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    FEATURE: Succession Strategies: Generation next

    Not all family-run grocers are struggling with succession issues -- here are a few where retail still runs deep in the bloodline.

    By Jenny McTaggart

    Since the days of the first supermarket, many a grocer has lain awake at night, wondering who will take the reins when he (or she) is gone. In a family-owned company, this concern takes on an added dimension. According to one frequently referenced statistic, just 30 percent of family-run companies will survive into the second generation, and only 15 percent have a chance of making it into the third generation.

    But don't tell that to this impressive crop of up-and-coming industry leaders who are busy working on the front lines of their families' operations. The following profiles illustrate the entrepreneurial spirit among executives who are putting their hearts and minds into family-owned chains across (and, in one case, outside) the country.

    Although they certainly have concerns about competition from megachains and alternative formats, these sons and daughters (and grandsons, granddaughters, and even great-grandchildren) who've chosen to stay in the business are excited about where the industry is going. They bring with them ideas about how to appeal to future generations of consumers.

    Many of them also possess a keen appreciation for the past -- which will undoubtedly be a help as they face 21st century retailing.

    Work and play

    Greg Dierberg and his sister, Laura, fondly recall their childhoods in a supermarket family. "We would go out and look at new store sites with our dad," remembers Greg, "and then we'd stop and get ice cream. Sometimes when we'd look at a site, we'd get our feet stuck in the mud. They were getting ready to put up the foundation for a new store, and we were covered in mud!"

    Today Greg continues to get at least his hands dirty -- but now he's president and c.e.o. of Dierbergs Markets, Inc., an independently owned chain of 23 stores in Missouri and Illinois. He succeeds his father, Bob, who had held those titles since 1976 and will now act solely as chairman. (Bob's grandfather, William, founded the company in 1914.)

    Laura Dierberg Padousis also plays an key role in the company's strategic direction as v.p. and secretary. Her primary duties include forecasting and analysis.

    It's evident that the Dierberg children are extremely proud of their company's position as a provider of service, variety, value, and quality.

    "A lot of people do those things, but we try and take it to another level," notes Greg. "We operate a central kitchen with a 35,000-square-foot bakery. We offer a selection of prepared foods that's unmatched in St. Louis. We also feature a one-hour cooking show and cooking schools in soon to be five of our stores."

    As for what he might do differently with the business, Greg maintains that he wants to stay the current course, but keep an eye out for ways to build on Dierbergs' strengths. "We won't rest on our laurels," he says.

    One thing that has sustained him in the family business is the fun that comes from working alongside family, he notes. "Your family is always good to provide feedback. Not to say that we don't disagree -- because we do -- but we're all working toward the good of the business."

    The invaluable lessons he learned from dear old Dad are irreplaceable, he observes. "Attention to detail and being grounded are two important traits I learned from him."

    Laura agrees. "My dad has always taken a down-to-earth approach, really listening to his employees. The greatest ideas often come from associates working at store level."

    Leader in training

    McGinnis Sisters, a two-store retailer (soon to be three stores) based in Pittsburgh, began involving its third generation in 2004, when Jennifer Daurora came on board as business development analyst. Daurora is the oldest of the 10 children belonging to the three McGinnis sisters, Sharon McGinnis Young, Bonnie McGinnis, and Noreen McGinnis. (Daurora's mother is Bonnie.)

    Since joining the company, Daurora has developed a loyalty card program from scratch, known as "My Sister's Favorite Customer." She's also worked with her Aunt Noreen to develop a strategic plan for the company for the next three to five years.

    But as much as she focuses on the family business, Daurora notes that she ultimately strives to "keep one foot in family values and one foot in the corporate world." To her, "family values" means treating customers like family and friends, and living out the legacy that her grandparents began.

    Being involved in the corporate world means constantly pushing the business in a more competitive direction. "We want to carve out a niche and be the best performers in our segment," she explains.

    Indeed, McGinnis Sisters seems to have already found its niche: Its stores feature high-quality perishables, catering, and special customer events such as holiday tastings and cooking classes with seasonal themes.

    Daurora's commitment to corporate success also encompasses continuing education and involvement in her local business community. In addition to working as a graduate assistant at the University of Pittsburgh's Katz Business School, she's part of a Leadership Development Initiative program in Pittsburgh, in which next-generation leaders of the region are training to become better managers and better executors of business plans.

    This well-rounded executive has also had a taste of work outside the family business (a McGinnis Sisters requirement). Prior to joining McGinnis Sisters, she provided data analysis for CPG companies.

    She admits, however, that she can't imagine not wanting to do what she's doing now. "I feel lucky to be living my version of the American dream."

    Grocer of the Caribbean

    Like many retail executives, Woody Foster of Foster's Food Fair on Grand Cayman Island got his start in the business at a young age. He began bagging groceries at his father's store at age 11, after school and on weekends.

    "My fondest memory of growing up in the business is watching my dad grow the business from a small 6,000-square-foot store to what it is today," says Foster. "When we were children, we always liked to go into work on Monday to see what Dad did over the weekend. He was always adding something -- putting in more registers, knocking down a wall to expand, painting a mural on an office wall, etc. It was really exciting to watch his determination unfold in front of us. Even at a young age, we could see it."

    That keen interest in the business stayed with Foster as he grew up. When his father opened a deli on the island in 1980, he began working with him, side by side.

    Since 1997, Foster has essentially run the company as managing director. Today Foster's Food Fair, which is a member of IGA, consists of five stores under its namesake banner, one Priced Right wholesale format, one smaller deli format, and a 21,000-square-foot distribution center.

    Other members of Foster's family work at the company, too. His older brother is chairman of the group, his eldest sister is a store manager, his second sister is human resources manager, and his youngest brother is in a company management program. Four of his uncle's sons also work in the group of companies.

    Sadly, the Foster family lost one of its patriarchs -- Woody's father, David -- in July 2005. (David co-founded the company with his brother Steve in 1966.)

    Woody Foster recalls the many important lessons he learned from his father that will help him carry on the business. "The most important things I learned are customer service, honesty, and integrity. My father succeeded in his business because he went out of his way to give customers what they wanted. He opened the store earlier and closed later than anyone else, and if he didn't carry an item, he would find it for his customers, even if it meant flying in the product."

    In addition to keeping those important traditions, Foster says he plans to continue staying on top of trends to keep pace with the growth of his community and the industry at large. "One area we need to focus on is how to manage the logistics of seven locations, and having the systems in place to keep our stores consistent with our company/family mandates of doing business."

    Risky business

    VG's Food and Pharmacy, based in Fenton, Mich., is one of those regional independents that have learned to survive with supercenters in its backyard (namely Wal-Mart and locally based Meijer). Lisa Van Gilder is a second-generation family member who's been largely responsible for that success, as she's served as president and c.e.o. since the 1990s. (Her husband, Bill Ogle, works with her as v.p.)

    Lisa and her brother, Russ, who today serves as e.v.p./c.o.o., grew up watching their parents, Russell and Shirley Van Gilder, run the company's first supermarket. "My brother and I always wanted to follow in their footsteps in running the business," she notes.

    Together they've worked hard to keep customers -- and employees -- satisfied. "We consider ourselves to be the 'local' supermarket in the communities we serve," says Lisa. "The foundation of our business has always been on our customers."

    VG's boasts a major focus on fresh foods, including more than 350 homemade deli recipes, as well as pharmacies with a personal touch. "We have 13 pharmacies today, and we do compounding at our main pharmacy," notes Lisa. "This is a very important part of our overall strategy."

    She also cites the help of the company's wholesaler, Spartan Stores. "They're a great partner for the future."

    Another characteristic of this fiery independent operator is its openness to new things. As Lisa explains, VG's opened its first pharmacy in 1987, when many supermarkets were still weighing the risks of such a move. "It is this type of risk-taking and entrepreneurial spirit that my parents had back in 1961, and that continues today," she says.

    And, like any smart businesswoman, Lisa is mindful of the generation to come after her. Several third-generation Van Gilders -- including three of Lisa and Bill's children -- are already involved in various aspects of store operations.

    By Jenny McTaggart
    • About Jenny McTaggart

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