cc  >> Jeanan Yasiri: This is a  course that's offered from the  University of Wisconsin School  of Human Ecology.  I'm Jeanan Yasiri.  As we begin today, I'd like to  extend thanks to our partners in  supporting this course.  The UW Office of Corporate  Relations, the UW College of  Engineering for their technical  support, and financial support  from the Ewing Marion Kauffman  Foundation which is committed to  advancing academic education and  entrepreneurialism.  Additionally, we'd like to thank  our media partners, Wisconsin  Public Television, and their  University Place crew for taping  today's lecture.  I'm quite pleased to introduce  two guests today, both  representing Hy-Vee  Incorporated.  Pat Kaeding currently is serving  as the manager of perishables  here in the new Madison store.  Pat has worked for Hy-Vee for 17  years in a variety of positions  with the organization.  He graduated from the University  of Iowa in sociology, and before  college he served in the US  Marines for five years on  embassy duty.  Jan Nichols is the Retail  Recruiting Specialist for the  eastern region of Hy-Vee. 

 And she oversees 70 different  Hy-Vee stores.  She's worked for Hy-Vee for two  years, and her past position was  Manager of Store Operations in  Cedar Rapids, Iowa.  After college she worked for  Target Corporation in human  resources and recruiting before  taking her position with Hy-Vee.  And she, too, graduated from the  University of Iowa.  With sales of more than  $6.4 billion and more than 228  retail stores across Midwestern  states, Hy-Vee ranks among the  top 30 supermarket chains in the  nation.  It's an employee-owned company,  and they encourage each of their  56,000 employees to truly be  involved in the business.  So with that in mind, I've asked  Pat and Jan to come and talk  about that entrepreneurial  effort.  Please join me in welcoming Pat  and Jan.  (applause)  >> Jan Nichols: Awesome,  thank you.  How's everybody doing today?  Good. 

 Thanks for showing up.  I know it's really nice outside.  March Madness is going on so  thanks for bearing through this.  Pat and I are, basically, just  going to speak about the history  of Hy-Vee, kind of go into a  PowerPoint presentation, but  first we're going to show a  three-minute video that kind of  just highlights our company and  stuff that's going on in Iowa  where our headquarters is at.  (movie plays)  § §  All right, you guys, like your  professor said, I'm Jan Nichols,  I'm currently the Retail  Recruiting Specialist for  Hy-Vee, and I oversee the  recruiting efforts for eastern  side of our territory which  basically is overseeing the  recruiting efforts for 70 stores  and I have 36 colleges including  the University of Wisconsin.  So basically we're here today  just to talk about our  entrepreneurship within Hy-Vee.  So first and foremost we're  going to go over a little bit of  our history.  So start in the 1930s all the  way up to today.  I have an individual slide of  how we started and where we're  at.  Then we're going to talk about  our Hy-Vee fundamentals, the  five fundamentals that Hy-Vee  holds near and dear to their  hearts and the fundamentals that  we follow in our stores and in  our corporate office. 

 Along with employee ownership,  we'll talk a little bit about  our profit sharing program and  how we structure that in our  corporate office and also in our  stores.  And then, of course, we'll have  some time for some questions and  discussions and anything else  that you guys would like to  share with us today.  So we'll start off first with  the goal to provide good  merchandise, appreciative  service and low prices, Charles  Hyde and David Vredenburg opened  a small store in Beaconsfield,  Iowa, in 1930.  On January 1st of 1938,  the partners and 14 others  incorporated 15 Iowa and  Missouri stores as Hyde &  Vredenburg Inc, and then Dwight  Vredenburg, who was 23 years old  at the time, was elected the  first president.  So in addition to those stores,  the company operated a corporate  office, we operated a warehouse,  a mill and a meat plant which  were all located in Lamoni,  Iowa, which is a really small  town in Iowa.  And then also a bakery was  opened that year later.  And then by 1938 we had sales  totaling over $1 million.  So basically at the start of the  decade, we introduced a new type  of store that was opened in  Centerville, Iowa, and this  store offered customers the  newly invented shopping cart,  and then also self-service and a  frozen food case.  So in 1941, Hyde & Vredenburg  had sales of $2 million,  so growing.  And then that same year the  company made its first corporate  donation to the Boy Scouts of  Lamoni philanthropy practice  which has grown significantly  over the years, and then  basically giving back to the  communities is what we operate  on today as our principles. 

 Moving on to the 1950s and the  1960s.  In 1952 a contest was held to  rename the store.  So no longer the previous name.  Basically, it became Hy-Vee  because it was a contraction of  Hyde and Vredenburg, so we took  the two cofounder's names and  put them together.  And that was won by an  individual in our store,  and in 1952 she won $100  for basically....  the contest she won was $100.  Private label products using the  Hy-Vee name and Regal trading  stamps were introduced in 1956  and 1957.  And also in 1957, the first  in-store bakery opened.  At the end of 1959 we had 37  stores and approximately 12,000  employees.  And then in 1960 we established  the employee trust fund which  enabled all eligible employees  to share in the ownership of the  company. 

 And it was the beginning of the  company's long and proud  tradition of being known as an  employee-owned business.  In 1961, Hy-Vee began  advertising on television, and  that same year Hy-Vee introduced  its first computer system.  So moving on to the '70s and  '80s.  A number of milestones happened  in the 1970s.  We opened our 100th store in  Keokuk, Iowa, and then we also  entered into three new states.  South Dakota in 1975, Nebraska  in 1977, and then Illinois in  1979.  At the end of 1979 we had  approximately 124 stores, and  then also 10,000 employees.  So growing fast.  In 1982 was our first  billion-dollar sales year.  And then in 1983 we introduced  our 150th store which opened in  Lincoln, Nebraska. 

 By 1983 the company which had  been in business for 45 years  elected only its second  president, Ron Pearson.  And then the first company-wide  ad appeared in 1981, and then in  1984 Hy-Vee made national news  when it became the second store  in the nation to offer customers  use of debit cards.  So pretty cool for us.  At the end of 1989, we had 173  stores and approximately 23,000  employees.  Moving on to the '90s.  A little bit of our generation,  right, guys?  In 1990s Hy-Vee diversified its  operations through the  development of purchases of  several subsidiaries.  So we purchased Lomar  Distributing which became part  of Hy-Vee in 1990, and it  provides our specialty and  gourmet imported items.  In 1991 we introduced PDI which  supplied us dairy products and  ice cream to our stores.  In 1992 we introduced D&D Foods  which, basically, supplies us  our fresh salads and dips to our  Hy-Vee stores including meat  products such as Hy-Vee's  chicken grillers.  And then in 1992 we introduced  FDI which provides us with fresh  flowers, plants and decorative  items. 

 In 1995 we acquired Hy-Vee Weitz  Construction Which is the  general contractor for Hy-Vee,  it remodels all of our stores  and builds our new stores.  And then in 1996 we established  bakery manufacturing.  By the end of 1999 we had 208  stores and now 43,000 employees.  So today.  At the turn of the century,  Hy-Vee increased its focus on  customer healthy lifestyles.  Health market private label  products were introduced in  2001.  The company also began its  initiative to provide customers  with service of corporate and  in-store dieticians.  That same year Rick Jurgens was  elected the third president in  Hy-Vee's history.  And then at the end of 2009, we  currently had 228 stores,  opening our first store in  Madison, Wisconsin, in October.  In the Fiscal Year of 2009,  Hy-Vee had sales  exceeding $6.3 billion. 

 It is the second largest  employee-owned company in the  United States, and is ranked by  Forbes magazine as the 48th  largest employee-owned company  in the country.  We currently have over 56,000  employees working in our Hy-Vee  family, and then in December of  2009, we elected our fourth  president since starting in  1930.  >> Pat Kaeding: Okay, guys.  Thanks for having me here today.  This is quite an honor for me to  come and speak in front of you  guys.  Jan invited me to do this.  I work at this store here in  town.  I moved here back in August with  my family, specifically to come  and run and help run the new  store here.  So just to give you a little bit  of a history of our fundamentals  that Jan talked about a little  bit earlier.  Some of the very, very key  principles that we operate  under. 

 It seems pretty basic when you  look at that.  Our first one is that we always  try to be very, very helpful to  our customers and our peers.  All the people that operate  with, whether they're venders  that supply us, the customers  that come in and shop our stores  every day.  Everybody, just to be helpful.  To be friendly is very important  to our company.  It's very, very basic, very  simple to be friendly to  everybody.  Honesty, once again a very basic  principle that our founders  started back in the 1930s that  we carry on today.  To be respectful to each other.  Very important to us.  And also to be dedicated,  dedicated to your job, dedicated  to your community, but most of  all dedicated to your customers. 

 Some of the employee ownership  principles that we operate  under.  One of the big words that is  always important to a Hy-Vee  employee, and we feel that  differentiates us from other  companies, is our autonomy.  And that word kind of, you look  at it and you say what does that  really mean?  And it means very, very many  things to us.  But some of the things we pride  ourselves on is that we have the  autonomy to do things  differently in each market that  we operate in, whether it's here  in Madison,  Kansas City, Missouri,  the whole market there,  Omaha, all these different  specific places that we operate.  So we have the ability to make  decisions in our stores  according to what is going on in  that community or that market.  We don't have to have a lot of  input from other people telling  us how to operate at any given  time.  Our store operations,  we have a lot of autonomy there.  What does that mean, you might  be asking.  Anything and everything that  goes on in a store, we can make  decisions right then.  We feel that's different, it's a  different operating model that  helps us succeed. 

 Our people, our number one asset  is our people.  We feel that we try to hire the  best people, we try to recruit  the best people, we try to  employ the best people, and by  doing that we attract quality  customers that we serve.  Our customers, obviously,  without them we wouldn't have  jobs, we wouldn't have a reason  to get up and go to work.  So we do everything possible and  we're very, very passionate  about giving our customers  exactly what they want.  And our autonomy allows us to do  that.  I could give you countless  examples of customers that I  deal with on a day-to-day basis  that ask me all kinds of  different questions and I follow  up and I get back with them and  it could be a number of  different requests.  >> Nichols: A couple of  the stuff what he's  talking about, store operations,  we actually get to write  our own ads here in Madison,  and then we also get to write  our own ads at the  corporate office as well as  in stores.  So I have a couple of one-day  sales that went on at my  previous store that I got to  design along with our other  manager staff that was ran for  our 13-store area that I'll pass  around along with special  promotions we get to have in our  stores.  So coming up here, well, I guess  it was last night or tonight,  grilled sirloin steak dinner.  It started out in the central  part of Iowa where they'd have a  big giant steak dinner for $6. 

 You'd get a steak, a potato, a  vegetable, some bread, and now  it's become a company-wide  promotion.  So started in a store so the  autonomy with that.  As well as all the autonomy with  our Seasons magazines that we  put our quarterly.  Basically, it's just a magazine  for our customers, but we get to  get involved in designing in our  stores, recipes that our  dieticians get to use, just a  couple of things that we are  very autonomous in that fact.  So I'll pass around some of this  stuff to you guys so you can  kind of take a look and see what  type of autonomy we have as far  as our marketing campaigns, our  PR campaigns.  And a lot of this stuff starts  out in the stores and kind of  just goes from there.  So it's kind of fun to be a part  of a store and get to do one-day  sale promotions and all sorts of  fun stuff like that.  All right, moving on.  So again, briefly I talked in  our history about employee  ownership.  And we do have six companies  that help run our stores and our  corporate office. 

 So not only do we have our 228  stores, but we do currently have  two distribution centers that  distribute to all of our stores  in the Midwest, including FDI,  which I spoke about earlier,  which supplies us for our floral  shops.  And also our garden center is  coming up here in the summer and  springtime.  So flowers, plants and then any  florist supplies that we need.  We own that company and they  supply to us.  D&D Foods, like I spoke about,  where our fresh salads, dips,  meat specialties, cheeses,  anything like that that are in  the stores are supplied by one  of our vendors that we own.  Hy-Vee Weitz Construction built  a new store here in Madison, is  going to build a second store  here in Madison.  Remodels all of our stores,  builds our new stores, that type  of stuff.  As well as Lomar Distributing  which basically is like  specialty products like steak  sauces, cheeses, specialty  meats, anything that's out of  the ordinary, a lot of our  health market items, our Lomar  Distributing is one of those  manufacturers that supplies it  for us and that's also a company  we own.  We do have a bank, as well.  So not only for our employees  but also we put some  of these banks in our stores  in the Des Moines area. 

 So we offer banking and wealth  management.  And then we have PDI which is  basically our meats, our fish,  our seafood, ice cream, dairy,  that type of stuff.  Next up is our profit sharing,  and Pat will speak is little bit  about that.  >> Kaeding: Yeah, sure.  Profit sharing is always a very  important part of any company,  and one of the models that we  use that our founders  established when they opened up  and decided that they wanted to  operate grocery stores was  profit sharing with their  employees.  And it's very unique.  The 401K program that we offer  our employees, basically our  company will match 50% of 6% of  our wages.  So basically 3% is put into a  401K fund by the company.  And a portion of that is put  into Hy-Vee stock.  So a lot of people say,  how are you employee owned?  And the ownership part for me  comes in the form of the ability  to own Hy-Vee stock. 

 And we are a private company,  we're not publicly traded, so I  have a say-so in how we operate  our stores, which is very  unique.  Bonus checks we receive on a  quarterly basis if our store is  profitable.  We're a brand new store here in  Madison so, as you can imagine,  there's a lot of operating  expenses that go on when you  open a brand new facility.  They range in the millions of  millions of dollars.  We're trying to become  profitable.  So some day when we are  profitable and we're turning  profit, making money, we will  share a portion of that profit  to the employees that are making  that happen.  So that gives our employees  incentive to do a better job and  to serve our customers the best  way they can.  Those bonuses can range from any  portion of a percentage.  It just all depends on how much  money the store is making or not  making.  There's a couple of, if you ever  go into one of our stores,  there's two departments that are  kind of unique. 

 Our kitchen area and our  bakeries.  Those departments, those  managers of those departments  also have the ability to earn a  commission.  Our store directors that run the  stores have the unique ability  to earn a commission.  So there's a lot of incentive to  be able to come into a place  like Hy-Vee and make a pretty  good living, which is very, very  unique.  >> Nichools: One thing  that's kind of cool  is the corporate office also has  a bonus, and it's based off of  the 228 stores, the six other  companies we own, along with our  distribution center.  So the more profitable those  areas are, the more profitable  the corporate office bonus will  be.  I don't know any other retail  company out there that offers  the bonus structure that we  offer.  You can make anywhere between 1%  and I've seen all the way up to  28% of what you make in a 14 or  13 week quarter as a bonus  check.  So if you're making $1,000 a  week and you get a 10% bonus, 14  weeks, $1400 times four.  So that's just an extra amount  added on to your paycheck. 

 So it basically just gives the  incentive to not only our  managers but our full time  employees, our regular time  employees to kind of push to be  more profitable in our stores,  whether it's the cleanliness or  the customer service and  friendliness or offering  suggestions, helping us write  ads, anything that our employees  can do to make us profitable is  only going to make them  profitable.  And that's something that's  really unique, especially coming  from a different retailer out of  college, this incentive program,  this bonus program that we  offer.  And a majority of our stores are  on a bonus structure.  It's just the newer stores that  open up have a lot of debt, is  what we would call it, but it's  good debt because we're opening  up new stores for our customers.  All right.  Questions?  Discussions?  Go ahead.  >> I went to your store last  week.  I was pretty surprised that you  were open 24 hours a day.  You talk about how, I don't see  a lot of shoppers shopping at  2:00 or 3:00 in the morning, how  does Hy-Vee stay profitable open  24 hours a day?  >> Kaeding: Good question.  Sometimes with us it's not about  trying to stay profitable during  the night. 

 We know that there's not going  to be a lot of customers.  But it also doesn't benefit us  to close.  So we stay open.  Because there's a lot of  shoppers who work different  shifts so they can have the  ability to come and shop our  store, it doesn't matter what  time it is.  We want the customers to know  that they can come to our store  at any time.  Not all stores are open 24 hours  a day, but most of the stores in  the larger markets like ours  absolutely will be open 24 hours  a day except for Christmas.  We always close on Christmas.  >> Hi, my name is Melanie.  I just have a quick question.  So let's say one of your baggers  or people who check out, one of  your employees, they have an  issue. 

 What's the hierarchy of command?  How do they get their, like,  it's employee-owned so where do  they take that and how does it  get taken into consideration at  a higher level?  >> Nichols: That's a really good  question.  Every store has an HR, along  with, if they were a checker or  they were a courtesy clerk, they  have 12 assistant managers.  So hopefully one of those  managers they would be  comfortable with.  If not, we have an HR.  Otherwise, we have three levels  of upper management, and then  you have the store director.  Now if they're not comfortable  going to any of the people in  the store, we also have an  employee hotline that they can  call up at the corporate office  and everything is confidential  and that gets dispersed to our  HR supervisors and then the  supervisors can go and  investigate those employees'  concerns.  So there's always somebody out  there that can help those  individuals.  >> Yasiri: I'm going to ask  a question, Jan.  >> Nichols: Yeah.  >> Yasiri: You made reference a  couple of times to points in  history where you said  a president had been elected. 

 >> Nichols: Yes.  >> Yasiri: And I was wondering,  are you talking about the  president of a board of  directors or the president of  the corporation, and how does  that election take place?  Because that's unusual.  >> Nichols: Yep, it's the CEO  and president of our company,  and they are basically elected  through our stockholders which  are our employees.  So we have a vast range of  individuals that can be elected  into our stockholders, whether  they're store directors, whether  they're VPs of marketing, VPs of  human resources, those types of  individuals are elected into our  stockholders and then it's our  stockholders and other store  directors that elect our  president for our company.  >> Yasiri: And so that is a  really innovative concept.  >> Nichols: Yes.  >> Yasiri: Presumably, the  people that eventually rise to  those circumstances have either  been with the organization for  some time, how do we see those  elections actually take place?  How do they become known among  the 56,000 employees of an  organization?  >> Kaeding: Well, from my  understanding, our executive  committee, our board of  directors that's elected each  year is published throughout the  company at the very, very  beginning of the year.  So when that time comes when  maybe the president or CEO is  ready to retire then the board  of directors actually sit around  and they vote internally and  that's published when that vote  has been completed.  So it's a very easy system to  communicating it to all the  employees.  >> Yasiri: It is a very  different kind of model  of engaging employees  with the leadership of an  organization, without a doubt. 

 I'm going to continue to look  for hands from people who have  other questions, but I'll ask  one other one while we're  waiting for that.  You had mentioned too, Pat, the  concept of commission.  >> Kaeding: Yes.  >> Yasiri: In both bakery  and kitchen.  And that was a new concept  to me too.  I had shared with Pat earlier  that I worked my way through  college in a grocery store, and  we had never heard of the  concept of commission.  >> Kaeding: Yeah, it's great.  Our bakery manager here in  Madison, we've been open since  October and it's very rare that  you can have a brand new store  and have a young store and a  bakery manager who is very, very  motivated.  And he just took his bakery on  commission just this last  quarter.  Actually this last month. 

 So it's a different way of  motivating people.  Obviously, it's not always about  money or the commission, but I  don't think anybody would ever  say that doesn't help.  So the commission part of our  model is very unique.  >> Yasiri: I'm going to hand  the mic off  in just a second, but how do  they actually, when you say  commission, is it based on sales  that are generated by that unit?  >> Kaeding: It's sales  based on their department,  and what their  commission is is a portion of  their net profit that they make  every single month.  We inventory monthly in those  departments.  >> Hi, I'm Logan.  There's another employee-owned  grocery store that's very  popular here in Madison,  Woodman's.  >> Kaeding: Sure.  >> How does Hy-Vee expect to  compete with this store that's  been kind of ingrained in both  the college culture here as well  as the rest of the community?  >> Kaeding: I think that's  a great question.  I'm not really familiar too much  personally with Woodman's. 

 I don't know much about  Woodman's.  I have been to their stores and  I have seen them.  But we expect to compete just as  anybody would want to compete.  They're very, very known for  their low prices.  So are we.  We just feel that we can offer  our customers more.  And it's up to the customer to  decide.  We operate and we do the things  that we know how to do so that's  how we compete.  >> Hi, I'm Tina.  I have a couple questions. 

 We are primarily, obviously,  college students, and I was just  wondering what kind of  opportunities and programs you  had for hiring college students  out of college.  If you have both in-store but  also at the corporate level.  >> Kaeding: Can I just say  something real quick?  When I was in your shoes in  college sitting in the  classroom, I didn't have the  opportunity to have a recruiting  specialist.  This is a very new position in  our company.  So we've identified this need  and that's why she's here so  it's a great opportunity.  >> Nichols: Basically, we have  training programs.  So if you want to be an  assistant manager, a produce  manager, a bakery or kitchen  beyond commission or you want to  go any of that route, we have a  six to 12 month training  program, and we place you in a  store of your interest in an  area you want in live in.  And going from there, you're  evaluated 30, 60, 90, 120 days,  six months, 12 months into it by  our area vice president, which  oversees about 29 stores,  myself, the human resources  supervisor from corporate and  then the store directors and the  managers.  And you're evaluated to see if  you can move on to the next step  like a fulltime position.  But you're trained for six to 12  months in a store in an area. 

 So far off this campus, you guys  have been my best campus.  So congratulations to the  University of Wisconsin.  I've recruited five people so  far and I just started in  August.  So the talent's there.  The positions are definitely  there.  We're here to hire great,  talented individuals that are  graduating from college that are  going to take us into the next  step or phase of our company.  So right now it's brand new but  the people up at the corporate  office, the president and CEO,  Randy Edeker, is very supportive  of the college students coming  in and helping change our  company.  >> Kaeding: I think, as well,  Jan, the growth  of our company is there.  We're opening new stores every  single year.  We open about five new stores a  year. 

 Much like the store that we just  opened off of East Washington  Street.  So we a definitely growing.  And that's very, very positive.  That's a great thing.  Especially when you're a young  college graduate looking for a  good place to work.  >> Hi, I'm Brandon.  My question is what are some of  the complications that come with  being an employee-owned  corporation?  >> Nichols: Autonomy  can be your best friend  and it can also be your enemy.  I say that because I come from a  market in Cedar Rapids-Iowa City  area of Iowa and it's very  competitive among stores and  when it goes to write those  local ads and you have three  stores on board and you have 10  stores that aren't on board, do  you go the one-day sale  yourself?  It confuses the customer.  So like if you shop at a store  that's three miles away but this  store is only running that  promotion and they're not  running that promotion, it kind  of is sometimes not always  across the board.  So that can sometimes run  difficulties in the autonomy  aspect of it. 

 So I always say it's your best  friend and can also be your  enemy.  Pat can probably add more.  >> Kaeding: Well, I think  you said it pretty much.  If you're looking for what  challenges, there's always going  to be challenges with any  business model.  So what we try to do is really  focus on our strengths.  And of course we're going to  have hiccups along the way just  like anybody else but we really,  really try to stay focused on  what we do well and we feel that  that will probably be a good  thing in the big picture.  So I hope that answered your  question.  >> Hi, my name is Dan.  And I've worked at Pick 'n Save  and Sentry Foods for the last  couple of years only for, like,  just as a summer job.  I could not stand the meat  department at all, that's where  I was stationed. 

 But I noticed when I went  through the whole spiel of being  hired I read their mission  statement and everything like  that, and I just noticed that  your mission statement seems a  lot like theirs.  It's a very generic, sort of,  making lives easier, healthier,  happier, I was just wondering  have you guys ever considered  maybe changing that a little to  become more original?  Just something that will stick  out a little more?  Because when I looked at it I  just immediately thought I've  heard this from every other  store and it just...  >> Nichols: We actually  just changed it.  >> You actually just changed it?  >> Nichols: So it's been,  that's only been our slogan  for about a year now.  I say easier because it's easy  shopping, we're a one-stop shop.  You can get Chinese, you can get  kitchen-to-go meals, you can  pick up fresh bakery.  You have your meat departments.  I don't know any other stores  out there that have in-store  dieticians that can help offer  those types of services.  So if you're on a weight loss  plan, she or he can help you  with those.  They can help you pick out  vitamins. 

 We're one-stop shop.  We have a bank, we have a  customer service counter.  You can buy your Wisconsin gear  from there.  Healthier, we are going towards  a more healthier lifestyle  introducing health markets into  our stores.  So we basically take a Whole  Foods and throw it into a store  along with all of our other  departments and our grocery  departments.  The introduction of pharmacies  into our stores, dieticians,  dietician services.  We are, like, such a big company  that's gearing towards a  healthier focus.  And then happier.  Our number one priority is to  take care of the customers, I  know that's what a lot of  companies have as their slogan,  taking care of the customers,  but I truly feel that we really  do take care of the customers.  I know that when I worked in the  stores, I've gone out of my way  to drive a Seasons magazine 13  miles to a lady because she  didn't get it in the mail. 

 My boss taught me that if you  run out of ad product, because  it's an introduction into your  store, hot deals ads are very  good, you can't get it on the  truck that night, you drive to  Wal-Mart, you buy it and you put  it on your shelf.  >> Kaeding: I can tell you many  times in the last couple months  that we've been opened, you're  always going to get feedback  from our customers.  That's what we love most.  Whether we've done something  really, really good or we've  made some sort of mistake.  So in the past couple of months,  as people get to know us here in  this market, I've driven out to  probably 10 or 15 different  customers' homes and just taken  them the apples that maybe were  left behind or maybe there were  some eggs that got broken.  I get in my car and I take them  out to their house, I knock on  their door and I apologize and  say, we're sorry.  But as a gesture of goodwill,  thank you.  And I don't think that people  are used to that.  So that's one way we try to  differentiate ourselves from our  competition.  >> Hi, I'm Sarah. 

 You talk a lot about 401K and  bonuses and commissions in  reference to fulltime employees,  but I was wondering what the  benefit of the employee-owned  model is for the high school  student who works on weekends,  12 hours a week?  >> Kaeding: Well, if you're 18  years old you can participate  in our 401K program.  So as long as you're able to  participate in the program, you  get the benefit of that match.  That match gets put into Hy-Vee  stock.  So you are an owner.  >> Hi, my name is Susanne.  Personally, I really never knew  or was very familiar with what  Hy-Vee was until I checked out  the website this week.  It's a nice website.  But I was just kind of  wondering, since you're new to  the area, what type of marketing  campaign and PR campaign has the  company implemented for the  Madison area and what type of  evaluation plan has been  implemented to kind of ensure  that plan has been effective to  reach a population that doesn't  know what Hy-Vee is?  >> Nichols: I can tell you from  my perspective, our area vice  president and our higher-up  individuals at the corporate  office have supported the  University of Wisconsin teams  so we're a sponsor  of your guys' sports.  We're also a sponsor of the  Retail Excellence Center, along  with getting involved on campus.  This is probably my ninth  presentation on campus. 

 I come on campus a lot, do mock  interviews, resume critiquing  kind of just to get our name out  there, tell you a little bit  about our grocery stores.  And then we've put things in the  paper, we've done three-day ads  that go in the newspapers.  We have tried to go that route  to let our customers know that  we're out there for them.  >> Kaeding: I can tell you, too,  at the store level we probably  get anywhere from 15 to 20  different type of requests  asking for more kind of a  grassroots type sponsorship.  Maybe it's to a church.  Maybe it's to a Boy Scout group.  Maybe it's to a baseball team.  And we're very, very community  focused and we give back to our  community.  We give back to the churches, we  give back to these different  types of programs.  So that's one way that we try to  give back in the market and let  people know who we are and why  we're here. 

 Because without the local  support, we wouldn't even have  the reason to get up in the  morning or have a job.  >> How you guys doing?  My name is Dareon Cartman.  Just to comment about how you  plan on advertising to the  campus community.  I don't know if you guys know, a  lot of students, not just  students but a majority of the  Madison community are kind of  steering away from traditional  advertising.  Have you guys every thought  about doing a word-of-mouth  marketing approach  or an affiliate marketing  approach because there's  a lot of students  that love social networking.  >> Nichols: We're on Facebook.  >> Kaeding: We're on Facebook  and Twitter.  >> Nichols: I'm a real  big believer of Facebook.  We're on Twitter.  So that's what way to kind of  market towards you guys. 

 And word-of-mouth, being part of  the Retail Excellence Center  I've done a lot with the  Business Career Center.  We're new, we've only been  around since October, but we're  definitely working on it.  And then we have plans in place  to build a store out here in the  west in a year.  So I think that will bring a lot  of the college students maybe  over to that area as well.  I'm fully aware that a lot of  you guys don't have cars, but  we're on the bike path or you  take a bus out there or a lot of  you guys have mopeds, you can  ride those as well.  But great suggestions.  Definitely we'll take them into  play and continue to drive that  college student business as  well.  >> Yasiri: Pat, one of the  students just asked me  where your new store  is going to be in Madison.  Maybe you can describe that  location.  Are you familiar with it?  >> Kaeding: I am. 

 It's off of Whitney Way and I  believe it's the West Towne Mall  area.  >> Yasiri: Westgate. 	00:39:56:28	>> Kaeding: Westgate Mall.  There's that area right there  and it's directly across from, I  believe, there's a Copps there.  So in that area.  >> Yasiri: Corner of Whitney Way  and Odana,  and the Westgate Mall is really  probably the oldest mall  in Madison.  It's very, very old, maybe  almost 50 plus years old.  And it's really declined in the  years so this will certainly be  something that will refurbish  that area.  I know it only because that's my  neighborhood.  And we've been anticipating the  introduction of a new grocery  store for some time. 

 One of the questions I had had  to do, actually, with your  charitable giving.  On the video that you offered,  you really had quite a laundry  list of the organizations that  you do contribute to in  community and you had mentioned  that that's something you really  use as part of your outreach to  community.  Do the employees have a part in  helping determine how those  charitable gifts are made?  >> Nichols: I think our store  director probably does most.  He has the final say on how he  wants to do that.  We have a lot of requests from  employees.  So I suppose in a roundabout way  they kind of have some influence  there too.  But there's really no set, I  don't know, there's really not a  structure.  It just kind of is all  determined on our budgeting and  what we feel would be a really,  really good place to give back.  >> Yasiri: Okay.  That's helpful to know. 

 And, certainly, as Pat and Jan  had mentioned, Hy-Vee is a  sponsor of our University of  Wisconsin Center for Retailing  Excellence which is a very  important part of our School of  Human Ecology, and we thank you  for that.  Any final questions for Pat and  Jan?  Well, we all thank you very,  very much.  We actually got you some locally  produced chocolates from James J  to welcome you to Madison.  So please join me in welcoming  Pat and Jan and thanking them.  (applause)