Hometown Hero: Stater Bros.

ELLIOT ZWIEBACH

Stater Bros. Markets understands the communities it serves because it takes a lot of pride in being a “hometown” company.

And because Jack Brown, chairman and chief executive officer of the 167-store chain, was born in San Bernardino, Calif. — Stater's corporate home — he also feels he has a keen understanding, along with a deep affection, for those communities.

The way Stater Bros. delivers service to people in the areas where it operates prompted SN to name it the winner of its 2010 Community Service Award.

“Community is what Stater Bros. is all about,” Brown told SN. “We are a hometown company, and our philosophy from the very beginning of the corporation has been that we don't just do business in the community but rather we are part of the community, and that's something we believe in very strongly.”

Stater is the No. 1 employer, public or private, in the Inland Empire — the Riverside-San Bernardino marketplace in which 100 of the chain's stores operate — “and as the area's hometown grocer, there's an extra warm feeling for us in sponsoring some of the events we do that local people also recognize and appreciate,” Brown said.

“And when we serve the community, the community rewards us with its loyalty, so if we take good care of them, they'll take good care of us.”

Brown said he's been asked to run for public office, “but I feel I can do more for the people I care about by building a stronger Stater Bros. than I could in influencing policy at the state or federal level.”

The majority of the constituency Stater serves is middle-income, Brown said. “When I'm asked if we serve a blue-collar or white-collar shopper, I say that we serve a ‘ring-around-the-collar’ consumer — people who are hard-working and who moved away from Los Angeles or Orange County because they wanted to build a better life here in the Inland Empire.”

Food Banks

When Brown arrived at Stater in 1970, its community service consisted primarily of membership in the chamber of commerce in each city in which its stores operated, he said. The chain has perpetuated that approach, he pointed out, “but we also began encouraging people to become involved with the schools, churches and other groups in the communities where they lived because that's part of what doing business in a community means.”

The first major community service involvement the company pursued was working with two local food banks — the San Bernardino County Food Bank and the Second Harvest Food Bank in Riverside County.

The idea came to Brown in 1988, he recalled, when he was driving behind one of his stores and saw a man and two children digging in Dumpsters, tossing out baked goods. “The father might understand what's going on, I thought, but I didn't feel the kids should think you shop for food in a Dumpster,” he told SN.

“So I met with our executives to see what we could do, and that's when we started recycling day-old baked goods, dented cans and items with short shelf codes to the two food banks, which pick up food from us every day and distribute it to 600 organizations — way more than we could handle if we did it on our own.”

Since 1988 Stater has donated 57 million pounds of groceries to the two food banks, with donations currently running at a rate of about 4 million pounds a year, Brown noted.

Although Food for All, the industry program that distributes food to the needy based on shopper contributions at the checkstand, is now a national program, it was originally developed in the San Bernardino area by the late grocer Paul Gerrard. Stater had been part of Food for All until two years ago, when Brown said he decided Stater should concentrate its efforts working with the two local food banks “so our customers know the food we donate stays close to home,” he explained.

Local and National Support

On the national level, Stater donates to several organizations, including the Muscular Dystrophy Association ($7 million since 1986); the American Heart Association ($2.5 million since 2002); the City of Hope ($619,000 since 2004); the Leukemia/Lymphoma Society ($472,000 since 2009); and the U.S. Marine Corps Toys for Tots ($105,000 since 2005).

The United Way chapters in each community in which Stater stores operate also receive corporate donations annually, Brown noted.

The chain also encourages consumer participation in collecting money for the various national programs by making contribution forms available at the checkouts, Brown said — usually one cause at a time so as not to overwhelm customers.

Within California, Stater has donated money — and actively encouraged customers and store personnel to do so as well — to the California State Parks Service so it can replace 1 million trees this year and in 2011 that have been destroyed in various wildfires around the state.

Among regional community service programs, Stater has been the sponsor for the last 20 years of the annual Route 66 Rendezvous — a three-day event in which the city of San Bernardino closes down a 35-block section of the downtown area to display classic cruising cars built before 1974.

Brown said it's the largest supermarket-sponsored event in the nation, “to our knowledge.”

While the first show attracted 300 cars and 2,000 people, the event last September attracted more than 2,000 cars and more than 500,000 people, and boosted the local economy by more than $40 million, Brown said.

At the event, Stater oversees a large promotional area with games sponsored by various vendors and invites local celebrities to sign autographs, including sports figures from the Dodgers and Angels baseball teams and, last year, football's Joe Theismann.

Another regional recipient of Stater's largesse is the Children's Hospital at Loma Linda University, the largest medical center in the area. Working in tandem, Stater and Procter & Gamble donated $300,000 to the facility two years ago to build an activity center that includes a movie theater.

Over the last five years Stater has donated more than $2 million to the facility by sponsoring a radio contest that solicits donations from listeners, with pledges of $200 or more earning local schoolchildren the opportunity to win free bicycles — with 7,000 given away since the program started, including 1,100 last fall.

The chain also worked with Pedigree over the last two years to raise $107,000 for local animal shelters, Brown noted.

Another regional event for the past five years has been the Stater Bros. 300 at The Auto Club Speedway in Fontana, Calif. According to Brown, Indy Car's Danica Patrick has chosen the event next month to make her NASCAR debut.

Featured at the speedway event is a 2,000-square-foot Stater Bros. Express convenience store that offers identical pricing to its conventional supermarkets. “There's no way to guess how much goodwill that Express store brings us in the long run, but we do get a lot of comments from people who say they appreciated what we did at the speedway,” Brown said.

Neighborhood Support

On the local level, Stater donates to 4,000 different non-profit neighborhood groups that solicit money, Brown said. “However, our policy has always been that when we make contributions to one group, we have to do the same thing in another community, and that was limiting our ability to donate to special projects,” he explained.

So the company formed Stater Bros. Charities, a 501(c)(3) non-profit organization, in 2008 “so we could provide philanthropic support for various projects involving hunger relief, children's welfare, services for the elderly and care for our nation's veterans, by making donations of $40,000 or $50,000 without feeling morally obligated to do the same thing everywhere,” he explained.

Stater Bros. Charities — which has its own eight-member board under the leadership of an outside director, Sarah Cain — has raised more than $3.6 million in its first two years, Brown said.

One of its fund-raising events was the Dave Stockton/Heroes Pro-Am Golf Tournament last March, which featured Stockton — a boyhood friend of Brown's — and 10 other golf pros plus ceremonies involving five Medal of Honor winners. With the money raised at that event, Stater Bros. Charities donated $10,000 to each of five organizations “that help make life better for people,” Brown noted.

Stater Bros. Charities has also raised $520,000 the past two years through its sponsorship of an annual Believe Walk — an event that was inspired by three cancer survivors who came to Stater looking for help finding ways to pay back the hospital that had cared for them, Brown told SN.

Stater Bros. Charities also donated money last year to purchase three vans to help military veterans get to Loma Linda Veterans Hospital, Brown noted.

He said a store manager's actions during a major fire in the Big Bear area in 2003 typified the chain's approach to community service. The manager, Rick Jaeger, got his family out of the burn area, then returned to open his store and allow local residents to take what they needed, with the promise to pay him later, Brown recalled.

“He did what he knew we would have wanted him to do,” he said.

Jaeger received the store manager of the year award from Food Marketing Institute that year, Brown noted.

Help in a Downturn

Stater is making extra efforts to take care of its customers during the current economic downtown, Brown pointed out. “Unemployment in the Inland Empire has exceeded 14% — higher than the national average — for the past two years, and this area, in which the construction industry is the No. 1 employer, leads the nation in mortgage foreclosures.

“So we've been squeezing every dollar we can out of our expenses to keep store prices down, which means profits have been cut in half. But that's OK because the families we serve have been hurting too. And when the economy begins to turn this year, and when the job market improves and the people we serve have more income, they will spend more with us.

“The key is holding our customer count. And while people are spending less at our stores, we are holding and increasing that count.”