Why Wegmans Must Change With New CEO
Now that Danny Wegman has passed the baton to his daughter Colleen, it’s time for the popular grocery chain to plan its next evolution.
“I will continue in my role, but now as chairman of the company,” said Danny Wegman. “The time has come to create a structure for the future that will allow us to remain strong, vibrant and family-owned. I have no doubt that our company will be in good hands.”
Wegmans Food Markets has 92 stores in New York, Pennsylvania, New Jersey, Virginia, Maryland, and Massachusetts and has a well deserved reputation as an industry leader and innovator.
The supermarket chain, which Retail Leader sister publication Progressive Grocer profiled last year, is known for having huge, 150,000-square-foot stores with an emphasis on fresh produce, prepared foods, meats/seafood and stellar customer service which engenders extreme loyalty.
However, loyalty in the retail world, especially the supermarket segment, can be a fleeting thing. The fundamental challenge facing Colleen Wegman, as is the case for all CEOs, will be to maintain all of the things that make Wegmans wonderful for so many shoppers, while positioning the company to serve new generations of customers with different tastes and expectation, especially when it comes to digital matters.
Wegmans has lagged behind competitors when it comes to digital retailing, with no online ordering system or grocery delivery in place even as customers increasingly demand such services (Wegmans only started accepting chip-enabled EMV cards this year).
The online grocery market is projceted to grow from 4% of total sales to 20% by 2025, which is not too far away. If Wegmans is going to participate in that growth it will have to adjust its strategy to continue appeal to the modern shopper. It will need to make an increased investment in a multichannel experience and focus on digital loyalty programs to succeed in a food retail environment that is quickly changing.
To wit, Wegmans dropped in the latest ACSI customer satisfaction rankings, from No. 1 in 2016 to No. 3 in 2017 (behind Trader Joe’s and Publix/H-E-B).
It will be up to Colleen Wegman to spur innovation at the company, which she joined in 1991. She was named president in 2005 by the late Robert B. Wegman, her grandfather. She previously served as a store manager, a merchandising exec, directed e-commerce and helped to develop Wegmans’ natural/organic department.