Tractor Supply Co. CEO shares how to keep a classic brand recession-proof
Tractor Supply Co. CEO Jim Wright, whose humble yet steadfast business strategy helped Tractor Supply Co. grow sales from $750 million in 2000 to $4.6 billion in 2012, has garnered quite a bit of attention over the past few years. Ahead of his appearance with other retail CEOs at the NRF Foundation's Student Program at Retail's BIG Show, I asked Wright to share how the 75 year-old company reinvented itself to stay successful during difficult economic times, the biggest challenge when it comes to recruiting the future leaders of the retail industry, and his fondest memory from when he got his start in retail.
Tractor Supply Co. grew from a mail order catalog business in 1938 to one of the largest retail farm and ranch store chains in the United States – and has a reputable online operation to boot. What’s the biggest takeaway the company has learned from their retail evolution over the past few decades?
The consumer and the competition are always moving and evolving. In the mid-1990s, Tractor Supply failed to meet consumers’ expectations for product selection and newness. The company also fell short on several shopping experience measures. As these issues were fixed the consumer responded and sales grew. The big learning for the company since this turnaround is that the speed of change in retail continues to accelerate. We have several beliefs and practices that keep us grounded. When testing new products or initiatives, we embrace the idea of failing often, early and cheaply which mitigates the risk without stifling creativity. We expect everyone to be relentlessly dissatisfied and to challenge the paradigm.
What’s the next retail evolution for your company?
We are currently evolving from a marginal e-commerce platform to a robust multichannel presence and eventually we expect to have a comprehensive omnichannel offering.
ABC News recently chronicled the recession-proof tactics of Tractor Supply Co. What are some of the ‘special ingredients’ that helped your company stay successful during these less-than-ideal economic times?
We called the recession during the first quarter of 2008, developed a comprehensive plan and held a series of intra-company meetings. By March of 2008, everyone from our store managers up was aligned with our key convictions:
- We would not allow the recession to impact the creation of shareholder value.
- We would save money where it would not impact our customers or our front line Team Members.
- We would help our customers save money on key consumable, usable and edible products.
Finally, my pledge to the entire team was that if they were with us at the beginning of the recession, contributing and continued to contribute they would have a job at the end of the recession or I would have failed in my job. As a result they felt secure and contributed their best work and ideas. During 2008 and 2009, we opened 169 stores, added 1,600 new team members, increased earnings and our stock out-performed 94 percent of all NASDAQ traded companies.
Tell us a little bit about your company culture. What are the dynamics that make Tractor Supply Co. a great place to work?
We are a Mission and Values based company and have deep and broad alignment to them. We have a practice of hiring hard, which means we take the time and focus needed in the hiring process to allow us the time to assess for fit and skill and then we are able to manage easy. We spend extraordinary time and effort on-boarding new team members. We strive to bring dignity to all jobs and to celebrate individual and team successes. We practice servant leadership and believe that management, starting with myself, is burdened by responsibility, not privileged by position.
What would you say is the biggest challenge facing retailers when it comes to recruiting and retaining young talent?
The retail industry today is at the leading edge of IT, big data, CRM, logistics and business transactions on a global basis. The challenge for the industry is to get the word out to young professionals. The retail industry also offers a fast track to profit and loss responsibility for young talent with an interest in running a business unit. This is not your father’s retail industry, the pace of change is exciting, the opportunities for advancement are plentiful and diverse and the pay is very competitive.
You’ll be on stage in New York this year during the student program at Retail’s BIG Show to share a glimpse of your retail career story and the biggest lessons learned along the way. What’s your fondest memory of being mentored when you were first starting out in retail?
As an engineering student, I held a part-time retail job. During my first ever performance review, the store manager told me I would become a good engineer but he felt I could become a great retailer. He took the time to explain why he felt I had a talent for retailing. He was wrong. I would have been a terrible engineer. The lesson I learned and apply when mentoring young talent is to take a genuine interest in their goals and potential. Over the years I have witnessed hundreds of young men and women achieve success beyond their dreams in retail and I frequently share their stories when speaking to early career retailers. The retail industry is a meritocracy in that there typically exists a direct correlation between performance and eventual pay and promotion.