The enlightened retailer
Grupo Pão de Açúcar is on a mission to create a great shopping experience for its customers in Brazil and beyond. They are clearly doing something right. Since its establishment in the 1940s as the Pão de Açúcar pastry shop, the Group has grown to become Brazil’s largest retailer, with over 1,800 supermarkets, hypermarkets, electronics stores, gas stations and drugstores.
So far so successful. But what’s interesting about Pão de Açúcar is that this success is underpinned by a set of values that could best be described as exotic in the world of business. Not many companies count humility, emotional balance, determination and grit in their list of corporate values. These are oddly human characteristics for such a large corporation, particularly when so many of the Group’s peers rely on an identikit set of values and behaviours.
Vitor Fagá, Pão de Açúcar’s Executive Director of Corporate Relations, told us about the lengths that the Group is prepared to go to in its mission to create a great experience for its customers: “We have a special department called “Casa do Cliente” (Customer’s House). This department is physically separate from the company and is literally in a house. This department is in charge of making sure that the customer is satisfied. If not, Casa do Cliente will do everything possible to revert the situation or bring satisfaction to the customer. If customers have any complaints about the store, the products or services, the Casa do Cliente department will sort it out. We empower the department to allow them flexibility, influence and the ability to adjust processes at a store level to affect the customer in a positive way.”
The customer is clearly an audience that Pão de Açúcar takes seriously. However, it would be wrong to think that the Group is willing to sacrifice the happiness and self-respect of its employees in a bid to please customers. Pão de Açúcar is better described as a people-focused organisation than a customer-focused business. Vitor Fagá explained to us that this focus on people is at the heart of the Group’s success: “We care in several dimensions: customers, employees, businesses and communities around our stores. We have been pushing the frontier of a pure retail supermarket or food retail chain to a more complex, dynamic and responsible company. We are a service company and one of the largest private employers in Brazil. So we take special care of people. This is key to our business. This is probably the key differentiator: to support our employees, not only in their daily work but also their family, health and any other dimensions. This is one of our key goals as a company.”
When it comes to taking care of its employees, the Group is certainly prepared to put its money where its mouth is. Employees are offered a range of financial incentives to help improve their lives, from healthcare and dental plans to subsidised meals and discounts on hotels, theme parks and cultural events. The Group also contributes 50% of tuition fees for every employee undergoing college education and offers scholarships to workers with physically or mentally impaired children. But Pão de Açúcar’s employees aren’t just supported, they are encouraged, recognised and rewarded for their contribution:
“Recognition goes beyond the financial. For example, we have a meeting every Monday morning with more than 200 company managers. In that meeting we introduce 3 or 4 people that deserve to be recognised by the company. We share their stories. And they are recognised in front of the 200 managers of the company. This is a small example; we keep them motivated not only in financial terms. That would be easy but we move ahead and do it in a different way, we get them engaged and satisfied. When these employees go back to their store and tell other people, this keeps their team engaged and motivated.”
This multiplier effect isn’t restricted to Pão de Açúcar’s role as an employer; the Group’s scale means that it has an ability to positively influence the entire value chain in which it operates. Small suppliers aren’t squashed like bugs. Quite the contrary. Pão de Açúcar established “Caras do Brasil” (Brazilian ‘Face’) a fair trade program that opens up its outlets to the trading of local products, with the aim of safeguarding biodiversity and local culture in the regions in which it operates.
“Caras do Brasil is a programme developed with small suppliers that usually create non-manufactured items such as, pots of honey, candy or towels. They typically don’t have access to retail chains. We give them this access. We support them in many ways, for example through advertising or by certifying their products. In some cases we support them financially. We created this programme 10 years ago and we have 160 products associated with it.”
Beyond its own value chain, the Group embraces its ability to improve the long-term quality of life for Brazilian society at large. “Sustainability for us is not a marketing action or topic, it is much more than that. Sustainability is the only way to do business right now and in the future. This cannot only be at an environmental level but also has to be at a social and economic level. For example, we support a specific institution (NATA) to provide training and education to communities. To train people to a professional level. We develop and educate people to be bakers, fishmongers and butchers. Usually we employ them in our stores, but if they want to open their own place they can. At the beginning we try to involve them in our stores, because it is the best way to gain experience.”
Despite the variety and scale of its activities in supporting Brazilian society, environment and economy, Vitor Fagá is extremely clear throughout our conversation that Pão de Açúcar is acting purely in its own interests. It’s just that Pão de Açúcar’s sense of self-interest happens to be far more enlightened than the average retailer. The Group plays many roles: maintaining human rights; contributing positively to society; promoting community wellbeing; safeguarding the environment; and working with partners and suppliers to meet the needs of its customers. All of these roles relate in some way to the company’s DNA — the importance it places on people and its belief that long-term success relies on investing in their education, supporting their wellbeing and rewarding their achievements.
“Prosperity is definitely part of our mission, but we don’t believe you can create prosperity alone. If you are not engaged with your employees, customers and society you will not be able to create prosperity in a sustainable and consistent way.”