The passing of a great merchant
Robert Wegman led Wegmans like the up-from-the-trenches grocer he was, with merchandising innovation and an employee-friendly focus.
By Matthew Boyle, FORTUNE writer

NEW YORK (FORTUNE) - For over half a century, Robert Wegman held only held one job. Luckily for him—and for us—it was the only job he ever wanted.

Wegman, an irascible, pugnacious and brilliant industry trailblazer who transformed an upstate New York produce peddler into one of the most admired retailers in the world, died April 20 at the age of 87. His funeral was held Tuesday at St. John Fisher College in Rochester.

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As chairman of Wegmans Food Markets, which generated $3.5 billion in sales from 70 palatial stores in 2005, Wegman popularized concepts that today's shopper takes for granted, adding such things as restaurant-quality prepared food, in-store cafes, a pharmacy, photo lab and child play centers to his chain.

Uniqueness as a merchandising strategy

In an age where mass merchants like Wal-Mart (Research) and Target (Research) have put a stranglehold on traditional grocers, Wegman's approach to merchandising, first espoused at an industry conference in 1967, rings truer than ever. His philosophy? "To do something that no one else is doing."

But to a large extent, it was his benevolent treatment of employees that really separated Wegmans from not only its retail peers, but from all of corporate America. A perennial member of FORTUNE's Best Companies to Work For list, Wegmans took the top spot in 2005, leading Wegman to say at the time, "This is the culmination of my life's work."

That work began in 1937, when Wegman began work as a meat cutter at the Rochester Fruit & Vegetables Company, the grocery business that his uncle Jack and father Walter had started in 1916. The Wegman brothers had already distinguished themselves with their flagship Clinton Avenue store, which featured café-style seating for 300. After three years in the Marines, Robert Wegman became a store manager in 1947 at the age of 29, then president in 1950 after the death of his uncle.

Employee-friendly moves

One of his first moves as president was to give employees a bonus week's wages at Christmas, and he followed that with a slew of employee-friendly benefits such as profit sharing and fully funded medical coverage.

During a chat with FORTUNE in his office at Wegmans headquarters on a snowy mid-December day in 2004—an interview that turned out to be his last—Wegman was asked why he did this for his employees. He leaned forward, fixed his blue eyes on his visitor, and replied bluntly, "I was no different from them."

That ethos remains in place today. Before it opened two new stores last year, the company chartered jets to fly all new full-time employees to Rochester to meet with top management. And it spent $5 million alone just on training employees for its Dulles, Va., store, which opened in February 2004.

"Can we put up the bricks? Yeah. But can we train [the employees?] That's the difference for us," he said.

Over the past 20 years, Wegmans has shelled out $56 million for college scholarships to over 18,000 full- and part-time employees. Expensive? Sure. But payback can be found in Wegmans' 6 percent turnover rate in 2004, a fraction of the industry average. "I have never given away more than I got back," Wegman explained.

Robert's son Danny, now CEO, learned food retailing at his father's knee. Diploma from Harvard in hand, Danny returned to Rochester in 1969 to cut meat for his father, and in 1976 Robert handed Danny the reins, with Wegman pere remaining very much a presence as chairman and Fusspot-in-Chief. (Woe to the produce manager who aroused his ire on a store visit, though a bad hip limited his wanderings in his last few years.)

Free of day-to-day responsibility, Wegman enjoyed plotting strategy. When asked what his current role was at the company, he replied, "I'm the thinker."

He was more than that. "He is a tough hombre," said Michael O'Connor, the former chairman of the Food Marketing Institute who died earlier this year. (FORTUNE spoke to him in late 2004.) "We disagreed violently at times. But I like that old goat because I have respect for him. He is one of the greatest merchants of all time."

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Plugged In is a daily column by writers of FORTUNE magazine. Today's columnist, Matthew Boyle, can be reached at mboyle@fortunemail.com. Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.