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Stew Leonard’s Mulling Tough In-Store Choices

Stew Leonard’s has a problem of its own making.

Years ago the legendary Connecticut-based retailer decided to communicate its customer-first ethos at the entrance of each store through a principle etched on a three-ton granite rock:

“Rule #1: The Customer is Always Right.”

“Rule #2: If the Customer is Ever Wrong, Re-Read Rule #1.”

With this high ideal front and center, it raises the stakes when making important decisions that take into account what’s best for the customer. Recently the retailer has grappled with this, as outlined by its president and CEO, Stew Leonard Jr., during a panel discussion at the American Bakers Association (ABA) Convention in Scottsdale, Ariz.

I moderated the panel and you can read a story about it here. There are more stories about Customer Centric throughout this issue. 

Because ABA is a baking event, Leonard noted the retailer is considering changes in some longtime baking practices, such as whether to continue making scratch product. While this involves primarily financial considerations, the retailer has to do right by the customer too. 

“We talk about, should we outsource it, because suppliers are doing a great job sending great finished product, and all we’d have to do is bake or boil it,” he said.

Similarly, in planning a new store, the retailer is mulling whether it could change the bakery’s size requirements by reducing some activities. “Do we have to produce and make our own muffins and cookie batter in the back room?” he asked. “Maybe we could avoid that in the future?”

Moreover, decisions on whether to raise prices, which goes to the heart of customer relationships, are becoming more difficult in the face of higher commodity costs and flat bakery sales, he said.

Even customer complaints that might seem beyond the norm have to be taken very seriously. Recently one shopper asked for a free toaster oven because hers caught fire from a fresh tortilla she bought at Stew Leonard’s. Leonard realized the shopper’s main concern was to warn other customers, so he instead promised to re-label the product if it ever happened to someone else, which satisfied the customer.

One lesson from these struggles is that decision-making should be targeted according to store and customer groups, he said.

“It’s important to decentralize so your people can relate more to the local market than the mass market,” Leonard said.

That got me thinking that maybe the rock should instead say, “The Customers Are Always Right, Every One of Them.”

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