and coordinate product availability to keep our stores in stock. It can be a challenging process.
At the same time, many of our customers have embraced e-commerce and are increasingly utilizing digital advertising and coupons. Our manufacturers and vendors are stepping up to partner with us to meet these changing customer needs and expectations.
We hope to see continued supply chain improvements and increased product availability in center store categories. It’s also important to note a significant number of SKUs were paused over the past 24 months. As availability improves, we will be prudent with bringing these items back.
It is certainly true that food inflation is outpacing other segments of the economy, resulting in multiple supplier price increases over the past 18 months. We want our suppliers to understand the impact on our customers. They should also understand we face the same inflationary pressures which impact our business and Joint Business Planning strategies. Their planning and offering needs to reflect these realities.
5. With some of nation’s largest retailers expressing concerns about the effects of this inflationary economy (including trading down and increasing internal expenses), have you noticed a shift in buying patterns and are you concerned that most retailers will see a softening ahead?
We see the classic signs of customers trading down and looking for ways to economize. This includes increased purchases of canned goods, increased private brand sales and switching from beef to pork and chicken. Customers are more focused on promotions, including feature items and hot deals. But even in an inflationary period, we still offer customers the most economical way to feed their families, bar none. While food spending as a percentage of income is up in the US, it remains one of the lowest percentages in the world. Even during the early months of the pandemic, when food demand shifted to supermarkets almost overnight resulting in rolling supply chain disruptions, the fact remained that whenever customers walked into a Weis Markets’ store, we had plenty of food for their families.
