“We make a living by what we get, but we make a life by what we give.”
This quote by Winston Churchill could just as easily come from Hank and Doug Meijer, co-chairmen of the western Michigan-based retailing powerhouse that bears their family’s name.
A 222-unit large-format chain that ranked 19th on Forbes’ most recent list of America’s largest private companies, Meijer’s family-crafted, one-stop-shopping, large-store experiment, launched by its founding fathers in 1962, has emerged as a venerable Midwest mainstay and innovative supercenter dynasty.
Sitting at eighth on Progressive Grocer’s Super 50 ranking of the nation’s top food retailers, with 2014 revenues topping $15 billion, Meijer has now earned further bragging rights as PG’s 2015 Retailer of the Year. The company last received this honor in 2006, and the great strides it has made in the intervening years make it eminently worthy of recognition once again.
Following a course of steady growth and commanding strong affinity with its core base of Michigan shoppers, Meijer has expanded into six Midwestern states and employs more than 65,000 associates. In tandem with its measured growth, the retailer has invested hundreds of millions of dollars over the past few years in new and remodeled stores, expanded distribution facilities and new technology to help serve its customers better.
A fierce, nimble competitor, Meijer exhibits many hallmarks of a company setting the pace for its peers. Guided by a keen focus on the five Ps — product, presentation, promotion, place and, particularly, price — Meijer continues to gain market share and fine-tune the “retail format of choice.” Yet as it grows, its guiding ethos — to remain true to the simple philosophy that if you take care of customers, team members and community, they’ll take care of you — mirrors its stance as a conscientious company that has embraced the importance of supporting the neighborhoods where its customers and team members work and live.
“We were fortunate to have a dad and a grandfather who ingrained into us early on the importance of giving back to support the communities where you do business,” Doug Meijer says, “and it just keeps on developing and morphing into something bigger and better as we grow — not because it’s the right thing to do from a business standpoint. It’s just simply the right thing to do.”
Doug’s equally unpretentious brother, Hank, is also quick to credit their parents, Fred and Lena, for grounding them in the awareness that one’s ultimate impact is defined not by what can be sold, but what can be done, to better the lives of its family of associates and the communities they serve.
“We always strive to bring innovation and appreciation to the Meijer shopping experience,” Doug explains. The entrepreneurial spirit that sparked its first store, he continues, “has now extended to the more than 65,000 team members, who continue a rich tradition of bringing easy, affordable solutions to our neighbors.”
A definitive leader in a retail landscape under siege, Meijer’s culture of thrift, stemming from an abiding penchant to save customers money by seizing the latest innovative ways to do so, is integrally woven in the fabric of the self-distributing retailer, which has steadfastly strived for continuous improvement to keep its big-box format efficient, interesting and relevant.
At the same time, the privately held retailer’s dual family leaders, in tandem with President J.K. Symancyk, stalwartly seek to instill their purpose-driven mindset, homespun Midwestern sensibilities and an empowered sense of stewardship into the extended family of Meijer associates, to deliver on the company’s enduring customer-centric mission.
“One of the things that’s been core to our growth is that from a very early stage, we recognized that even though we are a family company, having the name ‘Meijer’ bestows no special talents on anyone,” declares Hank. “We’ve had a strong tradition of professional leadership with nonfamily leaders, which we enjoy today with J.K. and his team. Encouraging leadership and talent from other backgrounds has really positioned us to continue growing as a private company, and is an important part of who we are.”
An Ear for Local
Listening to shoppers is a key component in Meijer’s successful standing as a major player in an ever more crowded field of retail formats. From its landmark stores in Michigan, through expansions into Ohio, Indiana, Kentucky and Illinois, to its latest stores in metropolitan Milwaukee after entering Wisconsin earlier this year, Meijer has demonstrated a commitment to its core customers and an understanding of the cross-channel world in which they live — and an ongoing commitment to providing quality goods to consumers hungry for value.
“I think every retailer talks a good game about localization, but it’s always harder than it seems,” Hank admits. “It’s an ongoing process of listening to our customers for what brands matter most, what products they’re looking for in a specific market. It’s an ongoing challenge.”
Upon being formally recognized by the Michigan Historical Society as the nation’s first supercenter this summer (see sidebar on page 38), Hank paid tribute to the opportunistic vision of his grandfather, Hendrik, and his father, Fred, “to bring families more retail choices [by] breaking down traditional barriers” between selling groceries, clothes and hardware. The company’s founding father-son team, he added, “helped revolutionize retail and left us an incredible legacy to build upon.”
And build they have.
Meijer’s present store fleet ranges in size from 110,000 to 250,000 square feet, each carrying as many as 350,000 SKUs and operating 24/7, 364. In addition to national brands, Meijer has judiciously developed some 30 private label brands throughout fashion, hard lines, spirits and grocery, with 3,900 exclusively using the Meijer moniker.
Thyme to Learn
Meijer’s continued strategic expansion, most recently into Wisconsin, and job creation in its financially struggling home state, particularly in downtown Detroit, have given the regional retailer ample platforms on which to grow and learn. So, too, has its ongoing investment in the natural and organic segment, underscored by its stake in the rapidly expanding Fresh Thyme upstart, which is quickly catching fire as a one-to-watch specialty-format grocer.
While there’s no direct connection between Meijer and Fresh Thyme, the established retailer’s major stake in the healthy-lifestyle chain is a natural extension of its studied journey toward continued retail enlightenment, notes Hank. “We are completely separate businesses, with completely separate operations. We see our role as part of an organic experiment to learn, but not to smother, to gain knowledge, but not to stifle creativity.”
In addition to cross-pollinating its retail brain trust with new platforms on which to strategize and stretch, Meijer seeks the most impactful ways to build meaningful connections with stakeholders in the communities where its stores are located.
With an average 450 team members per store, the retailer gets behind community activities while assisting nonprofit organizations through corporate and store donations. In addition to creating strong relationships, the chain offers countless volunteer hours, and abundant financial support, to a host of organizations, including Habitat for Humanity, Junior Achievement, the American Red Cross, Children’s Miracle Network, March of Dimes and the American Cancer Society, to name just a few.
Meijer’s support for a wide variety of nonprofits is also evidenced by its donating more than 6 percent of net profit to charity each year and sponsoring hundreds of community events that its customers hold dear.
The hallmark of its grass-roots outreach efforts is its Simply Give program, which since November 2008, has helped neighborhood food pantries keep their shelves stocked. The company’s signature hunger relief program has generated more than $16 million, thanks to the continued generosity and support of Meijer customers, team members and food pantry partners committed to helping feed hungry families. The 2015 spring campaign was the most successful in the program’s history: Customer donations, combined with a contribution from Meijer, pushed the total to more than $1.7 million.
No mention of Meijer’s role in bettering the communities it serves would be complete without a mention of The Meijer Foundation, which was established in 1993 as the Michigan Botanic Garden Foundation. Formed with the single purpose of providing an endowment fund to support the Frederik Meijer Gardens & Sculpture Park, including the Lena Meijer Children’s Garden, the foundation now also supports other local recreational causes and charitable efforts. Its legacy is felt most profoundly, however, in Meijer’s hometown of Grand Rapids, Mich., where the 132-acre botanic garden and outdoor sculpture park serve as a first-rate venue for local residents and visitors to further their appreciation of the natural environment and the lively arts.
“Dynamic and measured” is how Hank describes his company’s growth strategy, “carefully thinking out, market by market, how to continue our expansion.”
Symancyk elaborates: “It really is a customer-first strategy that leads us into whatever our next investment will be. There’s no master plan. We really are looking at how to serve each community that we have the opportunity to be in — one community at a time, one customer at a time.”
If the axiom “slow and steady wins the race” is true, then Meijer appears well poised for victory, especially in its approach to finally entering the Wisconsin market. Preceded by a distribution center just north of the Illinois state line, the retailer opened four stores in suburban Milwaukee this past summer, and has more on the way.
Until this year, geography and its impact on supply chain operations kept Meijer away from America’s Dairyland. “The closest major metropolitan area to where we are, here in Grand Rapids, is Milwaukee; we just have this little lake in between,” Hank says. “We rely on supply chain for the freshest product, so we had to work our way around the lake to get there. Wisconsin has a lot of similarities to Michigan: a lot of medium-sized cities, and a combination of manufacturing and agriculture that makes us feel right at home. Lake Michigan is the only reason we weren’t there a generation ago.”
Despite being confronted with an unusual problem during the Wisconsin grand openings — it was accused of violating Wisconsin’s Unfair Sales Act, a Depression-era statute meant to prevent retailers from selling goods below cost and undercutting small businesses (which as it turns out, worked in Meijer’s price-impact favor) — Meijer’s four newest stores have been very well received.
“We’ve had the opportunity to build a relationship in that community long before we opened our stores, which I think has probably helped us to think about each store differently,” Symancyk says. “I’m proud of what our team has done, and very grateful that the community has been so welcoming to us.”
The expansion also offered Meijer the opportunity to work more closely with Wisconsin-based suppliers that had already been providing product to the retailer for many years.
“We have a lot of longstanding relationships in terms of being a customer to so many of these great companies,” Symancyk affirms. “The opportunity to actually be able to reciprocate is something that I don’t know that we fully appreciated before we came in. We didn’t necessarily think about what it might mean to some of our partners for them to be able to actually shop our stores.”
Frank Guglielmi, Meijer’s senior director of communications, cites great feedback on social media from transplanted Michiganders now living in Wisconsin, as well as Wisconsinites who shop at Meijer while vacationing in Michigan.
Meijer plans further expansion in Wisconsin, “both building our presence in Milwaukee and also looking at sites in Green Bay and other, smaller cities in the north, down to the Illinois border,” Hank says. “We’re very active in expanding in Wisconsin.” Completely content with its semi-compact six-state footprint, he attests: “We don’t have any grandiose national expansion plans. We will continue to build out between the Appalachians and the Rockies and continue to expand in the heart of the country.”
Beyond catering to different customers in new states, Meijer has developed new stores targeting specific demographics in its home state, such as two urbanformat stores in economically challenged Detroit.
The Meijer team, however, insists it’s not the format, but rather the assortment, that’s most unique.
“It’s the offering that it’s important to adjust for an individual customer’s and community’s needs and expectations. Those stores in Detroit are 190,000 square feet, just like the stores we’re opening in suburban Chicago,” Hank says.
Symancyk adds: “We really only have one format. What we do is try to make sure that the assortment in any particular store is reflecting what’s most important for each community that we serve. There’s where the variations would be, but the format doesn’t really change.”
Getting that right means keeping up with the pulse of local shoppers to ensure demands are being met, whether in urban Detroit, suburban Chicago or rural Kentucky.
“The determining factor is your people,” Symancyk asserts. “We have the benefit of being a regional company. That means we have a proximity and familiarity with our teams that some companies don’t have. We know our store directors. Our emergent teams had the opportunity to visit all of our stores over the course of the year. There’s some understanding around what might be most important in Fort Wayne, Ind., that’s somehow different than Manistee or Alpena, Mich., or newer stores in Wisconsin. Having that tight sense of communication,” he continues, “is really what we focus on — making sure we’re listening to customers and that we’re empowering our teams to take action on what they’re hearing that we’re doing well or what we’re not doing well.”
Adds Doug: “The customers determine what we sell or what we don’t sell — whatever they ask for or what we see they need.”
Beyond that, Meijer is striving to present its offerings to shoppers in a more meaningful, solution-oriented way.
“That’s where the customer’s changed,” notes Doug. “Our mom used to cook every day of the week. My daughter’s mom barely cooked any days of the week. One thing that we do need to do a better job at is helping the customer plan for that meal, what he or she may want that’s quick and easy and convenient.”
Enhancing the Center of Super
Symancyk concurs, noting that Meijer will continue to up its game on meal solutions, “whether that’s about information, preparation, or the ability to take and go. We really do believe that beer, wine and liquor are the kind of growth categories that are important to our customers, and also provide that connection to local that’s really important.” Health and wellness is also a priority, he says: “That really ties our worlds together across both drug store and food — it’s something that we’re mentally focused on.”
It’s all about Meijer’s core shopper, Symancyk explains. “One of the differences in a supercenter environment is that our customers walk in and they have a bigger basket,” he says. “The frequency [with] which they come to our store may be a little less, but the amount that is on their list when they walk in the door is a little more. That adds up to a little bit longer shopping trip. We believe the convenience of being able to get everything under one roof makes that valuable. That also means that she may not be as likely to want to sit down and have dinner in our store.
“We’re much more focused on how to provide that experience of foodservice in a way that she can take it home and save time putting dinner on the table for herself and her family,” he continues.
This realization and resultant focus have pushed Meijer to develop digital initiatives, including a pilot click-and-collect program, Meijer Curbside, that’s being tested at a Grand Rapids store not far from corporate headquarters.
“The digital age has really increased expectations from our customers, and really the public at large, around accessed information and really redefined convenience,” Symancyk says. “We are really focused on how do we help bridge that gap, and really look at digital being added to our shopping experience — whether it’s about product information or how we deliver value through [loyalty] programs like mPerks. How do we sync up with the various missions in a way that we can be more responsive to growing needs in areas like health and wellness, nutrition? Those are the places where our team’s working intently to try to be more responsive to customers,” he adds, noting that such efforts aim to “solve a problem [shoppers] have before they even know they have it.”
An early adopter of digital engagement, Meijer launched mPerks in 2010, which to date has helped more than 4 million customers clip 1 billion-plus digital coupons, with total savings eclipsing $400 million over the past five years. With the popularity of digital coupons and shopping apps trending at all-time highs, mPerks has evolved into a multifaceted program including personalized rewards and digital tools that help customers plan an entire shopping trip in advance.
“Interestingly enough,” Symancyk observes, “every brick-and-mortar retailer is trying to figure out how to find a virtual presence, and every virtual retailer is trying to figure out to create a brick-and-mortar presence. We’ve tried a little bit of everything when it comes to digital. What we’ve learned is that customers don’t necessarily think about a channel — they think about a retail partner brand. In our case, they know us for our stores, they know us for the trips that they make.”
The right solution, he contends, is “to build out from our stores. Continue to find new ways to innovate and deliver more convenience to our customers.” Meijer Curbside, he says, is the first step in a broader, evolving plan to determine “if that’s where our customers want to take us, or want us to take them. I believe that it will be, eventually.” As always, though, the fate of the program will ultimately boil down to a matter of “economics and convenience, and how that is going to play in the variety of communities that we serve.”
As many traditional merchants are discovering as they feel their way through this new shopping reality, the solution appears to be how best to leverage historic retailing competencies with emerging technologies, and one of the keys to that is a well-trained and knowledgeable team of associates guiding shoppers on the path to purchase.
“The biggest part of what separates us is our team — our team members and the experience that they provide customers when they walk in the door,” Symancyk says. “A nameless, faceless virtual interface was never going to be as powerful for Meijer. The ability to add to that service experience by delivering convenience from the store to home, as opposed to from the home to the store, is part of the balance that I think we found. It really works for our business.”
While many traditional grocers are seemingly ceding general merchandise to auto-replenishment e-tailers to concentrate their full strengths in fresh food instead, Meijer — which offers a full array of general merchandise, along with fresh food and groceries — isn’t throwing in that towel. Remarks Doug: “We’d like them to ask us to pick their diapers for them.”
Every department, regardless of products, presents an opportunity to own the customer relationship, Symancyk notes. “There are lots of intrusive, competitive forces — some digital, some just new formats and new competition, and they’re coming in to try to stake their claim to serving those customers better,” he says. “I go back to what my mom told me: Rarely is doing something simply because everyone else is doing it a good idea. Look at what makes your relationship with customers special, and then [figure out] how can you use technology to enhance that. To deliver better value, to deliver greater convenience — that’s the question every retailer has to answer in their own way to figure out how to be most competitive. That’s against a sea of competitors, not just digital ones.”
Strengthening the Core
In fact, as much as Big Data may tell us that shoppers have changed, there’s a handful of core demands that has remained constant and that Meijer strives to own on a daily basis.
“I don’t think shoppers have changed as much as it sounds like they have,” Doug muses. “People still want clean stores and a good value, and still want to be treated” in a way in which their patronage is acknowledged and appreciated.
“I think that’s right,” Symancyk agrees. “One of the first big evolutions of this company was the birth of the supercenter. What drove that is not altogether different than what customers are looking for today, which is better assortment, better choices, more convenience and better service. There are more ways that we have the opportunity to deliver that to customers. As the world continues to evolve at a rapid pace, there’s going to be even more choices that customers have. It all comes back to friendly service, great assortment, great value and a convenient shopping experience. Those are the drivers that matter today, as much as they did when we started the company 80-plus years ago.”
Beyond that, it’s meeting the unique needs of each community. “We regard everybody as a potential customer,” Hank says. “We don’t have a certain demographic, income level or characteristic that says ‘that’s our customer.’ I think that’s where we’re differentiated from many of our competitors.”
Moreover, he adds, with food marketing increasingly fragmented among multiple channels, the same can be said for Meijer’s retail contenders: “Everyone is a competitor.”
Unlike most traditional grocers, Meijer has the further task of balancing its food and GM categories to ensure customers are getting exactly what they need. “That’s another area where the customer will define that for us,” Doug affirms.
Meijer’s store leadership structure defines responsibilities over each category, and it’s up to each store to drive its individual business.
“I don’t know if we do have a balance,” Symancyk says. “I think most customers walk in our door with their grocery list, their needs for the week being the primary driver of that trip. What we really look to do in general merchandise is to have the right assortment, the right value on those things that they need. Then, that we’re really paying attention to deliver good, better best in a way that truly surprises and delights customers who are in our store. We love the idea that someone is going to be at a dinner party or a ballgame, and be asked the question, ‘Where did you get that?’ and the answer is Meijer, and the reaction is, ‘Wow, I didn’t know Meijer had that.’ That’s really a big driver of our general merchandise strategy.”
Ultimately, Meijer wants folks to “go away happy, satisfied and well taken care of,” Doug says, and, Hank adds, “really [feeling] good about having enjoyed great values.”
Symancyk elaborates: “I think when we do what we do well, customers walk away feeling like we’re looking out for their best interests. [If] they experienced a friendly atmosphere with a lot of team members oriented toward helping them, then we feel like we’ve done our jobs.”
Historically, Meijer was a pioneer in cross-docking. A generation ago, that was a marvelously efficient system and a highlight of supply chain. Now, technology and manufacturing are driving the change. Addressing the latter, Meijer has opened a second dairy plant to ensure a consistent supply of milk to its stores. As to the former, it’s about energy efficiency, and better partnering with suppliers.
“We’ve been good at high-volume, fast-moving merchandise,” Symancyk says. “Over the last five to 10 years, we have evolved to hold onto that strength, and to also be better at the right pace of replenishment. We’ve looked at energy utilization across our fleet, anything we can to help be more efficient and lower costs so we can pass that value to our customers. That’s paying dividends and helping us to be even more competitive.”
Great Lakes Retailer
Meijer relishes its role as a booster of goods produced in-state, from Michigan stone fruits to Kellogg cereal to beers from Grand Rapids’ vibrant microbrewing community.
“Michigan’s a huge food-producing state,” Hank affirms. “The variety of produce is second to California. We’ve got a number of major food processors in the state.”
Meijer expects to eventually extend this pride marketing to other states where it operates.
“When we opened the first stores in Wisconsin, we probably spent more time prior to the Milwaukee and southern Wisconsin openings understanding the market, working with the community, and that’s gone very well,” Hank recounts. “We’re concentrated in now just six states, and we have every expectation that we will be local in each of those markets. We operate on a saturation model. We seek to serve everybody in the communities you’re in. That intensity means that we’re going to be a part of that community, and figure out every way we can to understand its needs.”
When asked to discuss Meijer’s leadership and associate empowerment efforts to better serve shoppers, Symancyk says that the company has spent ample time digging further into how to broaden its reach. “One of the benefits of being a smaller company and growing methodically over time, is that team members inherently have great relationships with each other. There’s a long sense of history and experience to draw upon that builds a closeness, like that of a family,” which he believes has been integral to the company’s growth.
Today, however, Symancyk notes, “We’ve gotten to a size that that makes it a little bit harder to do, so we are really focusing heavily on investing in our leaders’ abilities to train and develop new leaders.”
The one thing that holds it all together, according to Symancyk, “is a really tight sense of values that are consistent across the organization.” Of the company’s longtime open-door policy, he observes, “The great benefit that the three of us have, as do so many leaders across the company,” is direct knowledge of, and interaction with, customer sentiments.
Characterizing the convoy of e-mails and phone calls that he and his cohorts personally review, discuss and ultimately aim to resolve as “a real blessing,” Symancyk contends that keeping tabs on direct customer feedback “enables us to learn so much. We’re able to take action and respond accordingly,” either when missing the mark or figuring out ways to improve. “That’s part of what a great family environment is all about.”
Speaking of which, when asked what he believes best helps sets Meijer apart from other employers, Symancyk replies, “As someone who’s not a family member, I can speak honestly about the fact that the beautiful part about being a member of this team is that it’s a private, family-held company,” with a consistency around an incontrovertibly “legitimate mission” to serve customers. “The more constituents you have to serve, the more you tend to have to make concessions and trade-offs,” he explains, “but the one thing that makes me most proud and grateful for the opportunity to be a part of this team is that there is no ambiguity around what constituents are most important for us. It’s our customer.”
Consequently, Symancyk continues: “Team members are empowered to do the right thing — not just because it’s the right thing for a moment, but what’s going to be the right thing in the best long-term interest of serving our customers. A big part of what makes our days great is the ability to interact with so many customers and make a difference in their lives. Knowing that you have that level of support, and that you are surrounded by 60,000-plus team members who are oriented the same way, is a really cool thing to be a part of.”
Dynamic Growth Opportunities
Hank adds further color to why he thinks Meijer is an ideal organization for long-term career seekers: “If you start with the baseline, that we’re a very fast-paced, exciting, varied business, there are three things that come to mind for me. One, certainly, is a place filled with dynamic growth opportunities, which [enable employees] to take on greater challenges and responsibilities,” while being promoted and recognized as well.
The second element, Hank continues, is a palpable esprit de corps that imparts “feeling good about what you do” within “an ethical framework built on core values of doing something meaningful … as part of an organization that is doing many things that are important in the communities that we serve.”
The third noteworthy item is confidence in fellow co-workers, which, he says, “is something we really value about our culture.
“I’m certainly not objective about this topic,” he readily acknowledges, “but it’s the people I work with, in the sense of a cohesive enterprise, who serve as a constant reminder that we’re part of doing something that goes beyond selling product. It’s not only a crucial, but also an essential service. I’d like to think that as we expand in new communities, we will add something of value — that we’re not just another big box on the highway — with the difference being our people. That what’s most important to me about working at Meijer.”
Doug enthusiastically concurs. “I think one of the more interesting things about working here, especially for new staff members, is when introductions are taking place. And a key question that’s invariably asked is: ‘How long have you been at Meijer?’” In many cases, he adds, responses range from “20, 30 to 40 years — numbers which are simply amazing” in an industry notorious for high turnover.
“Our administrative assistant has been here for more than 55 years, and continues to do a great job,” says Doug. “There are many others like her who’ve been here for 40 and 50 years, and it’s just really gratifying to be a part of.”
Symancyk echoes the sentiments. “The inspiration derived in knowing that when we do what we do best, we make life better for our customers, for our team members and for our communities — it’s something that’s very powerful.”
What’s more, “it’s coupled with being able to be part of a team filled with great people, which is a true winning combination,” he notes. “I had one person on my team refer to working here as ‘retail vacation,’ because we really get the chance to focus on the fun parts of the job,” like helping customers.
Concludes Symancyk: “We get to really balance and focus on those things that are most meaningful, without the minutiae. And it’s a really big part of what gets people excited about being here.”
“Encouraging leadership and talent from other backgrounds has really positioned us to continue growing as a private company, and is an important part of who we are today.”
“The customers determine what we sell or what we don’t sell-whatever they ask for or what we see they need.”
“It really is a customer-first strategy that leads us into whatever our next investment will be.”