Sedano’s Supermarkets has seen dynamic growth fueled by its transition from generation to generation. The chain was founded by Armando Guerra Sr., a Cuban banker and grocer, who came to the United States in 1961 and bought and managed a small grocery store called Sedano’s with Manuel Herran. Agustin Herran, Manuel’s son, is the current president and CEO, and Manuel is now chairman of the board of the chain that has 37 store locations in South and Central Florida.
Today, the founding generation has been succeeded by sons and nephews (seven) who are just beginning to greet the third generation, the grandsons and maybe one day the granddaughters. “We tell our kids the same thing we were told. Go get a good education and the business is there if you choose to go into it,” says Javier Herran, chief marketing officer and nephew of founder Manuel Herran.
Javier says all three generations operate with the same vision — growth and efficiency. What differs is their adaptation to the culture and modern technology. “The first generation were immigrants. They had no hobbies, and their mindset was all work. They wanted to build the business for the future for betterment of their kids.” The next generation took a different approach: “We brought more psychology into the business. We follow the same principles that the first generation did with the benefit of added technology to help us with daily work.” Now, although the third generation is mostly in grade school, two already are on the scene, pushing for change that the senior generation initially resisted: “They launched us into Facebook, got us hundreds of friends. They have a different idea of how we should market ourselves. We had always done lots of community service but had never publicized that — the younger generation has pushed on that front, too.”
Even as the company grows larger, the management style remains somewhat informal. Decisions are made by a quick phone call to get buy in, explains Jorge Guerra Jr., associate buyer and store supervisor and nephew of founder Armando Guerra . “We each have our areas of expertise and the others rely on the fact that we know what we are talking about.”
The business has grown large enough that at least a dozen family members of the original founding families have a role, and Sedano’s has a major a stake in Associated Grocers, a food supplier. “We definitely have a vision of growing [Sedano’s] more,” Jorge Guerra Jr. says. “We want slow growth the way the older generation showed us works.”
The older generation also impressed family unity on its successors. “Things may happen, and they do, but once we leave the office, it’s done,” Javier Herran says. “That might seem difficult if you haven’t grown up that way, but if you did, it’s second nature.”
Family business owner Raymond Kayal Jr. doesn’t have to worry about sibling rivalry or disagreements but he does have to concern himself with operating a much bigger company than his father or grandfather had built.
After working for a management consulting group and a law firm, Raymond returned to his family’s Miami airport retail business in 1998, becoming the third generation of his family to lead the company. Raymond actually formed a new entity called NewsLink, which acquired the older company’s infrastructure and hired most of the employees. He says his success has come from combining his grandfather and father’s strengths and building on them.
Raymond says his grandfather was charismatic and entrepreneurial and was an early concessionaire in the 1950s. His father, an ex-marine, came along and brought processes and discipline. Together they grew the company into six shops at the Miami airport. Under Raymond, NewsLink now has more than 30 locations at Miami and Orlando airports including restaurants, gift shops, sports stores, book stores and newsstands. In 2011, NewsLink opened The Shoppes of Ocean Drive, the first department store in an airport at the Miami International Airport.
“I’ve been able to combine that great foundation from previous generations with the latest and newest in branding and logistics — all the things the marketplace now demands,” he says. Raymond says he wouldn’t have been as successful had he not watched his grandfather and father in action. “I learned the power of ideas… to have a gut feeling about something and push it through to fruition, to just go for it. But I also learned how to combine that with discipline and systems. One without the other will not work. You don’t go three generations unless you have both of those things working equally well.”
Like Raymond, David Pardo is a third-generation family business owner who combines old-fashioned sales techniques and processes with a sophisticated inventory and an online presence. Having watched his grandfather in action, and then his mother, David feels he knows what gives his business, La Revoltosa, its edge over Walmart and other low-cost giants. “We give extra customer service. That’s what the old man did in the day and we continue with that tradition.”
David says in the third generation, owners must rely more on outside employees. “My grandpa was the man behind the register every day. He never took a day off and he was totally fine with that. I enjoy being in the stores, but I still want time to myself.” His grandfather, a Cuban immigrant, opened the first La Revoltosa on Flagler Street. Raymond’s mother, Milagros, still manages one of the two retail stores, but he has hired new talent. “I do that very cautiously.”
Just as other third-generation family business owners are doing, David Pardo says he must take risks to keep his business relevant. Beyond clothing, his stores now sell medical and school uniforms and ladies comfort shoes. He also has brought in some higher priced goods. Despite his mother’s initial reluctance, he says, “I’ve seen it work.”
Rivers of The Family Business Institute says third-generation family businesses walk a fine line: The bigger they get, the more that’s at stake: “There’s one commonality among family businesses that feud, they have something to fight over. The businesses are worth millions.”
Yet, when there is harmony, when the prior generations get past the “this is the way it’s always been done mentality,” the third generation has great opportunity, Rivers says. “They can make it a better, stronger business.”