Danny Wegman is on the move.
The chief executive officer of Wegmans Food Markets is taking his Rochester, N.Y., chain not only into new markets, but also into a new format.
After opening its first Massachusetts store in Northborough last year, Wegmans is planning a second unit in that state in Newton. What makes the latter unique is that it’s slated to be half the size of its typical units.
The so-called “urban-style” store will be about 70,000 square feet, compared with Northborough’s 138,000 square feet.
The new format size comes at a time when the retailer continues to expand into new markets.
Along with entering Massachusetts, Wegmans also plans to make a
presence in northern New Jersey for the first time with a planned store in Montvale.
“Wegmans continues to have a measured, but successful geographic growth,” said Bill Bishop, chairman of Barrington, Ill.-based consultancy Willard Bishop.
Part of what makes the chain successful as it enters new markets is its
competitive pricing, especially its new “price freeze” scheme, said Bishop.
Saying it wants to help shoppers keep their grocery budget in shape, Wegmans locked in prices on more than 60
frequently purchased summer items from the end of April through the end of August.
The list is made up almost exclusively of private-label products, including condiments, hot dog and hamburger rolls, marinated chicken breast, Italian sausage, littleneck clams, fresh salad greens, sunscreen and over-the-counter allergy medications.
This summer’s price lock-in immediately followed a similar one the chain ran in the winter.
“Not many retailers have been able to make a strong price statement as
efficiently as Wegmans has,” said Bishop.
An aggressive private-label strategy is also working in the retailer’s favor, according to Don Stuart, chief operating officer, Kantar Retail Americas Consulting, Wilton, Conn. The retailer continues to update its private-label offerings by launching new mainstream and health and wellness items. It recently, for instance, introduced a line of gluten-free private-label items, including pasta and cake mixes.
Wegmans is widely recognized as an industry innovator. The 96-year-old company was No. 1 on Consumer Reports’ 2012 “best supermarkets” list, based on a survey of about 24,000 consumers and has earned a spot on Fortune magazine’s “100 Best Companies to Work For” list for 15 years, placing fourth this year.
What’s more, the chain ranked No. 3 for “branding” on Kantar Retail’s 2011 PoweRanking survey, behind Target and Wal-Mart, and No. 3 for “consumer marketing and merchandising,” following Kroger and Target.
“It’s amazing for a chain of about $6 billion in [annual] sales to have those rankings,” Stuart said of Wegmans’ PoweRanking status. The PoweRanking study highlights manufacturers and retailers that have performed the best in the eyes of their trading partners.
Kantar predicts that Wegmans will grow 8% to 9% in revenue for the next five years, “which is exceptional in the brick-and-mortar industry,” said Stuart.