Last week, The Raley’s Companies announced that Steve Mayer has been elevated from COO to president of Bashas'. Mayer will lead the Bashas’ organization in Arizona and New Mexico, including all store and distribution center operations, as well as sales and merchandising. Mayer is a veteran of the industry and joined the Bashas’ leadership team in 2020. He will report to The Raley’s Companies President and CEO Keith Knopf and serve on the Enterprise Leadership Team.
Progressive Grocer spoke to Mayer about his new role, the company's new Support Center headquarters, and the state of grocery retailing now.
Progressive Grocer: Congratulations on your new Support Center.
Steve Mayer: Thanks, we’re excited about it. We had two different office locations previously, one was the original store for Bashas', and then we had an office that was in the distribution facility. And so, we took both of groups of team members and brought them together, so that's been a really, really fun journey.
PG: Steve, how will your new role differ from being COO?
SM: I think the biggest difference is I will have more of a connection to our parent company, The Raley’s Companies, so I will interact more with the CEO and the board of directors. And I'm the voice for the Arizona and New Mexico market, so if we need resources or if we want to do major things, I'm the voice for that. Although, a lot of the local things we do are all here in Arizona, and that's the reason why we're set up that way.
PG: What does your senior leadership team look like?
SM: I have someone over center store. I have someone over fresh. I have someone over the distribution facility. I have someone over real estate. I work with someone in PR. I'm the dotted line into HR, legal, tech, so I have all functions really reporting to me. And there's some dotted lines because there's some shared services. We share legal services across the company, for example, it just makes more sense from being more cohesive. We share HR responsibilities across the enterprise also.
PG: What are the key initiatives for rest of this year and maybe going into next year at Bashas'?
SM: I think the most important thing is, obviously, maintaining a healthy business, everyone would tell you that. But I think one of the big things is really, people development, which The Raley’s Companies is very good at and has given us resources to help us develop our people. We have programs that develop assistant store leaders into store leaders, and now we have programs that identify up-and-coming leaders or team members that want to become leaders.
PG: And you are working with the Western Association of Food Chains (WAFC)?
SM: Yes, they have community college programs, so we're starting to make community college programs available to the folks in our division, and we are investing in our people a lot more than before, so that's exciting. We're doing a lot of work in the digital space that I can't talk about too much, but we're working there, plus a lot of loyalty work, and we're continuing to remodel stores. We remodeled several stores this year, two of them notably on the Navajo Nation.
PG: I know you have partnered with Instacart on delivery and pickup. How's that going?
SM: Grocery e-commerce has slowed down, but it hasn't slowed down to pre-pandemic, and it's starting to grow. I'd say pickup and delivery are both growing pretty well.
PG: What are you learning as you try to tailor your assortments differently in each location now post-pandemic?
SM: Well, it's a different answer, because we have four formats really. We have Food City, we have Bashas', we have Bashas’ Diné, we have AJ's. They're all different, so Food City is value Hispanic, AJ's is experiential, so it's food and experiential. Bashas' is mainstream, and then Bashas' Diné is on the Navajo Nation, so all of them have a different mix. And then all of them, it depends on the community, each of those stores in the community may have a different mix. We really try to be a reflection of the community that we're in, so we do a lot of work around that. We have different structures that support all those different banners, so they're all standalone and they're all supported differently.
PG: What would you say will be the top operational challenge for you in the back half of the year?
SM: There's two top challenges, it's inflation and probably labor. And the reason why inflation, obviously $100 is not worth $100 anymore. We have communities that we're the only ones there, we stepped in when they needed access to fresh food, and we have a responsibility to feed those folks. And so, we have to do it in a way that can stretch their money, and it's been quite challenging. Things are so expensive. I think inflation, we're keeping a close eye it, and we're trying. We're being as creative as we can to not pass costs through to our guests.
SM: I always think a family of four has $100 to spend, and now that $100 could be worth $85 or $90, they still have to feed their family, so it's up to us to do that. And the other part is having labor in the store to support our guests, and that's been a challenge. It seems to be getting slightly better, but I wouldn't say we've solved that issue, and that's going on everywhere.
PG: I know Raley's is doing wonderful things on the value front with promotions.
SM: Yeah, we do value all the time. If you look at Food City, our target customer is the value customer, so we're very, very conscientious about meal building and doing it as efficiently as possible. We also look at time of the month, because time of the month drives things too. If someone gets paid at the beginning of the month, they don't get paid at the end of the month, so how can we stretch those meals?
PG: How is the private label strategy going at Bashas'?
SM: We do have private label and we've done well with it. Integrating with Raley's has actually helped us because they have a very strong private label program, and so we have the ability to leverage both companies together to even get better, so that's been a very successful program for us.
PG: So you're saying that customers are obviously choosing private label frequently over branded?
SM: They are, and you see that in Bashas' too.
PG: Any other key initiatives, perhaps related to reducing operational expenses?
SM: We do have working groups that look at all of our expenses. We always start with not diminishing the guest experience, and then looking at expenses from that standpoint. What we don't want to do as a company is to reduce our expenses at the cost of the guest experience, so we're keeping the guests in the center, and we're looking at everything we can do to reduce expenses without reducing the experience.
PG: What about the state of your supply chain?
SM: I would say that definitely two years ago the supply chain was really problematic. We've made good strides in the supply chain, but we're not there yet. And I would say as an industry, we're getting healthier, but we have a ways to go yet.
PG: You have partnered with Invafresh to reduce waste and increase efficiencies in fresh?
SM: Yes, we have partnered with Invafresh for some time and have tried a few different things with them. It's deployed in all banners in all produce, and we're looking at opportunities to further address shrink. We're doing an automated ordering system for center store, which is different than Invafresh. So, we're definitely excited about that. And we're starting to work with dunnhumby on loyalty. Raley's has been working with dunnhumby for many years, and so we're taking those learnings and we're using them here.
PG: Lastly, how is shrink affecting your operations this year, if at all?
SM: We definitely keep an eye on shrink. We work well with our local agencies that have done a tremendous job for us. And we keep an eye on the layout of the store, where things are laid out, so things that are easily taken, we put it in high traffic areas. We have a task force for retail staff, so we go over and we look and have internal folks that do that. And we work on different ideas all the time to try to help, keeping in mind, at the same time, we don't want to diminish the guest experience either, so. Stealing is a bad thing, but it's a small, small section of the business that we don't want to punish everyone by doing something that wouldn't work. We educate our team members too. Unfortunately, it's part of the business and we just have to keep educating our team members to be on the lookout.