‘New Ways’ Paradigm Benefits Wegmans, Hy-Vee

LAS VEGAS In the latest example of its ongoing efforts to collaborate with suppliers, Wegmans Food Markets is consulting with Frito-Lay and other CPG companies on market research into new markets where the chain plans to open stores, said Peggy Riley, human resources project manager, Wegmans. Speaking at a workshop at the Food Marketing Institute Show here earlier this month, Riley said that before

LAS VEGAS — In the latest example of its ongoing efforts to collaborate with suppliers, Wegmans Food Markets is consulting with Frito-Lay and other CPG companies on market research into new markets where the chain plans to open stores, said Peggy Riley, human resources project manager, Wegmans.

Speaking at a workshop at the Food Marketing Institute Show here earlier this month, Riley said that before opening stores in a new market — such as the Boston region, which it plans to enter in the fall of 2011 — Wegmans, based in Rochester, N.Y., tries to gain an understanding of consumers in those areas and the availability of labor.

“Who better to understand new markets than trading partners who are already serving those customers and living, working and playing in those areas?” she said.

The collaboration with Frito-Lay is an extension of Wegmans' “New Ways of Working Together” program in which it partners more closely with trading partners to make the supplier-retailer relationship more productive. The program emphasizes satisfying consumer needs through joint long-term planning and agreeing on common goals.

Two years ago, the two companies began to focus on human resources, seeking uniform ways to motivate and compensate employees at retail and manufacturing organizations so that they are not at cross-purposes in business interactions. Among the questions addressed: How to build a talent pipeline? What is the talent gap? How to drive employee engagement? How to develop leaders?

But perhaps the most significant take-away from the discussions, Riley said, was the “huge opportunity” in leveraging Frito-Lay's market knowledge as Wegmans explores opening new stores in the New England area.

Wegmans and Frito-Lay also sought to establish “common goals and measures” for their ongoing collaboration — a hallmark of the New Ways model — in addition to sales growth. One is reducing injuries of employees who handle products. Another is engaging employees who work outside of stores. “There's a lot of excitement at the store but how do we bring that excitement back to the folks at the retailer and vendor so they keep their focus on the end consumer and appreciate how meaningful work is at every spot along the supply chain?” Riley said.

Hy-Vee's foray into New Ways of Working Together has included an “efficient promotion” initiative with Procter & Gamble, said Jay Marshall, vice president, Center Store, Hy-Vee, who also spoke at the workshop.

The initiative was designed to generate funds to pay for “Smart Boards” for schools. A Smart Board, which costs between $3,000 and $5,000, is a large interactive whiteboard that can be employed as an instructional tool instead of a traditional blackboard.

The promotion, conducted for 90 days last fall, was designed so that sales of specific P&G items would generate donations toward the purchase of a Smart Board for one school in every community served by Hy-Vee's more than 220 stores in the Midwest.

Under the program, every $20 spent on P&G products at Hy-Vee accrued 100 “smart points.” Shoppers could then donate the points to the school of their choice on www.hyveesmartpoints.com [4]. The schools near each store with the most points received the Smart Board.

P&G sales at Hy-Vee were up 10% during the promotion, said Patrick Calhoun, sales manager, North Central Region-Fabric & Home Care, P&G. The average transaction with P&G products was $125, vs. an overall store average of $42, he added.