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ROTTERDAM
Family philosophy pays off at Price Chopper
Chain celebrating its 75th birthday
BY MICHAEL LAMENDOLA Gazette Reporter

   Neil Golub once described himself as a “simple grocer.”
   But Golub is anything but a simple grocer, just as the mammoth company he heads is anything but a simple grocery store.
   Golub is president and CEO of Golub Corp., parent of Price Chopper, headquartered in Rotterdam.
   Golub Corp. is a leader in the highly competitive retail supermarket industry, said analyst Neil Stern, senior partner with the Chicago-based McMillian and Doolittle.
   The corporation generated $3 billion in revenues in 2005, an 11.1 percent increase from the prior year, according to Forbes.com. It employs 24,500 people in 116 grocery stores in Vermont, New York, Massachusetts, Connecticut, Pennsylvania and New Hampshire.
   In the Albany-Schenectady-Troy area, Golub controls nearly half of the market, with the remainder going to Hannaford, Wal-Mart and several smaller outlets. This market accounts for at least one-third of Price Chopper’s store base.
   As it prepares to celebrate its 75th anniversary Nov. 17, Golub Corp. is fine-tuning its master plan for growth in decades to come, said Mona Golub, 43, vice president of public relations and consumer services.
   “Our vision is multi faceted. We expect to grow this company. We are opening a half-dozen stores a year; we need to keep going,” Golub said.
ALL IN THE FAMILY
   Mona Golub is the fourth generation of the Golub family to run the company. Golub Corp. remains one of the few family-run, American-owned grocery businesses in the United States.
   Her two cousins, who are a few years apart from her in age, are also involved in key executive positions. Jerry Golub is senior vice president of sales and merchandising, and David Golub is vice president of store operations.
   “The three of us have grown up with a passion for this industry as well as for the company,” she said. All three worked their way up through the ranks, learning the business from the ground floor.
   In all, six Golubs serve in key positions: Neil is president and CEO; his wife, Jane, is director of vendor programs; and cousin Lewis is chairman of the board.
   The company has a board of directors who meet quarterly. It is privately held and is not obligated to report its earnings publicly. The Golub family owns 45 percent of the company, while employees, called associates, own 55 percent.
   “We are in the top five familyowned companies that share 50 percent or more of the company,” Mona Golub said.
LASTING SUCCESS
   Stern said Golub Corp. is considered one of the top regional supermarket chains in the country.
   “Price Chopper is admired in the industry. Those guys have not only withstood the national chains, but they have performed better than the national chains,” he said.
   He called the situation an anomaly.
   “In almost every retailing category, over time, national chains have emerged and wiped out locals and regionals,” Stern said. “But in the supermarket business, when most people think about who are the best operators, everyone talks about good regional players, and Price Chopper is on that list.”
   Golub’s success, Stern said, can be attributed to its local and regional focuses in running food stores and to knowing what the customer wants.
   “The consumers’ eating preferences are much different than their preferences for buying a TV,” he said.
   Golub Corp. has maintained momentum for 75 years because “it is a good nuts-and-bolts operator,” Stern said. “They run good stores. In retail, it is making sure to the little details: keeping stores clean, customer service. It’s part of the
culture you build.”
   Mona Golub said knowing your customer is important: “The success of a business is based on its ability to fill a need, to serve people, to take care of the community. Our decisions are focused on accomplishing those ends.”
   She said the company pays close attention to its customers through in-store surveys, e-mails and more. “We have a team that spends their entire time reaching out to consumers to make sure they know we received and heard their message,” she said.
   Golub said the corporation prides itself on its culture of “human philosophy.” The philosophy focuses on developing people, on promoting human values, on making sure that “what goes around comes around,” she said. “It is a philosophy that if you help someone up the mountain, you end up closer to the top yourself.”
   Throughout most of its history, Golub Corp. has invested heavily in the community, practicing its philosophy beyond its stores. The Golub family has donated millions to local organizations, including Ellis Hospital and Proctors. Family members serve or have served on volunteer community boards and agencies or on elected boards. As part of their 75th anniversary, for instance, Golub will donate $225,000 to local, regional and national organizations that are fi ghting breast cancer.
   These activities are not just recent occurrences, either. Mona Golub tells a story about two relatives to illustrate the family’s and company’s ingrained values. When Lewis Golub, now chairman of the board, cleaned out his father’s desk, he found a receipt for a truckload of evaporated milk sent to Argentina in 1937 to help earthquake victims.
   To Mona Golub, such stories are inspiring: “It’s a thrill to have the opportunity to contribute meaningfully to this company’s rich history.”
ON THE CUTTING EDGE
   Over the decades, Golub Corp. pioneered several innovations that helped it carve a niche in the market. The first was the opening of one of the first self-service, onestop shopping supermarkets, a precursor of the modern supermarkets. Brothers Bill and Ben Golub, sons of founder Lewis Golub, did this Nov. 17, 1932, when they opened their first store in Green Island.
   A year later, they opened two more stores, one of them on Eastern Parkway. They called this store Central Market, as it was five minutes away from Central Park. The name stuck for the growing chain.
   Other innovations followed. The corporation became the fi rst grocery chain in the country to issue S&H Green Stamps, fueling a collection craze that made S&H Green Stamps a household name. It pioneered the use of swipe cards to replace coupons; it led the way in using the Internet, putting up a Web site, and it became the fi rst chain to remain open 24 hours a day (all but 20 of the chain’s 116 stores are open 24 hours a day). In later years, it introduced electronic check cashing and credit or debit payment at the checkout.
   In March, the company introduced a line of all-natural products in its stores, including items free of antibiotics, pesticides and hormones. Mona Golub said sales of natural milk have been signifi - cant.
   On Friday, the company testmarketed its newest innovation: the delivery of food from its takeout menu. It is using the Brunswick store for the test, Golub said.
   “We believe we make a great pizza, and to compete in the market place, we need to explore home delivery,” she said.
RISKS AND REWARDS
   Innovations are often the hallmark of privately-held companies, Stern said.
   “They are willing to take risks and have the ability to try things that might not work,” he said.
   Unlike publicly traded companies, a privately held company does not have to report earnings each quarter to stockholders and can weather a bad quarter or two, he said.
   These innovations help trim costs in a business that measures profits in pennies, Stern said.
   “The industry has the tightest profit margin fields in business, usually 1 percent to 1.5 percent,” he said. This translates into less than 2 cents of profit on each dollar of sales.
   Grocery stores survive by selling large quantities of items, according to the nonprofit Food Marketing Institute. Low markup helps stimulate high volume, thereby generating profits.
   In 2006, the retail food industry reported $499 billion in sales and a net profit after taxes of 1.46 percent, according to the Food Marketing Institute.
   The fact that Price Chopper’s 24,000 employees are non-unionized also helps keep costs low, Stern said. Food retailing remains one of the most labor-intensive industries in the nation, according to the Food Marketing Institute.
   “The better companies tend to be non-unionized,” Stern said. “The point is, margins are thin, with most operating costs going for labor and occupancy and to a lot of little details. Shrinking costs — utility costs, labor costs — and the ability to closely manage the business becomes critical.”
   The United Food & Commercial Workers International Union tried to organize Price Chopper workers at least once in 1991, without success.
   Stern said Golub’s policy of profi t sharing may play a factor in keeping the union at bay.
   “That is good motivation. If you know you are sharing in the rewards, it is easier to motivate people,” he said.
   Indeed, Mona Golub reported that the company’s stock grew 34 percent this year. She would not divulge the number or value of the shares. The company enlists outside professionals to value its stock each year, using accomplishments and plans to move forward as benchmarks, she said.
   “The future is bright for this company,” Golub said

MARC SCHULTZ/GAZETTE PHOTOGRAPHER
Assistant manager of the floral shop Maria Savoie arranges bouquets at the Rotterdam Price Chopper. The grocery store chain is celebrating its 75th anniversary.

MARC SCHULTZ/GAZETTE PHOTOGRAPHER Todd Johnson and his son Mason do a little shopping at the store in Rotterdam.

An old photo shows an early Golub-owned market. The date is unknown.

COURTESY OF GOLUB CORP. Lewis Golub, founder of the Golub grocery store business

COURTESY OF GOLUB CORP. MARC SCHULTZ/GAZETTE PHOTOGRAPHER
Mona Golub talks with Schenectady resident Jerry Ducie on Friday afternoon. The family-run Golub Corp. owns the Price Chopper supermarkets.

Quoted Text

“Price Chopper is admired in the industry. Those guys have not only withstood the national chains, but they have performed better than the national chains,”