For Smith's chief, key is making each customer count
If feedback is a gift, then almost every day turns out to be Christmas for Mark Tuffin, he likes to joke.
Tuffin, president of the Kroger Co.'s Smith's division, is responsible for 133 Smith's Food & Drug Stores in Utah and six other Western states.
He views his role overseeing 15,000 associates as a collaborative effort, an approach reflected at his headquarters office in Salt Lake City.
Tuffin, 52, has an open-door policy, but he is in the office only two days a week. He spends the other four days on the road, talking firsthand with employees and shoppers throughout the Intermountain West.
"I take an informal approach," he said. "I like going to stores, talking to people and looking to see what customers have in their baskets. Feedback is how we get to that next level of innovation."
He has not changed the configuration of his office since he was named division president last year. The most dominate feature is not his desk, the cream colored couches or artwork selected by associates. It's a long, well worn conference table situated directly inside the entrance door.
Focus on customers • Tuffin's vision is unwavering. Smith's goal is to cater to each shopper, with targeted coupons mailed to households and promotions geared to keep customers coming back. Smith's had launched Fresh Values cards before being purchased by Kroger Co. in 1998 but the parent company has taken the concept to a higher level by researching purchasing information and matching it to individual shoppers.
Cincinnati-based dunnhumbyUSA, which analyzes data, crunches the numbers for Kroger, which owns a 50 percent stake in the firm. Other clients include Coca-Cola,General Mills, Procter & Gamble, Kellogg's, Kraft Foods and Macy's.
"We have the ability to talk to each customer on a one-to-one basis," said Tuffin. "We want to extend offers that are relevant to you. We want to understand you better than anyone else."
Customers are not only matched with the right coupons, they also are personally notified when any of the products they have purchased are recalled. In addition, loyalty cards are linked to the chain's rewards fuel program in which customers can save up to $1 per gallon when they gas up at any Smith's fuel centers. Last year, the offer was extended to participating Shell stations, where customers insert loyalty cards and then follow prompts at the pump for the savings.
Smith's operates 71 fuel centers in seven Western states, including 37 in Utah. Shell operates 27 stations in Utah, and has a network of 6,100 stations in the West.
Loyal customers accounted for an industry-leading 33 consecutive quarters of positive same-store sales, Kroger Chief Executive Dave Dillon said at a March company conference. The strong performance rewarded shareholders last year, he said, with adjusted earnings of $2 per diluted share, a 15 percent increase in earnings over 2010. The company also increased its quarterly dividend payment by almost 10 percent.
Cutting edge grocery marketing, pushed by Kroger and other chains, is what drew Tuffin to the United States.
Before joining Smith's, Tuffin had worked for Tesco, based in the United Kingdom, the world's third-largest retailer, behind Walmart and Carrefour, based in France. Tesco, in partnership with the United Kingdom-based dunhumby, helped pioneer the use of grocery customer loyalty cards in the U.K.
In the United States, Smith's, California-based Ralphs and King Soopers, founded in Colorado, were among the first grocery chains to introduce loyalty cards in the mid-to-late '90s, shortly before merging with Kroger. Today, 85 percent of households have Kroger customer loyalty cards in the 31 states where the company or its division stores operate, which equates to half of all U.S. households.
Starting out • Tuffin started his career in the grocery business while studying economics in Maidstone, England. He held various positions with other retailers before joining Smith's in 1996. Three years later he was named vice president of merchandising. In 2009, he was promoted to vice president of transition at Kroger.
He describes the assignment at Kroger's Cincinnati headquarters as a balancing act. Divisions in dozens of regions are to reflect state and regional characteristics, while implementing efficient corporate practices, focusing on areas "customers don't see" that save money. Another unseen area is employee development, which he sees as a critical element of Smith's success.
Smith's pays for employees' educations, including college courses, Spanish-speaking classes and relevant continuing education.
"We don't want our associates to think of this as a summer or temporary job," Tuffin said. "We want them to consider working here as a career."
Thirty-year company veteran Jerry Vincent, who started as a bagger and today is a management trainer, said employees can follow a number of career paths.
"One of the great things about Smith's, is that you can channel your efforts by going into store management, training, operations, or you can specialize in a specific department. I have tended to change positions, which is refreshing. Here, as long as you follow a certain path, you can pretty much go in any direction you want, and you can get there in a short period of time."
Smith's has weathered the economic downturn, hiring 850 people in the Intermountain West during the past year. And, added Tuffin, associates are among Smith's most loyal customers."
"What makes Mark particularly effective is his focus on our associates and helping them to grow in their own careers. He's been a mentor and friend to many throughout our company," said Rodney McMullen, president and chief operating officer of Kroger. "Mark's emphasis on building people up helps our associates to better serve our customers."
Tuffin was named Smith's division president last July, replacing Jim Hallsey who retired after working at Smith's for nearly 50 years.
Workers are assets • Employees are the key to offering customers a shopping experience, says Tuffin, which he describes as how people feel while they are in the store. The experience includes intangibles, such as how long they must wait at the checkout stand. In fact, each store electronically records shoppers' time spent, with improvements measured to the second.
Dave Davis, head of the Utah Food Industry Association, said Tuffin also has continued Smith's tradition of contributing "a staggering amount" to the community. The month of May marks the chain's annual campaign to raise funds to help young patients at Primary Children's Medical Center. Since 1992, Smith's has donated $7.5 million to the medical center.
The mission matches that of Kroger, which has helped in the fight against hunger in the United States for the past 25 years. Every Kroger regional division works closely with more than 200 Feeding America Network food banks. In Utah, Smith's in 2008 was the first Utah chain to donate bakery, dairy products and meats nearing expiration dates to feed needy people. Smith's also worked with vendors to provide money to help food pantries buy trucks to pick up the perishable items and freezers to store the meat, an important but scarce commodity for needy families.
Tuffin acknowledges that Smith's work with food pantries and fund-raising efforts may not be well known, but "most importantly, it's the right thing to do."
Colleagues describe Tuffin as an approachable but competitive man, who works and plays hard.
"He's intelligent, kind of a foodie and he has a talent for merchandising," said Ken Kimball, vice president of merchandising for the California-based Ralphs Division. "He's also an avid golfer, a snowmobiler and he likes motorcycles. He enjoys life, and has a good work-life balance."
Tuffin and wife Tami have three daughters. The couple goes on motorcycle trips with friends, but Tuffin has yet to take in a scenic area during the times he's on the road, visiting stores.
"I'm an outdoors person and when I'm off I like motorcycles, snowmobiling and golf, something to get the adrenaline going," he said. "Frankly, I like everything I do."
Smith's Food & Drug Stores
Smith's division • 133 stores in Utah, Nevada, Arizona, New Mexico, Montana, Idaho and Wyoming, employing 15,000 people
Parent company • Cincinnati-based Kroger Co., the nation's largest traditional grocery retailer, employing 338,000 associates
Retail stores • Kroger, Smith's, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry's, King Soopers, QFC and Ralphs
Other businesses • 785 convenience stores, 359 jewelry stores, 1,035 supermarket fuel centers and 40 U.S. food processing plants