CEO of the year: all smiles at Marsh.
Don Marsh heads a billion-dollar-plus supermarket chain and helped create the industry's most comprehensive study
A buoyant Marsh Supermarkets Marsh Supermarkets is a retail food chain headquartered in Indianapolis, Indiana, with stores throughout Indiana and parts of Ohio. History
Founded in 1931 in Muncie, the company went public in 1953 and has since grown to 69 locations. television spot sings, "Gonna make you smile, smile, smile." The people at Marsh will do it, too. It'll start with Don Ermal Marsh himself. He'll smile at you and you'll smile back. Everybody in the whole organization smiles.
Don Marsh smiled through our interview in his office on the fourth floor at the northeastern corner of the new headquarters building in Fishers. So what's not to smile about when at age 55 your company did $1.2 billion in sales in '92 and expects to match that in '93? You've earned the right to flash a grin if you run one of the most successful grocery chains in the country -- it is ranked 25th in size -- and can claim to be the dominant marketer in an area where you control nearly a third of the grocery sales.
As he beams, Marsh says, "I look to have a good year." And topping his company's success, he has personally gained a distinguished role as a statesman in the international supermarket community.
So it is fitting that he be honored as the Indiana Business Magazine CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of the Year. In his years at the helm of Marsh, he's certainly earned the respect of customers, competitors and those who follow the industry.
"Don has led this company into being a billion-dollar entity, with a 28 percent to 30 percent market share in Central Indiana," says Raymond H. Diggle Jr., vice president for research in the Indianapolis office of Robert W. Baird Robert Wilson Baird (born April 1, 1883) helped found the financial services firm that bears his name and led it for more than 40 years.
Baird’s father was a professor of Greek literature at Northwestern University in Evanston, Illinois, where Baird grew up. & Co. The competitive marketplace has taken a bit of a toll on the company's earnings, Diggle notes, but the company is planning for the future with a major construction and remodeling remodeling /re·mod·el·ing/ (re-mod´el-ing) reorganization or renovation of an old structure.
bone remodeling program. His new stores promise to set the supermarket standards in their communities.
Diggle says Marsh has helped his company earn a strong reputation for superior quality that has served it well in recent grocery wars, and he and his company have led the way in community service as well. "Marsh's Computers for Education program as well as its involvement in many community and charitable activities has set an outstanding example for other local companies."
He's also been setting examples for companies around the world. Marsh served as president of CIES CIES Council for International Exchange of Scholars
CIES Centro de Investigação e Estudos de Sociologia (Portugese)
CIES Centre d'Initiation à l'Enseignement Supérieur (French) , the International Centre for Food Trade and Industry, which is headquartered in Paris with offices in Washington and Tokyo.
The organization does research, education and training, studies marketing, information systems and warehousing, Marsh explains. "It serves as a catalyst between retailers and manufacturers and looks for trends on a global basis. What starts in Europe ends up here and vice versa VICE VERSA. On the contrary; on opposite sides. ," he says. "To be real honest with you, we in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. do not have an edge in supermarket development. I can take you to Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. and show you supermarkets that are more outstanding than ours. I was in South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. and saw one store with 50 checkout counters. You can go to Japan and see very sophisticated carry-out food systems. Different countries have different specialization."
Marsh has taken ideas found around the globe and put them into its own operations, the CEO says. "Our 'fresh-food concept' came out of England. Today one-third of a Marsh store is actually fresh--carry-out foods, deli, baked goods, floral items, fruit and vegetables, sit-down eating, cheese, meat and seafood. That's what That's What is one of the more idiosyncratic releases by solo steel-string guitar artist Leo Kottke. It is distinctive in it's jazzy nature and "talking" songs ("Buzzby" and "Husbandry"). the consumer wants."
Don Marsh is sure about what the customer wants because of research. He really believes in it. During his three-year term as president of CIES he helped create what he describes as "the largest, most comprehensive study ever attempted for the food industry." Titled "The Marsh Super Study," the results changed the industry's direction in terms of merchandising (see story on page 13). "The last time we had a full study was before scanning. It was done with electromechanical The use of electricity to run moving parts. Disk drives, printers and motors are examples. Electromechanical systems must be designed for the eventual deterioration of moving components that wear over time. The first TVs were electromechanical systems (see video/TV history). cash registers and it was only in the grocery area. That was 30 years ago," he says. "This one includes everything. We measured perishables for almost an 18-month period. That had never been done before. It is truly a piece of work, a major undertaking."
The study was done with financial support from leading manufacturers including Coca-Cola International, Pillsbury, Kraft, Unilever, Nestle, Georgia Pacific, R.J. Reynolds, Fort Wayne-based Perfection Bakeries and others. "Some put in about $250,000 apiece. You just don't give $250,000 unless you think there's something to it," Marsh says. "They use the findings. We use the findings. It has continuous value."
The organization presented Don Marsh one of the highest honors ever given to a retailer, the Henri Toulouse Award. "I'm very proud of that," he says. The award was named for the founder of CIES, who managed a notable grocery chain in France. It has been presented to Marsh, the first American First American may refer to:
Rio de Janeiro (rē`ō də zhänā`rō, Port. rē` thĭ zhənĕē`r .
In his world travel he's even found business opportunities. "There are 900 million people in India," Marsh says, "so we've started a partnership there. We opened a supermarket with some Germans and are getting ready to open our second store in New Delhi New Delhi (dĕl`ē), city (1991 pop. 294,149), capital of India and of Delhi state, N central India, on the right bank of the Yamuna River. . This came out of a CIES contact."
Marsh knows his company is in good hands while he's on the other side of the globe because of heavy family participation. How heavy? Marsh smiles, "We don't really talk about the family's ownership position." There are rumors in the trade that they vote about a quarter of the shares.
The founder's widow, Garnet Marsh, and the three sons hold seats on the nine-member board. The boys also have three of the top five executive positions in the company, with Don as president and CEO since 1978 and chairman since 1991. Alan Marsh is vice chairman of the board and senior vice president of corporate development. Bill Marsh is vice president and general manager of property management. Don's son Arthur Marsh Arthur M. Marsh was an American politician from the state of Michigan. Marsh was from Allegan and was Chairman of the Michigan Republican Party from 1898-1900. References
Dexter M. is director of grocery merchandising. Son David Marsh David Marsh is the men's and women's swimming and diving coach at Auburn University. Since becoming head coach in 1990, Marsh has led the men's team to seven NCAA national championships (1997, 1998, 2003, 2004, 2005, 2006, and 2007) and the women's team to five national is director of operations for LoBill Foods, and Don Marsh Jr. is a category buyer. Daughter Anne Marsh Heerens is an artist in the advertising department. A lot of Marshes mind the store.
"I am fortunate to have brothers and children who are very capable," Don Marsh beams. "A lot of family companies don't have that. Another advantage is that we are basically pretty harmonious."
We asked our host to look back over the years. He was born in Muncie of English-Danish heritage. His family moved to Eaton, 10 miles north, and he lived on a farm for his first 10 grades. They returned to Muncie, where he attended high school at Burris School.
"In 1931 my dad started his neighborhood store downtown on South Walnut Street A number of streets are named Walnut Street:
Marsh went to Michigan State University Michigan State University, at East Lansing; land-grant and state supported; coeducational; chartered 1855. It opened in 1857 as Michigan Agricultural College, the first state agricultural college. and married Marilyn Lois Faust in his junior year. Shortly afterward af·ter·ward also af·ter·wards
At a later time; subsequently.
Adv. 1. afterward - happening at a time subsequent to a reference time; "he apologized subsequently"; "he's going to the store but he'll be back here his father was killed in a plane crash. Don dropped out to help his mother settle the estate, but was able to return to school and graduated in 1961. He majored, appropriately, in food distribution.
Draw a circle around Indianapolis with a 150-mile radius and you're looking at the Marsh distribution domain. Within this zone of influence the firm operates in a number of separate market segments.
Marsh operates 86 supermarkets, 76 in Central Indiana and 12 in Western Ohio. They account for nearly three quarters of gross sales Gross Sales
A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. . Twenty of the units contain drugstores and 35 include banks. Sixty-two are open 24 hours a day.
"Our supermarkets are divided into two types," Don Marsh explains. "The larger, newer structures of 50,000 to 80,000 square feet are 'fresh stores.' They may stock as many as 30,000 items, including 400 fresh foods from over 50 countries. And we also have our older, smaller-sized, conventional supermarkets. Some are being expanded and refurbished now."
Then there is LoBill, a pure price-cut, mini-supermarket that is a new, but growing, segment of the business. It offers bargains on a limited selection of items, some of them Marsh private-label products, in stores that typically are about 25,000 square feet. The five-unit chain is predicted to expand to 30 over the next few years.
There are 177 Village Pantry Village Pantry was founded as a convenience store chain division of Marsh Supermarkets, founded in Yorktown, Indiana, and currently headquarted in Indianapolis.
Village Pantry sells Marathon branded fuels, and have 148 convenience stores as of 2007. convenience stores The following is a list of convenience stores organized by geographical location. Stores are grouped by the lowest heading that contains all locales in which the brands have significant presence. . They provide 13 percent of gross income. All of these stores and many more franchise units are supplied by another Marsh subsidiary, the Convenience Store Distribution Co., with offices and a giant warehouse in Richmond.
Don Marsh waves one hand toward his office window and points across the meadows to a new Village Pantry. "We're into the largest capital spending capital spending
Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. program in the history of the company. We spent $26 million last year, and this year we'll spend $63 million. That's a 142 percent, or a $37 million, annual increase. We worked in Bloomington and Noblesville, we built in Indianapolis on Kentucky Avenue and out at Eagle Creek Eagle Creek may refer to:
A number of locations in Saskatchewan, Canada:
There's a lot of talk about an out-of-state competitor that is about to hop into the Indianapolis market. "Meijer from Grand Rapids Grand Rapids, city (1990 pop. 189,126), seat of Kent co., SW central Mich., on the Grand River; inc. 1850. The second largest city in the state, it is a distribution, wholesale, and industrial center for an area that yields fruit, dairy products, farm produce, ," Don confirms casually. "I've known them for a long time. They are good operators of warehouse-type stores. They'll arrive in May or June. We always prepare for competition but, really, their customer profile is not the same as ours. They'll take some shoppers but what happens is, the market just churns. The last time we had a major entry in the market our share increased from pre-entry to post-entry by 8 percentage points. Once the market starts to settle down and share of market starts to solidify so·lid·i·fy
v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies
1. To make solid, compact, or hard.
2. To make strong or united.
v.intr. , we come out ahead."
That last major entry was Cub Foods Cub Foods is a grocery store chain with eighty-four stores in Minnesota, Iowa, Northern and Central Illinois, Wisconsin, and the Miami Valley in Ohio. The company is a wholly owned subsidiary of Eden Prairie, Minnesota-based Supervalu. in the mid-1980s. Cub put a major dent in some other retailers, but Marsh came out shining. Observers don't underestimate Meijer, but note Marsh's track record. "We think Marsh can exploit its 62 years of community service, strong marketshare position and loyalty from middle- and upper-income demographic segments to maintain its dominant position," Diggle of Robert W. Baird predicts.
Marsh Supermarkets has a reputation for being people-oriented. It is gung-ho for employees, customers and the whole community. Everybody knows the company has an active social conscience. Don says, "There is a problem with that in our area today. So many companies have been taken over by out-of-state firms there are not too many local guys left out there to help the community. The pressure becomes more intense on the few companies still around. In the last two or three years I'd say our presence has been the heaviest presence of anybody's," he says.
"People are the name of our game," Marsh continues. "We have 12,000 employees and will add a thousand more with the expansion program. We have some who have been with us 45 years. If we didn't take care of them, they'd want to belong to a union."
Marsh is heavily into incentive plans to motivate its people, the CEO says. "They are what built this company. I have a philosophy, 'Find out what it is this person wants that will get him to accomplish something for the company.'"
The interview ends here, and you realize that Don Marsh is pressured to get back to his business. But he doesn't show it. He is cordial cordial: see liqueur. and genial genial /ge·ni·al/ (je-ni´al) mental (2).
ge·ni·al or ge·ni·an
Of or relating to the chin.
pertaining to the chin. , a gentle man with unswerving eyes and a quiet voice.
Leaving a while later he lifts his hand, waves and chuckles
Marsh Super Study
Nearly 2.5 billion pieces of information
How super was the Marsh Super Study? Super enough that the trade magazine Progressive Grocer devoted an entire issue to reporting some of the results.
For the Super Study, Marsh put five of its stores under the microscope for 65 weeks. A major data source was the electronic scanning system at the checkout--scanners logged information about some 62 million items worth $98 million sold at the five stores during the survey period. Additional information was gathered by following 1,600 shoppers around the stores during a three-week period, detailing their every move and purchase in order to learn how they respond to the way products are displayed. And 18,000 specials and promotional events were recorded as well.
In all, Marsh plugged 2.48 billion pieces of information into its computers to analyze for the Super Study. The results showed how much of any given product Marsh sells, how much profit it earns on each product, and how different specials and promotions affect not only the item on sale but also related and competing items.
Among the millions of facts the study uncovered:
* More than three-quarters of Marsh shoppers are women. Female shoppers spend an average of $37.51 per trip, while male shoppers shell out $27.01. A third of female shoppers use a shopping list, compared with a fifth of male customers.
* More than 40 percent of the customers are classified as "fill-in" shoppers, those dropping by to pick up 10 items or less. "Stock-up" shoppers, those grabbing 36 or more items, comprise just 16 percent of the total. Stock-up shoppers spend an average of $85.30 per trip, while fill-in customers spend $12.51. The rest of the shoppers, known as "routine" shoppers, spend an average of $39.40.
* Fill-in shoppers are more likely than other types of shoppers to buy milk, bread and cigarettes, but much less likely to grab canned vegetables.
* Self-service meat is Marsh's leading category in terms of dollar sales, followed by the deli and fresh vegetables. In terms of unit sales unit sales
Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. , the leaders were fresh vegetables, fresh fruit and bakery items.
* Selling pasta on a buy-one-get-one-free promotion generates sales gains in profitable, related products such as spaghetti sauce, ground beef, Parmesan cheese a kind of cheese of a rich flavor, though from skimmed milk, made in Parma, Italy.
See also: Parmesan and Italian salad dressing. To capitalize on Cap´i`tal`ize on`
v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. this phenomenon, Marsh often displays these items together.
* Marsh loses more money stocking frozen turkeys in the 10 days leading up to Thanksgiving than it can possibly make up on turkeys the rest of the year. The chain has found no way to avoid that loss, but knows it can't afford not to stock turkeys for Turkey Day.