Brookshire CEO Stresses Role of IT, Logistics

ORLANDO, Fla. — Brookshire Grocery Co.’s growth over the past five years has been guided by a combination of technology investments, price breaks, improved vendor partnerships and an aggressive remodeling program, said Rick Rayford, the Tyler, Texas-based chain’s president and chief executive officer since 2007.

Speaking last week at a general session at the Supply Chain Conference here, sponsored by the Food Marketing Institute and the Grocery Manufacturers Association, Rayford also emphasized the importance of good supply chain management to the success of his or any other grocery company.

Prior to becoming Brookshire’s CEO, Rayford, a 43-year veteran at the company, served in several distribution and logistics capacities, and was a frequent participant in the Supply Chain Conference.

Companies with a sophisticated supply chain are 12 times more profitable than companies without one, Rayford noted, adding. “Any glitch in the supply chain causes share value to torpedo.” Brookshire’s own privately held stock price in recent years has seen “unprecedented growth,” driven by “record sales,” he said. The chain has also built or acquired 16 stores and remodeled 47 over the past half-decade, with more store openings planned for this month.

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Rayford cited technology as a key contributor to Brookshire’s development during his tenure. “Ultimately, through technology, we were able to make our people’s jobs easier and their lives more effective,” he said.

In particular, Rayford cited the adoption of SAP retail technology, noting that Brookshire, which operates 150 stores in three states, was one of the first U.S. grocers to implement it. “It gave us an enormous amount of data to make fact-based decisions better than we ever made in our company’s history,” he said. The data, he added, gave Brookshire the opportunity to “have historical analysis by product on profitability, movement and ad performance.”

More recently, Brookshire has implemented fresh item management and workforce management systems. “These are great tools to make our people and company more productive and efficient,” he said.

Beyond Technology

But Rayford stressed that there have been many changes beyond the use of technology that have helped Brookshire since he became CEO. One was the adoption of category management, a business model that “puts decision-making power for product selection, placement, price and promotions into the hands of subject-matter experts,” he said.

Brookshire has also taken an aggressive stance on pricing in certain categories, such as at its 114 pharmacies, where it has implemented a $4 generic drug plan. “It was expensive but we knew it was the right strategy,” Rayford said. At its 86 fuel stations, Brookshire “made sure we had the lowest price,” he noted. “That put people in our parking lots and was a tremendous success.”

The chain launched a loyalty program for its Brookshire banner, offering purchase-based points exchangeable for fuel and grocery discounts. On the other hand, Rayford has underscored the price-impact nature of its Super 1 Foods banner in order to distinguish it more clearly from the Brookshire banner.

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Rayford sought to improve vendor relations by holding a summit with his top-100 vendors. “We told then our strategic plans and then had one-on-one meetings to come up with win-win opportunities,” he said. “We did all of this during the worst economic recession since 1928.”

To address budget issues, the chain has cut training programs, but Rayford called that a mistake. “Training is critical to your company’s success,” he said.

Rayford encouraged the supply chain executives in the audience to play an active role in their companies. “Let your voice be heard,” he said. “Your company needs you to come up with ways to make the supply chain more efficient.

“But don’t stop there,” he added. “Let your voice be heard in all aspects of your company. They will appreciate your advice because they know you’re trying to make your company better.”

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