The Wegmans Way
by Richard Mitchell
January 27, 2010
Wegmans Food Markets Inc. is perhaps the most exhorted merchandiser in the deli and meat sectors.
The privately held Rochester, N.Y-based operator of 75 stores in New York, New Jersey, Pennsylvania, Virginia and Maryland—which generate an estimated $4 billion annually in revenues—has become a trend-setting prepared foods power by merchandising extensive varieties of high-quality perishables.
Elements include a plethora of ready-to-eat and ready-to cook entrées and side dishes, hot and cold self-service buffets and full-service food stations.
Customers are encouraged to eat at stores’ expansive dining areas—which feature microwave ovens—or to take out the prepared meals in plastic leak-proof containers.
Yet, while superior selections and first-rate customer service have made Wegmans a protein magnet, the ragged economy and stepped-up competition is triggering a variety of marketing initiatives.
Most conspicuous is an emphasis on cost savings.
Large yellow signs throughout delis and at entrances at stores in Sterling, Va., and Gainesville, Va., for instance, promote meal deals in which customers for either $6 or $10 receive their choice of an entrée and two sides dishes from select items in the prepared foods case.
Meat departments, meanwhile, have large yellow signs above the self-services cases that carry the headline “low prices!” followed by the cost of specific cuts. Stores also are spotlighting value packs with large “Club Pack Selections” signs.
“Wegmans is a smart operator and the six dollar meal is likely creating a lot of extra business,” says Eugene Fram, a Los Altos, Calif.-based marketing consultant and professor emeritus at the Rochester Institute of Technology who has closely tracked Wegmans.
He notes that the first evidence of a “pricing point of view” occurred in the 1990s when Wal-Mart outlets opened in Rochester and grabbed some of Wegmans’ customers.
“Wegmans executives feel they have to be price competitive and have developed eyes in the back of their heads trying to keep a focus on Wal-Mart,” Fram states. “The company is watching prices very carefully.”
In addition to competing with other supermarket chains for customers seeking quick prepared meals, Wegmans also is leveraging its gourmet-quality entrées and side selections to battle foodservice outlets.
The Sterling and Gainesville stores, for instance, together offer such entrées in the $6 meal deal as Grilled Lemon Garlic Chicken Breast, Meat Lasagna, Cheese Lasagna, Parmesan Crusted Chicken, Homestyle Meat Loaf, BBQ Pulled Pork, Chicken Marsala, Chicken French and Tilapia French.
Entrées in the $10 meal deal include Asian BBQ Boneless Short Ribs, Signature Crab Cakes, Honey-Brined Boneless Turkey Breast, Potato Crusted Salmon and Cedar Plank Salmon.
Among the sides dishes for both deals are Butternut Squash with Baby Spinach & Craisins, Broccoli, Roasted Yams, Cedar Glazed Carrots, Green Beans Amandine, Harvest Vegetables, Macaroni & Cheese, and Herb Stuffing.
Additional items in full-service prepared foods cases that are not included in the meal deals include Honey Fried Chicken, Potato Pancakes, Asian Green Beans, Cauliflower & Spinach Gratin, Scalloped Potatoes, Penne Pasta with Tomatoes & Mozzarella Cheese, and Potato & Pepper Jack Gratin.
Situated near the front of stores, the prepared foods sections have multiple stations and resemble upscale food courts.
Among the stations are such self-service buffets as an Asian Wokery, Indian & Thai Bar, and Fresh Food Bar that sell items for $7.99 a pound in the Sterling and Gainesville stores. The buffets, including a Veggie Bar, are priced at $7.49 a pound in Wegmans’ flagship location in Pittsford, N.Y. Other self-service displays feature hot soups and hot chili.
In addition, the Gainesville outlet has a standalone “Crab Shack” that provides made-to-order Crab Cakes for $10 and also markets Cream of Crab soup.
Nearby is a “Seafood Bar” which has a restaurant-style menu and table and counter seating, along with a take-out option.
The 10 entrées that are priced from $7.99 to $11.99 include Signature Crab Cake, Atlantic Farm Raised Salmon, All Natural Day Boat Sea Scallops, Ecuadorian Farm Raised Tilapia, Vietnamese Black Tiger Shrimp, Baked Herb Marinated Tofu, Grilled New York Strip Steak, Lemon Garlic Marinated Chicken Breast, Australian Lamb Chops, and a rotating seafood dish. Items come with a vegetable or salad.
Seafood Bar sandwiches that range from $6.99 to $9.99 include Corned Beef on Rye, Pan Seared Mahi Mahi, Grilled Chicken Breast, Signature Crab Cake, New York Strip Steak, and a Cheeseburger.
Also offering fresh sandwiches is the “Chef’s Creations” prepared foods counter.
Choices, which include a side dish of French Fries or Green Beans, are Salmon BLT for $6, Crab Cakes for $10, Baguettes for $6.49 or $7.49, and Paninis for $5.99 or $6.99.
The Sterling, Gainesville and Pittsford stores also have separate counters merchandising made-to-order sandwiches and hot pizza, while Pittsford also sells burritos.
The vast majority of bulk meats at Wegmans locations are private-label, including such organic options as Oven Roasted Turkey Breast, Honey Roasted Turkey Breast, Grass-Fed Fully Cooked Roast Beef and Fully Cooked Uncured Ham.
Other meat brands, which can vary among stores, include Perdue, Jennie-O Turkey Store, Schaller & Weber, Columbus, Parmacotto, Krakus, Lifestyle, Best’s, Plainville, Hebrew National, Applegate Farms, Carando, Citterio, Hartmann’s and Abraham.
Among the bulk cheese brands are Wegmans, Alpine Lace, Cooper, BelGioioso, Adam’s Reserve, Land O’ Lakes, Jarlsberg, Ostenborg, Margherita, Dutchmark and Great Lakes.
Pointing to price
In addition to emphasizing private-label proteins in the meat cases, Wegmans also is positioning price as a competitive differentiator.
For instance, in addition to the signs exclaiming “low price!” and which list the number of club packs available in each location (31 in Sterling, 32 in Gainesville), a board in the Sterling outlet compares the cost of six beef and chicken cuts to comparable items being marketed at two competing banners—Giant and Costco. Wegmans prices are listed as being equivalent or lower than the competitors.
“Club Pack” logos also are affixed to packages, and product brochures are distributed on a counter-top sign in Sterling.
“Wegmans and other supermarket retailers are offering larger packages to attract consumers who are concerned with price per pound,” says Sherry Frey, vice president of The Perishables Group, a Chicago-based marketing and consulting firm that focuses on the fresh sectors. “The packs provide them with a competitive edge versus the supercenter outlets.”
Many of the store-branded beef, chicken, pork, veal and lamb selections in the meat cases, meanwhile, are merchandised in vacuum packaging.
They include three varieties of organic grass-fed beefsteaks—Tenderloin, Sirloin and Strip, and three types of marinated chicken breast cutlets—Rosemary Balsamic, Teriyaki and Honey Mustard.
Among the other meat brands being marketed in Wegmans outlets are Jennie-O Turkey Store, Hormel, Perdue, Empire Kosher, Great Range, Maple Leaf Farms and Sugardale.
Freshly prepared value-added selections also are spotlighted.
The full-service meat counter at the Sterling outlet, for instance, offers such items that are priced by the pound as Pork Florentine for $4.99; Dijon Hazelnut Pork Tenderloin for $6.99; Pork Tenderloin with Apple Raisin Stuffing for $5.99; and Apple Pecan Stuffed Cornish Game Hens for $4.99.
There also are three types of stuffed chicken breast for $7.49 each: Sun Dried Tomatoes & Pecans; Pesto Bruschetta; and Artichoke Bruschetta. Also for $7.49 is Four Cheese Garlic Chicken.
The Gainesville location, meanwhile, is merchandising 20 value-added items in the full-service meat case.
Selections, priced by the pound, include Crab Stuffed Chicken Breast for $7.99; Pounded Chicken Cutlet for $5.79; Chicken Cordon Bleu for $7.49; Cashew Crunch Chicken for $7.29; Spicy Buffalo Chicken Breast for $7.49; Wild Rice Stuffed Cornish Hen for $4.99; Herb Stuffed Pork Chops for $5.49; and Herb Stuffed Pork Tenderloin for $5.69.
Also available is Apple Raisin Stuffed Pork Roast for $5.49; Cheese Herb Stuffed Flanks for $8.99; and Feta & Spinach Stuffed Flanks for $8.99.
A Gainesville butcher says the value-added selections vary among stores in accordance with the demographics of shoppers and how well items are selling.
Some selections also rotate seasonally, he notes, adding that the pork items are replaced in the summer with about 15 varieties of kabobs, and Cornish hens are just typically marketed around the holidays.
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