Eric Watson, VP Diversity and Inclusion, Food Lion LLC
Diversity is a bottom-line issue for supermarket giant Food Lion LLC.

The company serves 10 million customers a week through approximately 13,000 stores operated directly or through affiliates in 11 southeastern and Mid-Atlantic states.

Recent Kenan Institute studies on the size and economic impact of Hispanic and African American populations in North Carolina caught the eye of Food Lion executives responsible for marketing to a diverse customer base and managing a diverse workforce.

Food Lion invited study co-author James H. Johnson Jr. to meet with top executives at its annual diversity summit and explore the topic in depth.

Kenan Institute News spoke with Eric Watson, Food Lion's vice president of diversity and inclusion, about the challenges and opportunities his company faces in managing diversity and how Kenan Institute expertise helps.

Kenan Institute: Food Lion has been recognized as a leader in diversity and inclusion. Why is diversity a business priority for Food Lion?

Eric Watson: As a retail business, we recognize the obvious diversity of our customers and our society. Diversity is important to us because of the opportunity to increase profit, improve productivity, and to be an unsurpassed community leader based on our relationship with and the support of the communities in which we serve.

We want to move beyond 'getting what you can get' and be a true merchant, a destination where people want to work and shop. Supporting diversity is one of the aspects of how you become a grocer of choice in a community that's diverse.

Kenan Institute: What are some examples of Food Lion diversity initiatives?

Eric Watson: Our business resource groups, made up of employees from diverse backgrounds, work to support the success of stores in particular communities.

I just left a two-hour meeting where we discussed how to serve a customer base in the Norfolk, Va., area that is largely African American. With the help of our African American business resource group, we are looking at how we merchandise the product, decorate the store, and support the schools and churches in the communities we're in.

Our Asian group has worked with our stores in looking at the selection of spices for foods. Our women's group looks at how we attract women as associates and develop women for leadership roles. Our Lesbian/Gay/Bisexual/Transgender group has gone out in the community to make sure our stores are open and representative of that community. We have supported the Parents, Families, & Friends of Lesbians and Gays organization, and I sit on their board.

Kenan Institute: How do Food Lion's diversity initiatives affect the company's bottom line?

Eric Watson: When you go to a mall to look for a pair of shoes or a dress or a shirt, you could go in and try on several things in a shop and buy nothing. But when people come to a grocery store, they've made a definitive decision that they are going to spend their money.

So it's up to us to provide them a place and an experience where they feel comfortable, where they feel embraced and engaged in that environment. If we do that, they will stay longer, hopefully spend more money, and they will come back.

So from a basic bottom-line perspective, regardless of how a person looks, how they dress or act, or what their life experience or background has been, we need to create an environment that says we're open to them shopping at our stores.

That means that we also have to engage with our associates and create an inclusive environment for them. People go to places where they see people like them, or people who value the things that they do. So we need to reflect the communities that we serve through our associate base and create an environment that's reflective of the market.

Kenan Institute: How does the diversity summit that Food Lion hosts fit in with the company's other diversity initiatives?

Eric Watson: We host an annual summit in which top leaders in the organization focus on their leadership and the business case for diversity in an empirical way, as we did when Dr. Johnson spoke to us about the economic impact of African Americans and Latinos.

We have top leaders in the room talking about how diversity really impacts the success of our business.

It's a given that companies come together to talk about finances or about how to improve their business plan. We feel it's important to come together and talk about people - how to include people and reflect the diversity of our customers and associates.

Kenan Institute: Why were you interested in having Dr. Johnson speak to Food Lion's diversity summit?

Eric Watson: His research helps to make a profound business case for diversity and inclusion in growing your business. His study was specifically reflective of a large constituency of ours that we both have had success with and would like to continue to grow - the African American and Latino markets.

We want to make sure we maintain the customers we have, and we want to look at revenue potential based on demographics. Understanding the economic impact of those communities in more detail puts us in a special position to make choices we would not otherwise make.

We need to know where people are, what their current needs are, and have the opportunity to make decisions around the customers we have today and the customers we can attract in the future.

In addition we are getting ready to move into looking at the Hispanic market in a more specific way — how to better serve them with merchandise and really do the kinds of things that are necessary to truly capture that market. We've got data now to help us make informed decisions.

Entrepreneurship • Economic Development • Global Competitiveness

Frank Hawkins Kenan Institute of Private Enterprise
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