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“We will never walk away from price, and we haven’t raised our prices, but what we really want to be known for is, ‘A helpful smile in every aisle.’”
— Jay Marshall, recently named SVP of marketing and merchandising, effective Oct. 1
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Still Smiling: Hy-Vee Wins Retail Excellence Award
Autonomy as an Asset
One of Hy-Vee’s best assets, according to Executive Vice President Tom Watson, is the autonomy of its store directors.
The West Des Moines, Iowa-based chain is known for its innovative compensation program for store managers, through which they earn a share of their store’s profits as their salary and have a high level of control over their store’s operations.
“It lets us react quickly, and lets us go to market with different philosophies according to each store and each market,” Watson explained. “It also makes it tough for competitors because we are not the same in every market and at every store. We don’t have a ‘Playbook 101.’”
To become a store director — Hy-Vee has several years’ worth of candidates in the pipeline — would-be candidates are closely watched, groomed and trained throughout their careers. They can receive training from Hy-Vee University, which teaches skills like bookkeeping, and some are also sent through the Dale Carnegie leadership training program. Potential store directors also may be sent to some industry conferences such as the Food Marketing Institute Show.
Hy-Vee’s assistant vice presidents of operations come up with a list of a handful of candidates each year, who are presented to a selection committee of Hy-Vee officers for final approval.
Read the main feature: Hy-Vee Wins Retail Excellence Award
“We watch them throughout their careers,” said Watson. “There’s a lot of input from everyone, and by the time they get the job, they are ready.”
Hy-Vee has never hired a store director from outside of the company, he said.
Neil Stern, managing partner at McMillanDoolittle, Chicago, agreed that store-level autonomy has been an important asset for Hy-Vee, although he also cautioned that it can tend to make such individuals risk-averse.
“Store directors might be unwilling to test new systems, for example, if they are afraid they will lose money,” he said. “But somehow they are bringing store innovation to the store level. If there is a secret sauce, I’d want to understand how they are making that happen. I suspect it is very effective management.”
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