MOVING UP

Few high-school students aspire to become frozen food or produce managers. Usually, this happens by default. Unable to or uninterested in attending college, these young adults take whatever job they can. Some stay and become managers; a few even make it to the corporate office.

"Retail traditionally hasn't been an area where people say it's going to be their career," says Oscar Gonzalez, co-owner, co-president and chief operating officer at Hispanic specialty chain Northgate Gonzalez Markets "Usually it's by default. They'll start working as a box boy and then start to see it as a career path."

While many retailers tout the benefits of promoting from within, advancing without a college degree is hard for both the employee and the retailer. A store worker must be driven and determined. At the same time, the retailer must invest the time and money to give the employee the tools he or she needs.

Most chains that stress promoting from within offer both internal training and outside academic programs like those developed by the Western Association of Food Chains (WAFC). WAFC's efforts began in 1958 when retailers and wholesalers "saw a need for food industry-specific education," says Carole Christianson, WAFC's chief operating officer.

Since then, more than 1,600 students have graduated from WAFC programs. Participating retailers, CPG companies and private donations pay for tuition.

The following pages take a close look at the corporate cultures and philosophies around four supermarket chains. These retailers are dramatically different when it comes to merchandise and market position. But they all have one thing in common: each places a premium on internal employee development and education.

Safeway: BEYOND THE SELLING FLOOR

In 1988, Karl Schroeder was a store manager in Safeway's Phoenix division. The store was his world: he helped customers, received orders and managed employees. But while Schroeder was successful, he had limited knowledge of how buyers worked and other critical functions beyond his four walls.

Today, Schroeder is division president of Safeway's $44 billion Northern California division. But before he climbed the corporate ladder, he needed to better understand how all of the interconnecting parts of a large retail organization work. So in 1988, he enrolled in WAFC's Food Industry Management Program. And in 2012, he completed his Bachelor of Arts degree in organizational leadership and behavior at the University of San Francisco.

It was Schroeder's experience with the Food Industry Management Program that made him realize there was a larger world beyond the Phoenix market. "My perspective exploded from within the four walls of the store to considering the industry as a whole on a national and international level," he says. "It wasn't just a light bulb kicking on, it was a runway of light bulbs with tools that have helped guide my career with insights in management, leadership, communication and analytical skills."

Debbie Rookstool, director of learning and leadership at Safeway, participated in the WAFC program in 1995. She also benefited from learning more about communications along with finance and accounting.

Productive employees must also be aware of the many external factors that can impact a 1,641-store chain. "Without education, a company might not keep up with innovative ways to enter markets and drive business results," says Rookskool. "We need employees to stay in tune with emerging trends, economic factors and technology. This often includes scanning the horizon outside our industry to understand how consumers are spending their food dollars and what attracts customers to non-traditional formats."

Schroeder and Rookskool are two of many Safeway executives and other personnel who have participated in WAFC's initiatives. In fact, it was Safeway's own Merle McGinnis, formerly manager of personnel services, who was instrumental in establishing the WAFC in 1958. McGinnis served as WAFC's director until 1971.

Not all WAFC participants have gone on to earn degrees, but providing them with additional education has helped them advance.

"We take pride in promoting from within," says Schroeder. "We have effective leaders with little or no secondary education. We believe that by encouraging our teams to take advantage of developmental opportunities, we are providing them with the opportunity to advance faster and further. I see the growth and development of team members through the programs. This is an absolute stepping stone for advancement."

Rookstool added that about 80 percent of store managers were developed within the organization. Two to five people participate in the Food Industry Management program annually; 200 to 400 take part in the Retail Management Certificate Program.

BROOKSHIRE: BEYOND THE EXECUTIVE SUITE

Whenever possible, Brookshire Grocery Co. likes to promote from within. This has frequently been the case with non-headquarters employees. But many of these workers have not had the opportunity to earn college degrees, which would be helpful to their careers long-term.

So last fall, Brookshire launched WAFC's retail management certificate program. The launch followed successful implementation of the WAFC's Food Industry Executive Program for headquarters executives several years ago. While the certificate program does not guarantee advancement, Rick Rayford, president and CEO of the Tyler, Texas-based chain, says he has seen a marked difference among people who have completed WAFC's classes. One of the certificate program's first graduates has already been named store director.

"The Food Industry Executive Program has been tremendous for our high-potential employees," says Rayford. "We've seen leaders mature and distinguish themselves. So when we learned about the retail management certificate program, we wanted to offer the opportunity to employees as well. Because we strive to develop future leaders in all areas, it's awesome when we can promote from within. However, that's not always possible. The most important thing is to make sure we put the right people in the right roles. We don't lose sight of that."

Rayford believes retail management and communications are two of the most valuable skills students learn from the certificate program. "It's imperative that store managers understand the basics of business, such as how to manage expenses and labor, what drives sales, inventory control, etc. But it is equally important that they present themselves well verbally and in writing."

In the fall of 2012, 113 people enrolled in the certificate program, the largest class the WAFC has seen. The following spring, the number swelled to 150. Today, enrollment stands at more than 175. The program is open to all non-headquarters employees.

Brookshire also has had three employees graduate from the Food Industry Executive Management Program, and more than 10 additional employees are enrolled. Graduates include Kenny Holt, executive vice president of human resources. Holt's experience kindled the company's further interest in the WAFC.

"He thought it offered topics relevant to our business and that it was a good developmental opportunity for up-and-coming leaders," says Rayford. "He appreciated the exposure to a more global view of business and the opportunity to network with others in similar roles."

Brookshire enrolls people in the executive program who hold director- to VP-level positions and have growth potential. Participants come from "all facets of operations, from accounting to store management to human resources," says Rayford. "We try to maintain a good balance."

Brookshire also offers an internal Brookshire University initiative that covers everything from cashier certification to interviewing skills, says Rayford. It recently launched LEARN (Leadership Empowerment and Resource Network), a complementary online course.

Rayford says such programs sharpen Brookshire's competitive position by ensuring that all levels of employees understand the industry and how to meet customers' needs in its 72 stores. "We're more competitive because employees are more engaged and have a sense of fulfillment that increases loyalty and keeps morale up."

Rayford also believes further education keeps employees up to date in technology and other constantly changing areas. "Regardless of chain size, we must keep pace. We have to provide what customers want and need. To do that, we must stay current with technology, industry trends, assortments and marketing promotions."

It's too early to tell to what degree the certificate program will impact business and employee retention. What is clear is how employees feel about their employer's investment in them.

"Right now, results are more personal in that employees are excited about returning to school and about the company providing this opportunity," says Rayford. "I've received notes and phone calls from many who said they couldn't afford school or that they never intended to go, and now they're open to career possibilities."

STATER BROS.: FROM BAG BOY TO CEO

At 13, Jack Brown began bagging groceries at a Stater Bros. supermarket. More than 30 years later, he is the company's CEO and chairman. His is also a prime example of a corporate philosophy that involves nurturing and promoting people from within the organization.

Stater believes this is the only way to steep employees in the company's customer-centric corporate culture. While the process involves investing time and money in education and training, it appears to pay off. In its 77-year history, the $3.9 billion company has never had an unprofitable year. Brown calls this sequence of events ROP, or "return on people."

"There's a long tradition at Stater of training our people. If you look at a balance sheet, you have return on assets, return on sales. We think ROP is the most important. That affects everything else. It's like investing in brick and mortar–if a store needs a new roof, you're not going to wait until it falls apart. As we invest in people, we're investing in building a better company."

Ninety percent of management has worked its way up the corporate ladder. Stater's overall turnover rate–excluding part-timers–is just 8 percent. Brown says this is "the lowest in the industry."

Team building and human relations are the cornerstones of the San Bernadino, Calif.-based retailer's strategy. They are also two of the most important concepts taught in WAFC's classes. In addition, Stater Bros. runs internal programs that address how to be a better manager or supervisor and include a meat-cutting certification class.

"We're a team, and you have to learn how to help the other person do a better job. We're also about serving people–for those who don't want to serve people, it's not the place to be. The better our people, the better service we give at store level."

Brown insists on reading every customer letter that comes in. While he occasionally hears complaints about pricing or store layout, he says he "can't remember one complaining about service. And we serve 3 million customers per week."

The company will sponsor any employee who wants to take the WAFC courses, including truck drivers, six of whom have done so. Brown believes that understanding how the company works helps employees do a better job. It also makes them feel like part of the entire team and process. "Our philosophy is that if our people can't get better, we can't get better. And there can't be equal opportunities in life until there are equal opportunities in education."

For those employees who pursue four-year degrees, Stater makes sure it is aware of their accomplishments. If an employee receives an accounting degree, for example, a notation is made in his or her HR file. When there is an opening in accounting, the person is informed about it.

Stater posts all job openings and educational opportunities on bulletin boards in its 166 stores. But the best way of promoting company opportunities is by example. "Everyone knows the store managers started at the bottom bagging groceries," said Brown. "If you work hard, you can get ahead in this industry."

Northgate Markets: A Changing World

Thirty years ago, Hispanic supermarket chains began cropping up in California and the Southwest to serve a burgeoning immigrant population. They emphasized ethnic ambiance, language, bulk produce displays and the "cook from scratch" ingredients this group demanded.

Today, immigration has slowed and the Hispanic population has become more diverse and assimilated. But many traditional Hispanic supermarkets have not changed. Some have subsequently closed or are bankrupt. One exception is Northgate Markets. Over the past six years, the 40-store chain has more than doubled in size. It has also tweaked its merchandise mix by offering more convenience foods alongside traditional offerings.

Northgate's employees understand the value of change and staying on the competitive edge. From their first day on the job, they learn about retail strategy through internal and external education programs. Many move up the corporate ladder. Ninety percent of managers, for example, worked their way up from positions like cashier or box boy. Some barely spoke English when they started.

"Education allows employees to increase their level of engagement and participation in the overall business," says Oscar Gonzalez, co-owner, co-president and chief operating officer. "This creates a huge competitive advantage that is very tangible. The better educated an individual is, the better the chance of success, whether it's opening a store or starting a new division."

Gonzalez believes employee growth should parallel growth of the chain. But the latter cannot exist without the former. "It's common in the food industry to promote from within because you get better engagement. The best in class really follows this model. Whenever we consider growth, we consider growth of people. We plan ahead, looking over the next three years at how many stores we plan to open and making sure we have the talent. Sometimes we decide not to open a store because I'm not ready with the talent I need."

An internal program called Northgate University focuses on leadership and skill development. About eight years ago, Northgate also began enrolling people in WAFC's Retail Management Certificate Program. Since then, more than 500 people have taken the course. About a dozen higher-level employees, including Gonzalez, have taken the USC Food Industry Management Program or USC Food Industry Executive Program. Northgate also provides English as a second language instruction.

For many employees, taking classes marks the first time anyone in their family has been involved in formal education. This is important in a Hispanic community where education rates are much lower than among the general population, says Gonzalez.

"Our people are hungry for education. But frankly, many have no idea how to start. Education is not only a way to get on a career path, it helps improve the lives of families and future generations. When children see mom or dad up late doing homework, it has a transformational influence."

A good number of employees go on to pursue college degrees. One success story involves a Mexican-born woman who started as a box girl. "She didn't even speak English," says Gonzalez. "She took an ESL [English as a Second Language] class, then the community college program. She went on to get her Bachelor's degree and graduated with honors. She now heads the process improvement department, an important part of business."

Some retailers may believe it is a waste of money to educate employees who may move on to other jobs. But Gonzalez said his employees feel valued and understand that the company will continue creating opportunities. "We see very little dissention among people who go through the program. What happens is the opposite–they invest in themselves through education. As we continue to grow, that accelerates their career path."

The former chief editor of several publications, Debby Garbato is an independent business journalist and research report analyst who has covered retail for 25 years.