Family Fortune

Wegmans is a testament to the importance of family.

The Rochester, N.Y.-based chain of 81 supermarkets tends to attract coverage with headlines like "Could This Be the Best Company in the World?" It consistently stays ahead of trends in product innovation, merchandising, technology and customer service, regularly outperforming competitors in its six-state area of operations.

One of the biggest reasons Wegmans has been able to compete so effectively is its status as a family-owned business, which gives it flexibility that a public company, having to respond to shareholders, may not have.

"When you have to put shareholder value at the top of the pyramid, it puts you in a position to be [unable] to do the things that are the right things for your customers," says Jean Forney, managing partner at Samuel J. Associates, an executive recruitment firm. "Wegmans has always had their customers at the top of their decision-making pyramid."

Forney has personal experience in this regard: She worked for Wegmans as a general merchandise department specialist from 1985 to 1992, and in the course of her current job, deals with more recent Wegmans employees.

"The culture is still a family-oriented culture because there's family at the top," she says. "The investment they make in you is rare, especially in this industry." Forney herself was a beneficiary of that investment, getting a scholarship for continuing education during her employment at Wegmans. The scholarship program pays up to $2,200 a year for four years for full-time employees.

The employee benefits go beyond educational opportunities. In pay, training, career opportunities, flexible scheduling and generally making employees feel valued, Wegmans stands above most of its peers.

Prepared foods has long been one area where Wegmans consistently excels.

Good employee relations are a key part of another point of distinction for Wegmans: good service. The well-staffed stores are full of employees who are eager to tell shoppers what ranch their beef came from or what cool-climate chardonnay goes best with the fish in their cart.

Those employees have a lot to talk about. Wegmans is well known in the communities it serves for what it has to offer beyond simple grocery shopping: a terrific assortment of prepared meals, baked goods and other items that make it a destination. That store perimeter, with top-notch produce and meat to go along with the prepared items, make Wegmans a favorite among many shoppers.

"There is no one in industry that does the perishable department and makes it such a destination business as Wegmans does," Forney says. "I can talk to one of my friends from Rochester, and they're on their way to Wegmans for lunch. It's like other people go to Subway."

But Wegmans is not just a family-owned version of Trader Joe's or Whole Foods. The average store features 70,000 SKUs, roughly double a conventional supermarket. The volume allows Wegmans to bridge the gap between commodity grocer and destination center–a key component of the company's success.

"The other side of that is, while their image could be a price problem–you think, 'Oh gosh, they build these big, wonderful stores, they must be more expensive.' The center store is very competitive compared to the supercenters," Forney says.

Information technology is a particular point of pride, Forney says: sales, scheduling and any other information Wegmans personnel need is available at the touch of a button.

"They've got every tool they need inside the store from a technology standpoint," she says. "As a matter of fact, sometimes it's hard for a Wegmans person to transition to a different company because they don't have the same tools available to them."