Produce Department The company prides itself on fresh produce. Produce is replenished as often as 12 times a day. The larger stores have produce sections that are four to five times the size of a produce section in an average super- market. Wegmans offers locally grown produce in season. Wegmans uses a "farm to market" system whereby some local growers deliver their produce directly to individual stores, bypassing the main ware- house. That reduces the company's inventory holding costs and gets the produce into the stores as quickly as possible. Growers may use specially designed containers that go right onto the store floor instead of large bins. This avoids the bruising that often occurs when fruits and vegetables are transferred from bins to display shelves and the need to devote labor to transfer the produce to shelves. Meat Department In addition to large display cases of both fresh and frozen meat products, many stores have a full-service butcher shop that offers a variety of fresh meat products and where butchers are available to provide customized cuts of meat for customers. Meat department employees attend Wegmans' "Meat Univer- sity," where they learn about different cuts of meat and how to best prepare them. They also learn about other items to pair with various meats, and suggest side dishes, breads, and wine. This helps instill a "selling culture" among employees, who often spend 75 percent of their time talking with customers. Wegmans continually analyzes store operations to improve processes. In the meat department, a change from in-store cutting and traditional packaging to using a centralized meat processing facility and vacuum packaging extended the shelf life of meats and reduced staffing requirements in meat departments, reduc- ing costs and providing customers with an improved product. Ordering Each department handles its own ordering. Although sales records are available from records of items scanned at the checkouts, they are not used directly for replenishing stock. Other factors such as pricing, special promotions, and local circumstances (e.g., festivals, weather conditions)-must all be taken into account. However, for seasonal periods, such as holidays, managers often check scanner records to learn what past demand was during a comparable period. The superstores typically receive one truckload of goods per day from the main warehouse. During peak periods, a store may receive two truckloads from the main warehouse. The short lead time greatly reduces the length of time an item might be out of stock, unless the main warehouse is also out of stock. The company exercises strict control over suppliers, insisting on product quality and on-time deliveries. Inventory Management Wegmans uses a companywide system to keep track of inventory. Departments take a monthly inventory count to verify the amount shown in the companywide system. Departments receive a periodic report indicating how many days of inventory the department has on hand. Having an appropriate amount on hand is important t depart- ment managers: If they have too much inventory on hand, that will add to their department's costs, whereas having too little inventory will result in shortages and thus lost sales and dissatisfied customers. Employees The company recognizes the value of good employees. It typically invests an average of $7,000 to train each new employee. In addi- tion to learning about store operations, new employees learn the (continued) Chef's www.wegmans.com Wegmans Food Markets, Inc., is one of the premier grocery chains in the United States. Headquartered in Rochester, New York, Wegmans operates over 70 stores, mainly in Rochester, Buffalo, and Syracuse. There are also a handful of stores elsewhere in New York State and in New Jersey, Pennsylvania, and Virginia. The company employs over 37,000 people, and has annual sales of over $3 billion. Wegmans has a strong reputation for offering its customers high product quality and excellent service. Through a combination of market research, trial and error, and listening to its customers, Wegmans has evolved into a very successful organization. Its sales per square foot are 50 percent higher than the industry average. Superstores Many of the company's stores are giant 100,000-square-foot superstores, double or triple the size of average supermarkets. You can get an idea about the size of these stores from this: they usually have between 25 and 35 checkout lanes, and during busy periods, all of the checkouts are in operation. A superstore typi- cally employs from 500 to 600 people. Individual stores differ somewhat in terms of actual size and some special features. Aside from the features normally found in supermarkets, they generally have a full-service deli (typically a 12-meter display case), a 50-square-meter fisherman's wharf that has perhaps 10 different fresh fish offerings most days, a large bak- ery section (each store bakes its own bread, rolls, cakes, pies, and pastries), and extra-large produce sections. They also offer film processing, a complete pharmacy, a card shop, video rentals, and an Olde World Cheese section. In-store floral shops range in size up to 80 square meters of floor space and offer a wide variety of fresh-cut flowers, flower arrangements, vases, and plants. In-store card shops cover over 100 square meters of floor space. The bulk foods department provides customers with the opportunity to se- lect the quantities they desire from a vast array of foodstuffs and some nonfood items such as birdseed and pet food. Each store is a little different. Among the special features in some stores are a dry cleaning department, a wokery, and a salad bar. Some stores feature a Market Caf that has different food stations, each devoted to preparing and serving a certain type of food. For example, one station will have pizza and other Italian specialties, and another orien- tal food, and still another chicken or fish. There also will be a sandwich bar, a salad bar, and a dessert station. Customers often wander among stations as they decide what to order. In some Market Cafs, diners can have wine with their meals and have brunch on Sundays. In several affluent locations, customers can stop in on their way home from work and choose from a selection of freshly prepared dinner entrees such as medallions of beef with herb butter, chicken Marsala, stuffed flank steak with mushrooms, Cajun tuna, crab cakes, and accompa- niments such as roasted red potatoes, grilled vegetables, and Caesar salad. Many Wegmans stores offer ready-made sand- wiches as well as made-to-order sandwiches. Some stores have a coffee-shop section with tables and chairs where shoppers can enjoy regular or specialty coffees and a variety of tempting pastries. (continued) 32 Part One Introduction (concluded) importance of good customer service and how to provide it. The employees are helpful, cheerfully answering customer questions or handling complaints. Employees are motivated through a com- bination of compensation, profit sharing, and benefits. Employee turnover for full-time workers is about 6 percent, compared to the industry average of about 20 percent. Quality Quality and customer satisfaction are utmost in the minds of Wegmans management and its employees. Private-label food items as well as name brands are regularly evaluated in test kitch- ens, along with potential new products. Managers are responsible for checking and maintaining product and service quality in their departments. Moreover, employees are encouraged to report prob- lems to their managers. turns it, or even If a customer is dissatisfied with an item, and a portion of the item, the customer is offered a choice of a replace- ment or a refund. If the item is a Wegmans brand food item, it is then sent to the test kitchen to determine the cause of the prob- lem. If the cause can be determined, corrective action is taken. Technology Wegmans continues to adopt new technologies to maintain its competitive edge, including new approaches to tracking inventory and managing its supply chain, and new ways to maintain fresh- ness in the meat and produce departments. Sustainability In order to steer the business into a greener direction, Wegmans advocates the three "R's" of the environment - Reduce, Reuse and Recycle. Wegmans saves energy by replacing the light fixtures to fluorescent lighting in all of its 4,000 distribution centers; conserving sufficient energy to power 470 homes for one year. On top of recycling 3 million pound of plastic bags and wrapping material in 2007, Wegmans also encourages its consumers to reuse paper or plastic bags for another purpose instead of disposing them or simply switch to reusable shopping bags. Sustainability has thus been added into the company's priority list and Wegmans will continue to work on better prac- tices and solutions for the long run. Questions 1. How do customers judge the quality of a supermarket? 2. Indicate how and why each of these factors is important to the successful operation of a supermarket: a. Customer satisfaction. b. Forecasting. c. Capacity planning. d. Location. e. Inventory management. f. Layout of the store. g. Scheduling. 3. What are some of the ways Wegmans uses technology to gain an edge over its competition? E