When he was 16 years old, Mike Keating took a job at Star Supermarkets, a Rochester-based grocer battling Wegmans pound for pound. But when Peter J. Schmitt bought Star in 1982, the West Seneca food wholesaler made a mess of things.
Among other mistakes, it stocked Fuji film in the heart of Kodak country.
"They didn't understand Rochester. They figured it was 60 miles away, how different could it be?" Keating said. "They also didn't understand Bob Wegman."
The chain went under. Keating, fresh out of business school at SUNY Albany and out of a job, went to work for the competition.
Now, more than four decades later, he runs Wegmans' Buffalo division as the region's senior vice president.
Q: What do you mean Peter J. Schmitt didn't understand Bob Wegman, the second-generation president of Wegmans at the time?
A: They really kind of threw a gauntlet down back then and he was such a competitor. I mean nothing turned him on like a competitive challenge. It turned into quite the battle – for a very short period of time. The skirmish didn't last long.
Q: How did he come out on top?
A: I think just understanding the customer better than his competitor did. Not trying to follow the rest of the industry, always trying to lead; continuing to reinvent our company to position us as we are today to compete with different tools than our competitors might have.
Q: Now you guys are heading into new markets and you're the ones with the learning curve. How do you make sure you're not making any of those mistakes?
A: Well, I think we're taking the best of what Wegmans is and understanding the unique environment that we're in.
Let's take Raleigh. That's our next adventure. The woman who's opening up the first store has probably been rooted there the past 18 months and has spent a lot of time there the past few years really getting to understand the market and the language, helping us understand what's important to people in that market and how to adapt to that. We still take the core of what our program is and what we think we're good at and try to adapt that to what the consumer is looking for.
Q: What kinds of things was she doing there?
A: Really living there. Eating there, shopping there, talking to her new neighbors. There's some formal research, too, but it's more about people just immersing themselves in each community that we're in and making sure that we're giving those folks what they're looking for.
A lot of the people that were rooted and raised here have been transplanted to these markets. We discovered after we went in that you have to have Weber's mustard, Sahlen's and Zweigle's. Those niche items will always be important to our customer. If they are that unique, if they're that important to the customer, you won't ever see us take that stuff away.
If there's an item where we think we can do a better job, where the customer is underserved, that's where you'll see a Wegmans brand product, because we see an opening in that particular category. I think hopefully you've seen in our stores that partnering with local manufacturers – some small local producer – is really important to us.
Where others as they get bigger are backing away from that, I see it becoming more and more important to us as we expand.
Q: It seems like that would be a challenge as you grow.
A: It is. I got an email last night. We're looking at a local coffee manufacturer, Golden Cup, located in Buffalo. Our coffee buyer last night was telling me that he was looking at the same kind of supplier at seven or eight different markets right now. There are unique brands in every market that people have grown up on and are important to them.
So yes, it's a complexity, but we think it's important to chase down those unique relationships and expand those categories that are important to people.
Q: It seems like you're growing faster than you have before.
A: I'm not sure that we're really growing faster because we still only open two to three stores a year. We're entering new markets, so maybe that makes it look like it because it gets more attention.
We understand that our brand – I don't know if I really love that word, but – who we are is so important that we protect that fiercely and try to make sure we take that culture and shopping experience to other markets as quickly as we can without diluting it in any way.
Q: How does Wegmans figure out what customers want?
A: The family travels to where trends begin. Like the research that our manager is doing in a new territory, they're doing with food trends. They're seeing what's hot on the West Coast, what people are really interested in and trying to bring those things to our customers.
I think it's a mix of science and feet on the street, if you will. We've got 50,000 employees, and I think if you had to weigh it, what our people bring back to our senior leadership and the family is even more important than the science. They're talking to the customers every single day.
The family tells me all the time how important it is that we listen to our customers and our people. Danny says all the time, "What are the trends in your families? What does your family think is missing?"
Wegmans has established a culture where a person pushing a cart out in the (parking lot), they know they're relevant and their opinion matters. If they know a part of their job that could improve, they know there's someone who's going to listen.
Q: You're on the board at Niagara University's Food Marketing Center of Excellence. Seems like a great way to stay connected to the next generation coming into your field.
A: I've been doing this a long time. The changes that are happening now are so exciting. Connecting to a university with the Center of Excellence, I think we can stand in front of our young people now and say the food industry isn't stodgy, it's cool.
True innovation, true technology has really hit us. I can't imagine a more exciting time or a more exciting industry to choose.