CEO Q&A: Stew Leonard Jr. at Stew Leonard’s
In December 1969, grocer Stew Leonard opened a same-named store in Norwalk as a 17,000-square-foot retail dairy outlet with only eight items for sale. Today, the family-owned grocery chain operates three stores in Connecticut (Norwalk, Danbury and Newington) and three in New York (Yonkers, Farmingdale and East Meadow).
Stew Leonard”™s prides itself on fun, and the stores are packed with musical animatronic displays and employees dressed in barnyard animal costumes, and free samples are available for shoppers who prefer to taste before buying. The New York Times dubbed the store the “Disneyland of Dairy Stores,” and Business Insider crowned it “The Best Grocery Store in America.”
In 1999, the company expanded into the wine and spirits retail business. Stew Leonard”™s Wines is a network of independently owned retail stores in Connecticut, New York and New Jersey. As with the grocery store, in-store sampling has been a hallmark of this operation.
Stew Leonard Jr., the president and CEO of the company and son of its founder, spoke with Business Journal reporter Phil Hall on the joys and challenges of running this distinctive food retail operation.
When I first came to your Norwalk store in 1988, I was on an assignment for Supermarket News and I didn”™t know what to expect. And this isn”™t what I expected. For people who”™ve not had the pleasure of shopping at Stew Leonard”™s, what should they expect when they come here for the first time?
“I hope people still say what you just said: When you come walking and go, “This isn”™t what I expected.” We call that “the wow.””™
I think the way you would describe it is: it”™s definitely unique. We make a lot of stuff here. We have a big bakery that my sister started, so we”™re making all of the fresh bread and bagels. We”™re dealing with about 150 local farms right now ”” we have products just coming in from the farms. And we have lots of free samples. We kid around with people in the store, telling them we”™re going to take the price tags off all of the products and just weigh customers on the way in and weigh them on the way out.
We are proud of our people ”” we have very, very low turnover. It”™s in the single digits, which is very unusual for retail. I think you meet a lot of friendly, nice people as you walk through the store and that”™s unexpected.”
Low turnover is extremely rare for food retailing. How do you make your hiring decisions?
“I think the most important thing you look for when you hire somebody is attitude. We look for that over skill-set, because you can always teach somebody the skills.
Let”™s say I am walking upstairs when we are hiring somebody and one of the young people who just applied for a cashier job might, out of courtesy, hold the door for me. Now, they don”™t know me because I have my jacket on ”” they were just taught to hold the door to show respect. Usually, to me, if they show that level of respect, I know they”™ll show it to the customers if they”™re working at the register. So, we look for nice attitude, a nice smile, a good approach to their day.
Once they start working here, we try to communicate a lot and not just with the person through performance reviews, which are done 30 to 90 days after they start. We get feedback from them instantly, because sometimes someone says, “Oh, I want to be a baker,” but when they go into the bakery, they come out and say, “Eh, I don”™t really want to be a baker, this is a little different from what I thought.”
Tell us about the newest Stew Leonard”™s store.
In September, we”™re going open our next store in New Jersey. We have three wine stores in New Jersey, and Paramus is one of our best stores out there. The Sears department store closed out there and the mall developers came and said, “Hey, what do you think about opening a Stew Leonard”™s right here?” It was a great offer for the space. And what is really cool is that we have a wine store in a Paramus and it would be great to sell wine and food together, which you can do in New Jersey.
Are you planning additional stores?
We”™re not. We don”™t really have any grand strategy. We wait and see and move on ”” we”™re not like we”™re going to open X-number of stores in so many years. Right now, we”™re just focused on Paramus.
Within the food retailing industry, Amazon shook things up with its acquisition of Whole Foods. Does that have a major impact on the industry?
I think it does. It has a huge impact. They have taken a number of prices and lowered them. From a price standpoint on certain products, they”™ve made a splash. I don”™t think they”™re competitive across the board on a lot of products, but on certain items they are.
Has it directly impact your business?
Not really. You always react ”” that”™s how retailers are. So, if they”™re going to be 99 cents on Chobani yogurt, we”™re going to be 99 cents. The business comes from somewhere. If Whole Foods”™ parking lot is getting fuller, it”™s coming from someplace.
Your company recently sent out a press release that called attention to the success of its internal Health & Wellness Program. What”™s this all about?
We have trained our people in the store and will share some of the savings if they”™ll shop for health care. We have all of the insurance professionals up at Cigna with their heads spinning because they can”™t believe how we”™ve not only been able to maintain but also decrease our health care costs just by shopping.
I”™ll give you a great example that happened to me this week, and I”™m so glad it happened. My wife had to go in to get a colonoscopy. She went into her doctor and her doctor scheduled her. I just happened to see where the appointment was set up ”” I”™m not going to say the name of it, but it was a colonoscopy place ”” and I said to my wife, “Have you checked the prices on how much colonoscopy costs?” And she said, “No I didn”™t.” And I said, “Over at the store we have the value center and we give everyone incentives if they check the prices of what these procedures cost.” My wife comes over and looks it up, then comes home and says, “I just saved $2,000. That was the most expensive place I could have gone to. I found another place in Fairfield.”
Now, there has been an incredible upfront cost to this and it was a big commitment by our family. The first thing we had to do was say everybody in the company has to go see a doctor every year ”” you”™re not going to be on insurance plan unless you see the doctor. Of course, as soon as you see the doctor, you have to take blood pressure medication or you have to take diabetes medication, then our medicine costs go way up. But what we”™re finding now is that we have a healthier population and they”™re getting healthier and our costs are going down.
Next year is your company”™s 50th anniversary. Do you have any special festivities planned?
You know, we don”™t right now. We need to. It should be something fun and exciting. I wonder what would be really cool ”” it should be some tribute to the milk and the dairy and the heritage of the family farming. Maybe we can bring 50 cows into the stores ”” and a lot of shovels!
Looking back on nearly a half century in business, what is the company”™s crowning achievement?
All of the people we”™ve developed over the years and are part of this place. And creating something unique to the community here. My in-laws are from Los Angeles and I go out there ”” there”™s nothing like Stew Leonard”™s out there. I miss the store when I”™m out there and I want to come back and rip open one of those breads and eat one of those mozzarella balls. I think we”™ve been able to bring cool food and wine to the communities we are in. I think that”™s a unique accomplishment for the family.