Interview With Fred Meijer’s Sons

First appeared in MLive

When your last name is Meijer, there's no such thing as a quick trip to the grocery store.

It's something Hank and Doug Meijer learned at a young age by watching their father and retail magnate Fred Meijer work a crowd. Over the years, the unassuming billionaire with Greenville roots had elevated glad-handing to an art form.

A wide smile. A firm handshake. A few genuinely kind words. And, inevitably, he would draw his trademark free coupon for a Meijer Purple Cow ice cream cone from his pocket and press it graciously in someone's hand, whether he was in one of his own stores or a black-tie gala.

And while the younger Meijers do follow in their late father's personable footsteps -- forays into the family's stores can sometimes take hours after all the stop-and-chats -- the brothers who hold the reigns of the Midwest's largest family-run grocery chain remain very private about some aspects of their lives, and the operation.

In their first interview since the death of their iconic father last year, the Meijer Inc. co-chairmen shared what Fred Meijer did to ensure the business will continue to flourish under family ownership.

Fred Meijer was younger than his sons are today when he began planning for his death four decades ago by placing the company stock in a family trust so it wouldn’t be vulnerable to estate taxes. The trade-off was he no longer directly owned the company he'd built with his father, Hendrik.

Meijer isn't for sale

“Our dad was very careful planning so there wouldn’t be reasons for his estate to force the sale of the business,” said Hank Meijer, 60, who is the eldest of the three sons that includes Mark, 54, along with Doug, 58.

Selling the company has never been a consideration in its nearly 78-year history.

“We have made that so clear for so long to people who might be interested that it’s been a decade, I think, since we’ve had anyone even try to talk to us seriously (about purchasing the chain)," said Hank Meijer.

The most famous interested buyer was Walmart founder Sam Walton, who copied the supercenter concept Fred Meijer pioneered in the 1962 with the opening of Meijer Thrifty Acres in Grand Rapids.

Even though Fred Meijer didn’t have direct ownership, he was still the company’s leader for decades until turning over the reins to his sons in 1990, and taking on the role of chairman emeritus.

“When he walked in (a meeting) and made a comment, there was no question that people would listen to him,” Doug Meijer said.

“Higher Standards, Lower Prices”, the tagline in the company’s advertisement, probably best reflected Fred Meijer’s approach to the grocery business.

“He was fanatical about low prices,” Doug Meijer said of his Dutch father.

That commitment isn’t easy when your competition is Walmart, the biggest retailer in the world, and a force that commands the lowest prices in the supply chain network. The stakes are hefty in this high-volume, low-margin business.

“If we get in a price war over paper towels and toilet paper, it can be extremely expensive because of our commitment to be price competitive,” said Hank Meijer, who became chief executive officer in 2002.

Competing in national arena

Meijer often competes in the national retail arena although its chain of nearly 200 stores cover only a five-state footprint. The Walker-based company landed in the sixth spot in a recent Consumer Reports reader survey ranking of national retailers.

Hank Meijer doubts the company will become a national retailer in his lifetime. The retailer’s growth will continue to be slow and steady. He expects to see Meijer expand into additional states, but they will be contiguous to the company’s current footprint of Michigan, Indiana, Ohio, Illinois and Kentucky.

“We really like to grow organically,” Hank Meijer said.

There are no plans to leapfrog to highly populated states like Florida or grow by acquisition. Both strategies have fueled the growth of neighboring Gordon Food Service, another private, family-owned West Michigan company in the food retail business.

One area where Meijer is quickly gaining a national – and even an international – presence is online. More than half of Meijer.com sales come from outside its regional market.

The company’s steady growth made Fred Meijer one of the richest men in the state, with his name and company showing up on various Forbes' lists. Putting a number to the Meijer wealth is mere speculation -- the company is extremely private when it comes to any kind of sales numbers.

It doesn’t release annual revenue figures like other private, family-owned West Michigan companies such as Ada-based direct selling giant Amway Corp. or Holland-based office furniture maker Haworth Inc.

Supermarket News pegs Meijer sales at $14.4 billion a year.

Hank Meijer will only say that trade publication estimates are more in the ballpark than Forbes’.

“I think they sometimes build formulas based on public company returns and similar sales, and ours are often lower,” Hank Meijer said. “And so there tends to be more room for miscalculation and exaggeration and speculation than Supermarket News would have,” he said.

The family has long said that being private means it can afford to turn a smaller profit than public companies, which have to satisfy Wall Street.

Meijer in next 50 years

Without that pressure, Meijer has more flexibility to experiment with new ideas. Which is why, the company was one of the first retailers to introduce grocery carts, 24-hour format and self-scan checkouts. The big question is whether Meijer can be as relevant in the everchanging retail landscape over the next 50 years, as it has been in the last half century.

Meijer is positioned well for the future because it is a very progressive, well-managed company that puts a lot of thought into how its customers like to shop, said Mark Hamstra, retail editor at Supermarket News, which ranks Meijer No. 16 on its list of the Top 75 North American Food Retailers.

“The company has been at the vanguard of food retailing on many fronts, including its efforts around things like health and wellness, natural and organic products, and digital communications,” Hamstra said. “Its approach to providing a positive customer experience and a one-stop shopping environment should give it some legs for the long haul.”

The brothers acknowledge their father left big shoes to fill.

“We are expecting whenever we do something people don’t like, they’ll say, 'If your dad was still here, he wouldn’t approve,' " said Hank Meijer.

Hank Meijer remembers his dad hearing the same thing about his father.

“When we opened our first store in Jenison on Sunday, my dad got calls from people who said if Hendrik was still alive, this wouldn’t have happened,” he said. “We all know that isn’t the case. He would have taken care of customers' shopping when they want to shop, and we can operate with that same confidence if we are making the right decision.”

As they talk, the brothers are sitting around their grandmother Gezina’s dining room table. Her sturdy dark oak furniture now fills a room at the company’s Walker headquarters. Family photos of ancestors and oil paintings brought over from the Netherlands hang on the walls.

“You have to understand she was beyond frugal,” said Hank Meijer of his grandmother, who immigrated to America in the early 1900s with her husband, Hendrik. “That’s where my dad got it from, more than my grandfather. So the thought of not putting (the furniture) to use wouldn’t have been pleasing to (my grandmother).”

What they won't talk about

The brothers made a video early this year for their 60,000 employees to convey the message that their company will remain a family business.

Related: Fred Meijer's sons send video message to employees.

But when they're asked about the future role of the family's fourth generation -- their children and their nieces and nephews -- they get uncomfortable. The three brothers are parents to a brood of seven children who are in their 20s or younger.

“I don’t want to put any kind of burden of expectations on them,” said Hank Meijer. “I would rather not talk about it. I wouldn’t have wanted our dad to talk about that when I was a little kid or even a college kid.”

As his sons reached adulthood, Fred Meijer didn’t know if they would join the family business, although what spending money they earned during their teens came from working jobs at Meijer.

Hank Meijer began his career as a journalist, including a stint at The Grand Rapids Press writing sports while his youngest brother Mark Meijer co-founded Life EMS, a successful ambulance company. Middle son Doug Meijer went to work full time for the company after earning his business degree from University of Michigan.

Hank describes Doug as the “natural born retailer” in the family.

“Our dad was very careful to say 'I want you to do what you want to do' in career terms, all the time feeling tremendous hope and pressure on his part that we would come into the business,” Hank Meijer said.

The retailer will survive even if their children don’t go into the family business. The company’s day-to-day operation has been and continues to be run by a non-family leadership team.

“I think we have the strongest leadership we have ever had,” said Hank Meijer. “We feel very good about the future because we have a lot of great, great people.”

Leading that team is Mark Murray, whose impressive resume includes president of Grand Valley State University and state treasurer under former Gov. John Engler.

He is the fifth non-family president for the company. The tradition began in 1975, when Fred Meijer appointed Harvey Lemmen to the post.

The Meijer board – which includes the three brothers and their mother Lena - also has outside directors such as David Brandon, University of Michigan regent and athletic director, and former chief executive of Domino’s Pizza.

Hank and Doug Meijer are involved in all major decisions of the company. Their work week begins with Monday meetings with Murray and the senior management team.

While they often hear from customers and employees, they usually just pass along those comments. Their dad taught them not to micromanage.

“You never want be perceived as someone throwing your weight around,” said Hank Meijer.

That’s why their regular visits to Meijer stores don’t stir panic among the ranks.

“If there is a piece of paper on the floor, you pick it up,” said Doug Meijer, remembering another Fred Meijer lesson to his sons. “You don’t need to call a store manager.”