Hands-on manager keeps grocer IGA in the green
At a time when many food retailers are reporting a mixed bag of earnings news, Chicago-based colossus IGA Inc. appears to be wheeling a full cart of success in its 75th year.
With some 4,000 independently owned and operated stores in 50 states and 37 countries, IGA is ringing up record sales and planning major expansion.
A major reason, industry watchers say: the hands-on approach of the company's chairman and CEO, Thomas S. Haggai. Dr. Haggai is an ordained Baptist minister who last month received the Horatio Alger Association's Norman Vincent Peale Award for his humanitarian contributions to society.
"I think of what I'm doing in business as my ministry," he says.
In fact, by his account, he spends as much as 40 percent of his time every week doing volunteer charity work from scholarship assistance for careers in education to helping troubled and disadvantage youth and counseling colleagues.
And when he isn't opening up new IGA outlets in Japan or South Africa, he spends much of his time counseling colleagues or executives of IGA suppliers or retail outlets on personal matters that have little to do - directly, at least - with running their individual operations.
"A lot of my time is spent with executives of our manufacturing companies who have no one to turn to," Mr. Haggai says. "They're the heads of their own companies, and who can they talk to? They can't talk about personal problems with their employees.
"So they trust me with plans about their companies, with decisions they are trying to make, with problems they are having with their children.
"Any given week, I'll be in the office for a maximum of three days and there will be people who come in and our conversation will be far more personal than [about] management," he says. "But I think that if you did that just to help the bottom line, you'd get into trouble."
Even so, such policies are paying off financially. Despite the current economic slowdown, "we're going to have a net growth in stores this year," he says. "Long range, we're planning to have about 3,000 stores in the US [up from 1,800 now]. The number could well go beyond that. Growth could reach 6,000 stores around the world [up from 4,000]."
IGA, a privately held franchise and marketing company, gives its member supermarkets bulk buying discounts, thanks to its 37 food-manufacturing and distribution member companies, but doesn't provide any financing for stores.
As the world's largest "voluntary" network of supermarkets, IGA posted nearly $21 billion in retail sales worldwide last year, more than $7.9 billion of that in the United States.
And at a time when some retail stores are planning urban-area cutbacks, IGA is planning to expand "in a number of inner-city areas," including the New York City borough of the Bronx and the Harlem section of Manhattan.
"Those areas are coming back,'' says Haggai. He declined to provide details of the kinds of assistance IGA would provide to help open up the new IGA stores in inner-city areas.
Currently, IGA has 56 supermarkets throughout New York State but only one in New York City.
"People know us well outside of New York City, especially on Long Island," Haggai says.
Before World War II, there were more than 300 IGA supermarkets in New York, but competition from big chain-owned stores and the urban decay of the 1960s virtually wiped them out of the Big Apple.
(c) Copyright 2001. The Christian Science Monitor