ITCO Episode 20: Gordon Reid, President of Stop & Shop

[Music] hi I'm Jim Brett president CEO of the New England Council thanks for tuning in to this month's episode of inside the corner office where we catch up with the leaders of some of our Region's most well-respected businesses and organizations to learn more about their career paths and about the institutions they lead this month I had the pleasure of talking with Gordon Reed the president of one of New England's most well-known brands stop and shot Gord and I talked about his career it's taken him quite literally around the globe as well as some changes that the popular supermarket chain has recently announced and as September marks hunger action month we also discussed stop and Shop's steadfast commitment to combating food insecurity and hunger in the communities it serves as always I thank you for tuning in and I hope you enjoy the conversation good it's great to see you and thanks for taking the time to join me today it's a pleasure Jim yeah we always like to start these uh conversations learning a little more about our guests and their career path and you have a a very interesting background to say the least you're from Scotland and uh you've spent a significant amount of your Korea there and but you've also worked in Hungary and Hong Kong and uh India India and China tell us a little more about your career path and how it's taking you around the world sure um gosh about over a lifetime ago 40 years ago I qualified as a pharmacist in the UK right and I worked with boots the chemist there for 15 years uh so one of the biggest uh Health and Beauty chains in the United Kingdom worked all over the UK from a pharmacist to a general manager leading 450 stores at the time I left there and I was approached uh in 1999 by the as Watson group uh and it was just at the start of international retailing really taking off in the UK um and they were a Hong Kong based organization part of Lee King's Empire so they had some health and beauty stores and they wanted to be the boots of Asia so they wanted to recruit me to help with that so I spent seven years with them three years in Hong Kong and for in Taiwan a bit of time up in South Korea um doing a joint venture with the LG group I was then approached by Tesco so that to join them in Central Europe um and that was my move into grocery retailing so I was the Ops director of the Hungarian business um spent three years uh there sort of getting the business back on its feet and then I was asked to go to India to do a joint venture with the Tata family help them with their supermarket business so did that for three years then went to Taiwan and ran the Tesco business on the east coast of China based out of Shanghai for two years I joined the dairy farm group um back in China as the CEO of China for them looking after supermarkets in Taiwan Health and Beauty in China and 700 711 stores in guandong Province and then I was approached by iold to come the US and join them here so I ran the Giant Food business for six years and I've been in uh Boston now with stopping shot for five so that's a Whistle Stop tour of my career so it's been fun to be an adventure but um yeah great experience so how has the uh that extensive uh International experience shaped your approach and how you uh work day in and day out yeah I think it's um it's all really understanding the customer and working at some of those cultures really sort of uh when I first started going to the different countries I would drop into the subway I go around in a car i' visit different locations and areas especially in the food industry understanding different food you can imagine North India to South India you know different parts of China the different uh uh tastes that people have you walking the markets and understanding how people sell and that translates I think into any country you know it's really understanding the customer and how they behave um and then how do you sort of meet those needs you know you know Stop and Shop is been in the news in recent and following the announcement that you'll be closing you know some stores here in New England New York New Jersey I think some 32 stores can you give us a little more insight and why and how this decision was made sure well in running our business we have closed stores in the past you know um and every time we have a renewal of a a a rent contract or a lease contract we'll review the performance of the stores and we've done that this a key part of our business as we move forward you we've been around for 110 years and different markets change at different times um and this decision I really get is a tough one um but it really is accelerating some of the closure those of those underperforming stores and the reason behind that is really to focus our uh our assets and our sort of team on driving the profitable part of the business and giving the customer you know using those resources to give the customer what they need in the rest of our business so it's say really tough decisions but I think uh it's the right thing for our business I mean obviously it sounds like a strategic move how can you uh maybe expand and elaborate how those Investments are expected to uh to benefit your customers yeah but what was also announced at the time that we s spoke about those closures and it was then um Market Day with a Del ha USA and um our CEO um making the the comments really we also we mentioned closures but we also said we're going to invest in price you know in you price in the business um over the next four years um we're going to keep remodeling our stores we've all already remodeled 190 of our stores to give the customer a much better experience we'll continue that and we'll continue to sort of offer Great Value to our organ our customers and looking after our people um so I think the the closure part really caught a lot of attention but nobody really mentioned the the other two elements which I think are real positives for our customers uh and our teams you know regarding the uh the employees and the communities affected by these closures what measures are being taken to support them well we've what we said as we made the announcement that we would look after all the employees and we' be offering uh roles for other employees in different stores so that's what we're doing we're in the process of making these announcements and we talking to our Associates as to um where which stores we can go to the system stores and keeping those in a in a job um in some communities where um we've closed the store we've also found someone to replace us so we'll make some announcements on that soon so five stores already we've found a a replacement retailer to go in there who's Keen to serve that Community um and so we're doing all we can to sort of do the right things by our Associates do the right things by the communities and that's something that stopping shops always been proud of and we'll continue to do that you know Stop and Shop is of course a household name here in New England and I'm sure many of those tuning in regular Shoppers I hope they are H but I think uh what people may not be aware of uh is some of the company's incredible work that you do to support our communities so let's just take a moment to talk about some of those initiatives one of in particular I know that you're very proud of is the school food pantry program can you tell us a little more about the program and how it's impacting the community that you serve sure as a food retailer we feel we've got a responsibility in hunger and we've always had that responsibility with supported food banks you know throughout our whole history and in the last few years we've developed this food pantry program or School P food pantry program where we are opening in sort of areas of need in the schools we're opening in a food pantry um where the children and kids uh and it goes from some K2 almost into colleges as well where the students can come and take food uh in the morning they can come and take food home in the evening to help feed them in their families and the big Focus for me is look I think that and my family were this way it was education is the thing that takes you out all the cycle of you know poverty that and and difficulty that you have I believe and you know 20% of kids go to bed hungry every single night you know and when you come to school if you're hungry there's no way you can concentrate and get the grades that you need and contributing the to your own development and so the food pantry program came out really that belief and so we now have 240 uh food pantries that we we support uh serve something like four 40,000 families each uh month um and really you know it's something we're incredibly proud of and we'll continue to grow the target is to get to 400 uh one for each store that we have um and there's a really great process in place that you know the school appli we then go along and work with them what's really exciting is the kids actually get involved in setting up the food pantry and they get involved in serving their colleagues so again it just gives that sense of community uh to the to the school and and I think uh something that really is is working well what are some of the other ways stop and sharpers supporting our local communities yeah I mean we do so many things um you know food banks have always been the uh a big Focus for us so we support all 11 food banks across or footprint we're the biggest donator of cash and in kind um we um offer we're the first retailer to offer snap online for our customers we work with the dimi center in Boston which is a fantastic Center that really helps Rehabilitation um we put a food pantry in there um we in grall remodel their store we put a nutritionist into in Roxbury a nutritionist into the store there and working with the community um um you know we're putting we work with cancer research and pediatric cancer in particular we're putting a food pantry into the Donna Danna Faber cancer P cancer hospital um and really just you know a whole lot of different ways we support the lgbtq community through our args and the veterans community um and the stores individually can do things in their own uh their own store with their individual Community depending on the needs and Associate Associates can apply for a a stip end to help sort of fund that so that's something again that we've done in recent years as you mentioned the September is a hunger action month and we we know that access to healthy food and the community is great importance uh right now but how is again Stop and Shop focusing on promoting healthy eating yeah it starts where we start with uh we have a target for healthy sales of our own brand product so we have a system in stores on on our own Brand Products called guiding stars and a product gets one star two star or three stars or no stars depending on how healthy it is so customers can easily go and S of choose the a guiding Stars product and then they're sure to be getting a healthier product we are actually expanding that to include all of the Branded products as well so at the moment 60% of our own brand products are healthy products that are being sold and we intend as they to to sort of uh expand that to to branded and that's something that we're promoting we're letting customers know that information so when they go to stores they can choose healthy we also have nutrition Partners so we have a team of uh nutritionists that do online sort of um uh workshops and education uh they go out into the community uh and they also help us drive healthy assortments in our categories and healthy promotions as we as we work way through a promotional uh calendar you know in just a few weeks the New England Council will be honoring the homebased program and its executive director General Jack Hammon with a New Englander of the Year award I understand that Stop and Shop uh also has a partnership with home base and uh to support our Region's veterans and their families tell us a little more about that program well home Bas is an incredible organization and general Hammond is a a great individual I've met him a couple of times and know the work he does our um associate uh Retail Group focus on we have one that focuses on Veterans and they work closely with Homebase to support them and the the work that they're doing you know so we basically uh on the um recently we've worked with them on the Fenway uh run uh that they do recently with us Associates working there and we have an annual veterans dinner that we bring veterans into the head office and have them sort of serve them a meal and they leave with a a turkey and all the sort of trimmings for Thanksgiving you know in uh in in recent years we've seen uh companies of all types focusing on more on concerns about climate change uh can you talk about how Stop and Shop is contributing to Environmental Conservation sure but one of the biggest challenges in food retailing is food waste you know and there's way too much food gets uh diverted to landfill so we have the last number of years had a program to divert waste and last year we diverted 7 to 8% of our waste away from landfills and that is really through the Nations working with groups one of those that you have yourself that you support Jim and helping sort of give food to to Really worthy causes and and institutions so 78% of our uh food waste is diverted away from landfill the targets to get to 90% which would then make us a zero waste organization um we make food donations every year so last year was 21.1 million pound of food donated we have an anerobic digestor at our um uh DC facility that any sort of uh other food that can't be donated is gets turned into energy which is a novel idea it really helps power the the DC and a lot of local sourcing through local suppliers helps cut down transport costs we've also eliminated plastic bags from our business which had some controversy but we then started to really encourage people to use reusable bags because we I think it's 900 kilotons of plastic that we've saved by doing that so yeah we've got clear CO2 Comm uh emission uh targets as well by 2030 and 2050 across the whole of a whole Del ha so it really is an important issue for us given the uh New England council's mission of advocating for federal policy we always like to wrap up these conversations just taking a few minutes talk about policy priorities uh like so many issues today the farm bill has become extremely partisan and we've seen delays and delays in advancing the 2024 farm bill this certainly must be extremely frustrating for organizations like Stop and Shop but what are your priorities for inclusion in this bill with when it hopefully does move forward yeah I mean the bipartisan passage of the farm bill is integral to keeping America's food system strong and safe you know and through our relationships with the food industry Alliance FMI and our state grocery trades we strongly encourage a farm bill that strengthens the entire food chain from Farmers to manufacturers and to uh retailers like Stop and Shop and our customers it's really important for them who rely on us for nourishment and feeding assistance program like Snap and the school summer uh meals and it's been really encouraging that a number of our states that we operate in have step moved ahead with the summer meals program which is making a difference to a lot of people but the farm bill really needs to move forward we totally agree and it's a bill that's high on our priority and hoping that the parties will come together and pass this because it's so important um organized retail crime big issue and the theft has become major topics throughout our nation as a retailer there operates in some of the most populated cities in the country what has Stop and Shop been able to do to collaborate with leaders in the city and the state and the federal level to combat retail crime yeah I mean retail crime really has become and it's an important topic and it's become an organized crime um and so you have the petty theft that we all it really has become an organized crime with crime Rings um you know sort of uh taking advantage of this um and really with limited a um limited sort of a punishment for those sort of crimes if you like you know people can steal up to a certain amount and have no charge whatsoever in Boston we work with mayor woo who's been a great help um in some of our stores to really sort of help work across the uh the police and other agencies to help us sort of uh control some of the problems that we've had in the cities in particular so it's great when I think we can call on the mayor to asked for support and ask for help and she was incredibly generous in in in doing that um but it really is a a massive problem it has a big impact on society you know if we get to a point where we spoke about store closures you know grocery retailing despite what everyone says at the moment is a razor thin margins and theft you know you know the theft that we're experiencing now really can be the difference between a store staying open or a store closing so it really is something that you know we've got to pay attention to and we can do with all the support that can be given you know and I know I've spoken to you about it Jim and you were tremendously supportive so I appreciate that so what is the margin of profit is it one two percentage points and people always now and now more than ever are questioning the profits of you know some of the the larger you know uh grocery chain and and not not just the one or two% but what dollar amount are we talking about on retail crime retail gosh I mean if you I mean we don't really disclose numbers in terms of bottom line profit but if I look at sort of uh we have some stores in certain areas where our shrink is 5% so for every $100 we sell we lose $5 you know and that's some of the extreme uh areas it's like you know but it's not just um limited to you know a few areas it really has become a bigger issue as people struggle in the economy across all of the stores you know but um you know your margins in grocery are are are thin you know um and you know with the inflation that we've had in recent years there's just extra challenges there you know it's transport it's fuel I mean every week we sort of measure the um Commodities you know and understand that we have an economics group who you when we get a price increase from A supplier we have a what we call a sh cost system so they'll look into the price increase so evaluate what's been the price of the commodity transport fuel all of those things and then do we accept the price increase or not you know um and in recent times with the way things have gone it's been it's been difficult to to stop those increases coming through so you know we need to get back to lower inflation um you know fighting inflation and then working together to to manage the the the the cost of groceries to people you know uh it's not something that's an easy you can just switch off otherwise you know you will have you know closures you will have uh damage to businesses and that's not something that you you want to happen you know uh so you know I mean I remember in Co when Co broke you know and there was talk at that time I saying we'll close the supermarkets you know there was kind of people weren't really clear how to to deal with it but if you switch off you know food availability uh then it becomes a difficult and a challenging time you know and I've worked in some countries where you know food can be scarce and could food can be difficult um and that's something you don't want to see in in you know the US you know with h any sort of activity that limits you know pricing is supply chain a problem any longer Supply there's still some suppliers are sort of struggling but it really is back to a much stronger position you know the last couple of years have been tough um but it's it's getting back to you we normally operate at 95% availability we're at 90% of the moment um and that's something that we just keep edging up and edging up but again some suppliers you know have have struggled you know the pet industry in particular seems to have struggled um a lot of it is can be the packaging as well as the the product material so it really is a whole mixture of things that are still impacting industry but it's much better well good I just want to thank you for taking the time to join me today I really enjoyed learning a little more about stop and shops involved in our community I know firsthand of your involvement in in our food pantry in Dorchester and you you've been there on so many occasions and you've helped so many families and you've done it in a very quiet way I might add and you should be congratulated and recognized for your involvement in the community I know you've done that throughout uh New England so you're not just there in the community making a profit you're there to be part of the community to make the community more vibrant and I just thank you for that and I appreciate you saying that yeah and I hope our audience also realizes that you're uh you are part of the community and uh and you are to be commended and I just I read earlier all your involvement that's so many so many Gable initiatives that you've taken a leadership you mentioned a couple day on the veterans and the food pantry and but so many others the environmental and I mean you've taken a leadership role and uh you are to be commended for that so needless to say we all agree that stop chop is an incredible New England uh company and we really appreciate all your contributions to our region so uh for those of you who are tuning in today hope you enjoyed our conversation be sure to tune in next month when our guest will be Lisa whan who's now the New England president of National Grid e