Distributor of the Year Grocery Supply Company
by Mary Ellen Kuhn
This Texas-based distributor’s formula for
success is all about earning the trust and confidence of its customers and
vendors.
The corporate slogan at
Grocery Supply Co., Sulphur Springs, Texas, positions the company
perfectly. “Big enough for the job, small enough to care,” it
states.
With sales in excess of $1 billion, Grocery Supply Co.
clearly is big enough for most jobs. The part of the tagline about caring
rings true as well—based on both Confectioner’s meetings with company executives and on responses we
received from candy vendors interviewed in our Distributor of the Year
decision-making process.
Grocery Supply Co. services about 5,000 retailers (the
vast majority of them convenience stores) from distribution centers in
Sulphur Springs and San Antonio. Its parent company, GSC Enterprises, also
operates Fidelity Express/Entronics, a financial services company, as well
as a division that distributes to military commissaries.
“What it comes down to is trust and
confidence,” says Steve Shing, corporate vice president of marketing
and trade relations for GSC Enterprises. From management on down through
the ranks of employees, the distribution company works hard at maintaining
that trust and confidence.
“Our corporate philosophy is
customer-driven,” says Shing. “We’ve always felt that in
order to be a top-notch supplier, you really have to listen to your
customer, and, if at all possible, to come up with solutions to their
problems.
“We’ve always prided ourselves on our
service-level capabilities,” Shing
continues. “We’re one of, I think, two in the industry that can
offer our retailers better than a 99 percent service level.”
Responsiveness to customers applies to all of
GSC’s retail clients—whether they have hundreds of stores or
only one. Every customer is assigned an account coordinator and a customer
service representative who work to address all of that customer’s
ordering needs. The company’s size gives it substantial buying power
and transportation capabilities, from which its customers may benefit.
“They have the opportunity to know us all by
name,” says Howard Stroud, director of merchandising/purchasing for
Grocery Supply Co., speaking of the company’s retail clients and the
access they have to GSC staffers. “When they call,
they’re not going to receive just pre-recorded messages. Even if they
have only one store, they can call us directly. They get to know us.”
“Regarding our vendors … they too are a
very, very important part of the picture that leads to our success,”
Shing adds. “We put a lot of emphasis on our relationships with our
vendor community.”
A rich history
The company is family-owned. Chairman and CEO Mickey
McKenzie is the son of one of three founders, who started the business in
1947 in Mt. Vernon, Texas, which is not far from Sulphur Springs.
Like many of Grocery Supply Co.’s staff members,
snack and confections category manager Pat Goggans has a long track record
with the company. She’s been with GSC for 30 years, and candy has
been a constant in her category management responsibilities, which at
various times over the years have also included beverages, dry groceries
and tobacco.
“Pat is first and foremost
customer-oriented,” says Stroud. “When she looks at something,
her priorities are: Is it good for the customer? Is it good for Grocery
Supply Co.?”
Here’s a look at a few of the programs the
company has designed to benefit both its retail customers and its vendors.
The Advantage Program – This quarterly publication
provides retailers with the opportunity to pre-book seasonal products, floor
shippers, counter units and multi-case promotional packages offered by vendors.
“It gives retailers the opportunity to plan early for their upcoming quarterly promotions,” says Stroud.
“It gives retailers the opportunity to plan early for their upcoming quarterly promotions,” says Stroud.
It’s proven to be an effective vehicle for
generating incremental sales volume, reports Stroud, who was hired 11 years
ago to establish such a program at GSC. “It’s not designed just
to sell one box here or one box there,” he observes.
Each Advantage publication has from 100 to 120 pages;
candy accounts for from 50 percent to 60 percent of the featured items in
the publication.
MarketPulse Bulletin –
This weekly bulletin provides retailers with information on new items
available at Grocery Supply Co. It features product facts, including
pricing, allowances and item numbers for ordering. The publication also
details the latest industry news and marketing trend information to aid
retailers in developing their merchandising strategies.
“These publications are our main methods of
contact with our retail accounts,” says Goggans. The MarketPulse
bulletin, in particular, helps to ensure that retailers get access to new
product information early on. This way, says Goggans, “they’re
seeing the items at the same time that we do.”
Marketplace – Each year, Grocery Supply Co. hosts an annual trade show in
Arlington, Texas, for its retailer and vendor partners. The two-day event
provides an opportunity for vendors to show off new products and allows
time for retailers and vendors to get together for strategic planning. It
also features a number of educational sessions, usually vendor-sponsored.
Retail relationships
Grocery Supply Co. is the nation’s fifth-largest
convenience store distributor, and the company fittingly has assumed a
leadership role in industry-promoting endeavors. Shing, a 29-year veteran
of GSC, directs purchasing, program development, foodservice and government
affairs for the corporation.
In January 2005, he will assume the role of chairman
of the American Wholesale Marketers Association; he also currently serves
as chairman of the Southern Association of Wholesale Distributors.
Over the course of the past year, GSC was a big supporter of
AWMA’s multi-vendor-endcap program created to help bolster snack category
performance. That association-led initiative developed an endcap featuring top-selling
snack items from a series of vendors. Retailers were encouraged to place it
in a prominent, front-of-the store position. Currently, 862 of the stores Grocery
Supply Co. services are participating in the endcap program.
“We’ve seen sales grow phenomenally on the items that were included,” says Goggans.
“We’ve seen sales grow phenomenally on the items that were included,” says Goggans.
Shing has a descriptive term for such
efforts—“coop-a-tition. It’s actually cooperating with
the competition,” he says adding that he hopes to see vendors team up
on more such joint ventures.
Exit planning
Asked how he’d like to see candy vendors
improve, Howard Stroud has a ready answer: Develop an exit strategy for
their products.
“We see a lot of new items, and they are
undoubtedly a catalyst for category growth,” says Stroud. “But
we don’t see enough concrete exit strategies for the product entries
that do not succeed. If you’re a retailer, you have to look at [the
issue of] what am I going to do with everything that is left sitting
here.”
Vendors offer allowances, but these “may
or may not be sufficient” as a vehicle for dealing with unsold
products, says Stroud.
He sees an excellent opportunity for manufacturers to
get distributors involved. “Why not have an authorization for the
distributor to pick up products or to have products returned to the
distribution centers for credit?” he muses.
This is a critical issue, Stroud emphasizes, because
if retailers are confident that vendors will be responsive when a product
fails to perform as hoped, they’ll take on new lines more readily.
And that is good news for everyone. n
Retailer Incentive Sweepstakes
One of Grocery Supply Co.’s most popular
programs—with retailers and vendors alike—is the Retailer
Incentive Sweepstakes.
In the program, vendors sponsor products they’re
seeking to promote. By purchasing manufacturer-sponsored products,
retailers qualify for chances to win a trip for two to the current
year’s exotic travel location.
The way the program is structured—with drawings
for three winners each week over the course of a 20-week
period—allows both small, independent retailers and larger chains a
good shot at winning, rather than rewarding customers strictly on the basis
of total purchase volume.
"We do that differently than a lot of
companies," says Howard Stroud, director of merchandising and
purchasing. "It’s not based on total sales. It’s a
sweepstakes so everybody gets a chance to win."
An added benefit is that the trip delivers a great opportunity
for vendors and retailers to network in a relaxed setting. "That’s
what is so good about it," says Pat Goggans, snacks/confections category
manager. "Our vendors and Grocery Supply managers and our customers are
all spending time together."
"It’s a great opportunity for all of our partners," Stroud agrees.
"It’s a great opportunity for all of our partners," Stroud agrees.
This year’s winners will be treated to an
eight-day/seven-night Hawaiian Cruise aboard the Pride of Aloha cruise
ship. Past destinations have included Austria, Alaska, Ireland,
Switzerland, Acapulco, Cancun, Hong Kong, Rome and Rio de Janeiro, among
others.
Entry forms are included within the MarketPulse
publication Grocery Suppply Co. uses to hype new products and may also be
obtained from company sales representatives.
Nurturing the Spiritual Side of a Business
Ethics and decency aren’t merely lofty ideals at
GSC Enterprises. They are at the core of how business gets done at this
57-year-old company.
On the day of Confectioner’s visit this fall, for example, President and COO Larry
Kerns had just returned from visiting the company’s Pensacola, Fla.,
warehouse, which had sustained substantial damage from Hurricane Ivan.
Traveling there over the weekend in the immediate
aftermath of the devastating hurricane was not particularly convenient, but
Kerns felt that it was important to do so in order to get a first-hand look
at conditions and to reassure employees in Pensacola that GSC was committed
to rebuilding the warehouse.
Management at GSC is seriously committed to making the
company a good place to work for its more than 1,000 employees.
One of the ways the company pursues that objective is
via its participation in Dallas-based Marketplace Ministries, an
organization that provides GSC with chaplain service. Through the program,
all employees who wish to do so may make use of the chaplain service for
weddings, funerals and personal counseling.
The company hosts spiritually focused luncheons for
employees once a month. "The idea is for our employees to get to know
each other outside of the workplace setting," says Kerns. He notes
that this allows members of the GSC team "to have a sense of the whole
person, not just the employee and to understand one another’s issues,
to have a sense of what they may be up against."
The Marketplace Ministries initiatives have been
warmly received by GSC employees. About 23 percent to 24 percent of
employees participate in them. The participation level in such programs is
more typically in the 10 percent range, Kerns notes.
The programs are completely voluntary, Kerns stresses,
noting that while offering such spiritual support services is a nice perk,
it’s critical that employees do not feel pressure to participate.
Meet Pat Goggans
Title: Snacks/Confections Category Manager
Family: Husband, Jim; two sons, Brandon, a Navy pilot, and Wes, an engineer; two granddaughters, Caroline and Bailey.
Academic Background: Majored in journalism at the University of Texas
The Fun Part of the Job: "The people. Watching a new item become successful."
The Challenging Part: "Keeping up with the paperwork. Dealing with the excess items."
Time-Saving Strategy: Using e-mail effectively
Outside Interests: Golf, scrapbooking
What She Might Be Doing Otherwise: Operating a scrapbooking store
Words to Live By: "Life is a journey. I want to appreciate every day."
Something She’s Always Wanted to Do: To own an airplane and learn to fly it
Family: Husband, Jim; two sons, Brandon, a Navy pilot, and Wes, an engineer; two granddaughters, Caroline and Bailey.
Academic Background: Majored in journalism at the University of Texas
The Fun Part of the Job: "The people. Watching a new item become successful."
The Challenging Part: "Keeping up with the paperwork. Dealing with the excess items."
Time-Saving Strategy: Using e-mail effectively
Outside Interests: Golf, scrapbooking
What She Might Be Doing Otherwise: Operating a scrapbooking store
Words to Live By: "Life is a journey. I want to appreciate every day."
Something She’s Always Wanted to Do: To own an airplane and learn to fly it