Lessons from the Financial Crisis
Letter from the Dean
Thought Leadership: Faculty Research
Not Too Big to Fail
Alumni Weekend 2014
Stew Leonard's Big Idea
Blending Fun and Function
until you reach the prepared fruit plates and cranberry walnut salads, Stew Leonard’s barn aesthetic comes across as homey kitsch, just a few steps past Trader Joe’s light thematic flourishes. But then you hear the singing. “Down the old aisle with a shopping cart / Having a good ol’ time in Yonkers town / Yeehaw!” The tune projects down from three animatronic cows in cowboy hats perched above the open refrigeration unit. The cows look at each other and then the shoppers, with heavy lids occasionally bobbing over unnaturally wide eyes. As first-time shoppers take in all the entertainment packed into the supermarket’s aisles—a chorus of butter sticks, chickens doing a jig from their pens, employees in cow costumes—you might expect a similar expression. “Most kids don’t like grocery shopping, but we try to attract families. We try to make it an adventure,” says Stew Leonard Jr. (’82), the store’s president and CEO.
Stew Leonard’s opened in 1969 with eight items and seven employees. The initial idea was to put the family’s dairy farm in Norwalk, Conn., which had been powering a local milk delivery service, to more current use. A decade later, the dairy-turned-grocery store had expanded to 232 employees, 400 items and an animatronic animal or two. The key to expansion has always been careful curation.They maintain a limited inventory that appeals to their core consumer, who came early on to expect an emphasis on fresh items, rather than the huge stock of shelf-stable products that many stores offer. Even today, it’s a point of pride that they only carry 2,000 items—not 30,000. “It’s not trying to be everything to everyone,” says Stephen Spiller, an assistant professor of marketing at UCLA Anderson. “It’s easy to have inventory creep, but they stayed true to their customer base.” While full-service supermarkets have become the norm, the niche shopping experience of Stew Leonard’s retains its appeal, perhaps even more so now than when the chain opened, though for different reasons. Stew Leonard’s plays into the ultra-current farmers’ market trend, catering to shoppers who like to pick up fresh items frequently, and who are looking to have a family-friendly experience.
Enhancing that experience is a single wide lane that snakes through the store flanked by expansive displays of bread and oranges and butter. “Most grocery stores look the same; they’re a grid,” says Leonard Jr. “Our store is one big continuous aisle with production departments in the middle.” The inspiration: Disneyland’s ride, It’s a Small World.
The emphasis on family exists internally as well. Stew Leonard Jr. took over the company in 1987 from his father, who founded it. After graduating from UCLA Anderson in 1982, Leonard Jr. came into the leadership role looking to apply a corporate framework to his family’s business practices, while maintaining a sense of community among team members. The change, he said, was like calculating the true cost of a big Thanksgiving meal and getting tough about what turkey preparation makes the most sense—without losing the sense of a family dinner. To do this efficiently, Leonard Jr. began treating every department like its own startup, encouraging not only internal goals and accounting, bxut unit-specific brainstorming on new products and opportunities for innovation.
Employees working on the floor were also brought into these discussions—and still are. “The emphasis on the culture among team members in order to better serve customers—and the degree to which they go out of their way to show it—carries over in customer reactions to it,” explains Spiller. It builds loyalty to hear 82 percent of management was promoted from within and 30 percent of team members are related to someone that works at the store.
The strategy has cultivated a loyal group of regional followers. In the Northeast, farmers’ markets don’t stay open year-round. But customers can get their farm-to-table shopping experience at Stew Leonard’s, with a side of vibrant entertainment. X