If Southeastern Grocers President and CEO Anthony Hucker visited your home, he’d be curious.
“I’m one of those sad people that likes to look in people’s pantries and refrigerators,” he explained, “and ask them, ‘Why that ketchup? Why that onion? Why the brand? Why the private label?’”
The reason he would ask such questions, he said, is because “you have to listen loudly, you have to listen really loudly, because your customers will tell you what it is they want.”
If a grocery store delivers what its customers want, he said, guess what?
“They’ll come back.”
Hucker took over as president and CEO of Jacksonville-based Southeastern Grocers on Aug. 10. He had served as the interim leader since July 1 when his predecessor, Ian McLeod, left to run Dairy Farm International Holdings Ltd. in Hong Kong.
Hucker, 51, is the eighth CEO since 1965 to run a company that can trace its Jacksonville roots to the former Winn-Dixie Stores Inc.
Southeastern Grocers was formed in 2012 with the merger of Jacksonville-based Winn-Dixie and Bi-Lo, which was based in Greenville, S.C.
Jacksonville was chosen as the headquarters for the merged company.
Its banners are Winn-Dixie, Bi-Lo, Harveys and Fresco y Más. It operates more than 700 stores in seven Southeastern states and is the second largest supermarket based in the Southeast by store count.
It employs more than 50,000 people.
About 30 Winn-Dixie stores and eight Harveys operate in the Jacksonville area.
Hucker, a native of Wales, joined Southeastern Grocers as of March 1, 2016, as chief operating officer.
His career included serving as president and CEO of Schnucks, president of Giant Food, head of Walmart’s Strategy and Business Development Division and 10 years with the original startup team with Aldi UK.
He now faces some of those as competitors.
“If you talk to economists that are agnostic about industries, they would say that this is probably the toughest industry in the economy, bar none,” Hucker said last week at the company’s Baymeadows headquarters.
He then referred to the geography and the consumer spectrum served by Southeastern Grocers.
“It’s probably the toughest sector in the toughest segment of the toughest industry in the economy today,” he said.
Southeastern Grocers ranks No. 3 in market share in North Florida and South Georgia, according to The Shelby Report of the Southeast trade publication.
Its 135 stores captured 22.6 percent of the market in Shelby’s defined territory.
That rank was below Publix Super Markets Inc., with 111 stores taking 28.6 percent, and No. 1 Wal-Mart Stores Inc., with a 31.8 percent share with 83 stores.
Competition doesn’t end there. Many of the Jacksonville-area supermarkets have been expanding and changing.
Within the past few weeks, The Fresh Market refreshed its stores and Earth Fare opened a second location, coincidentally in a former Winn-Dixie space.
Aldi will open its fifth area store next week; Lakeland-based Publix continues to renovate its stores; and Wal-Mart is preparing to open another Neighborhood Market in the Baymeadows area.
“You always have to be alert to what the competition’s doing,” Hucker said.
Here’s his plan:
“I believe, No. 1, that our associates are our greatest asset; No. 2, that we put our customers first always; No. 3, we care about the community,” he began.
No. 4, he said, is providing stores that customers can trust to deliver quality, service and value daily.
“That’s how we’ll compete,” he said.
Hucker emphasized that the company’s greatest asset and “key differentiator” is its employees who will activate the mission of operating stores “with stunning fresh quality, with prices that compete, with an effective supply chain, working smartly and selling the service with personality.”
Hucker said the company’s vision, goals and values center on trust and they have remained the same since he joined the senior team 18 months ago.
He describes trust as a balance sheet with credits and debits, “depending on whether or not your action meets your words,” and he cites “truth points.”
“The truth point is, are you going to go into one of our stores? The second truth point is when you pick up that apple, is it stunning fresh quality?
“The third truth point is what happens when you go through the checkout and how are you served? And then the fourth truth point is what happens when you eat that apple at home?”
Trust, he said, will rise, fall or remain stable at each point.
“We want it to be high, remain high and always overachieve your expectations. That’s trust,” he said.
As a private company, Southeastern Grocers does not publicly provide financial information.
Since the merger, the company has bought and closed stores and made other moves to cut costs and improve sales.
Hucker said it’s a tough time for food retailers, explaining it’s a deflationary environment but turning into an inflationary one.
Deflation means businesses might lower prices to capture customers, which seems good for consumers but makes it tougher for companies.
Hucker sees that changing, noting he sees “some green shoots of a tailwind here in the third quarter that give us momentum and cause for quite a lot of optimism.”
He said the competitive headwinds are slowing.
“Some of those headwinds are turning into tailwinds as we go into the middle of the third quarter, and deflation will turn into inflation in quarter four.”
He said that translates into rising sales, although he declined to elaborate.
Bloomberg.com reported grocers have engaged in a price war that has been a boon for consumers while weighing down on corporate earnings — and those trends will only get more intense as another competitor, Germany-based Lidl, expands in the U.S. with the intention of opening at least 100 stores on the East Coast by summer 2018.
That comes on top of Amazon.com’s move into groceries and the addition of food sales in dollar stores and pharmacies.
Southeastern Grocers is owned by funds associated with Dallas-based Lone Star Funds.
Hucker declined to discuss what the funds’ exit strategy might be or whether Southeastern Grocers would launch another IPO.
It filed for an initial public offering of up to $500 million in September 2013, but called off the offering about a year later without specifying a reason.
McLeod, who took the CEO job March 2, 2015, led some high-profile changes in the company, with a campaign to lower prices and focus on neighborhood needs.
That led to the conversion of seven area Winn-Dixie stores into the lower-priced Harveys brand with an eighth converted Aug. 2.
It also generated a flagship Winn-Dixie in Baymeadows that features more amenities and a product selection for more affluent neighborhoods.
Since then, Southeastern Grocers has opened two more flagship Winn-Dixie stores, including one in Cocoa Beach in late July that Hucker said drew the longest lines he’s seen for a grand opening.
However, he said no plans are in place for more Harveys or flagships.
For Harveys, Hucker intends to gauge customer reaction to determine whether more will be converted. Regarding the flagship Winn-Dixies, he was encouraged by the initial response in Cocoa Beach, which was a store redeveloped after Hurricane Matthew.
“My gut tells me that there will be more to follow, but I’ve got to see if we’re able to maintain that initial start,” he said.
Southeastern Grocers uses customer insight groups to determine its community strategies, he said.
Southeastern Grocers also is changing up its products. In February, it announced it would roll out reformulated private-label products this year and launch three new brands: SE Grocers Essentials, SE Grocers and Prestige.
The company said customers can save 20 to 30 percent on their groceries.
Hucker said the company’s food technologists reverse-engineer the raw materials of well-known brands and adjust the level of ingredients to suit customers’ preferences.
For example, a group of 5- to 12-year-olds taste-tested Southeastern Grocers’ sandwich cookie vs. the Oreo brand.
“Not only could they not taste the difference, they preferred ours,” Hucker said, noting the price difference of $1.20.
The tagline, he said, is “If you can’t taste the difference, why pay the difference?”
Hucker occupies a cubicle on the top floor at Southeastern Grocers’ four-story headquarters building in the Prominence office park in Baymeadows, another move made by McLeod.
The company had been based in West Jacksonville, where Winn-Dixie occupied a complex at 5050 Edgewood Court for decades. That space remains in use for some corporate functions.
Southeastern Grocers leased and remodeled the Baymeadows building to include open spaces, a ground-floor test kitchen, employee amenities and no private offices.
It took occupancy in late April 2016 soon after Hucker arrived.
Hucker described his short-term Edgewood Court office as “old century” with oil paintings, mahogany and a tree.
“It just wasn’t me,” he said.
He said his new space is a 4-by-4, L-shaped cube with a computer and telephone. There are meeting rooms for privacy.
A significant nod to the past is, of course, the Winn-Dixie name, which has generated conversation about a change.
“Somebody mentioned it to me, four or five weeks ago, as to whether that was a consideration,” Hucker said.
He isn’t leaning that way.
“I think the Winn-Dixie legacy is fantastic. The Davis family is well-known, especially in Northeast Florida, so I don’t have any plans to change it,” he said.
Winn-Dixie traces its history to the early 1900s with a move to Jacksonville in 1944 by four Davis brothers who took over the company when their father died. It became Winn-Dixie Stores Inc. in 1955.
Winn-Dixie had operated as a public company. It reorganized under Chapter 11 bankruptcy protection in 2005-06 and went private in the merger.
Hucker said while the name was “something we should always think about,” it was not an immediate concern.
“I ultimately will do what I said, which is listening to our associates and listening to our customers. If they believe that there is power in changing it, I’ll be open to the conversation, but right now I think the legacy of the name and the heritage of the company is very, very strong,” he said.
He took it another step.
“Actually we should leverage the legacy of being born here and being raised here, provided the brand is delivering on that quality, service and value.”
@MathisKb
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