Warren Buffett once noted, "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently."
Amazon.com (NASDAQ:AMZN) has done things differently, and over the years has built a reputation for stellar quality and integrity. Analysts might quibble over the investment merits of its stock (though the e-commerce leader usually proves them wrong), but no one questions the merits of its business.
Scoring high marks
Which is why over the past decade Amazon has more often than not ranked highly in the public opinion survey conducted by the Harris Poll of the reputations of the world's most visible companies.
Based on the public's views of a company in six broad categories, the e-commerce giant has had a Reputation Quotient score of 80 or better (meaning "excellent") in six of the last 10 surveys. In 2013 and 2014 it ranked as the most reputable company on the list, as viewed by 27,000 respondents through the lens of:
- Social responsibility
- Emotional appeal
- Products and services
- Vision and leadership
- Financial performance
- Workplace environment
That likely explains why its financial performance continues to outstrip expectations even while Amazon enjoys 30% annual revenue growth while recording a near-36% increase in November along and a 22% increase in December, according to the market watchers at ChannelAdvisors.
Taken down a peg
But for 2015, Amazon dropped to second place with an RQ score of 83.72 (down a negligible 0.11 from last year), displaced by a company with just one-tenth the revenue of the Internet retailer.
The usurper realized the achievement by having visionary leadership, employee alignment, and an exceptional customer experience, all the things Amazon itself is credited with possessing.
Cleanup in Aisle 3
Who is this upstart? The family owned regional grocery store chain Wegmans Food Markets, which was the only company to score highly in each of the six categories in the survey and was ranked tops in four of the six (it came in second in the other two behind Amazon). Its Reputation Quotient was 84.36.
Rounding out the list of the top five most reputable companies were, in order, Samsung (NASDAQOTH:SSNLF), Costco (NASDAQ:COST), and Johnson & Johnson (NYSE:JNJ), all multibillion corporations, which makes the 85-store grocery store chain's achievement all that more remarkable.
Perhaps we should have known. Wegmans was also recently rated as the only retailer besides Costco as one (per Glassdoor) of the 50 best places to work.
Taking on some serious competitors
Operating in the mid-Atlantic and New England states of New York, Pennsylvania, New Jersey, Maryland, Massachusetts, and Virginia, this was Wegmans first appearance in the survey, which was expanded from 60 companies in previous years to 100 in 2015.
Significantly, Wegmans outpolled the other grocery stores making the list, including Whole Foods Market (NASDAQ:WFM), (No. 21), Kroger (NYSE:KR) (No. 32), ALDI (No. 44), and both Target (NYSE:TGT) (No. 63) and Wal-Mart (NYSE:WMT) (No. 84).
Wegmans Food Markets is a big operation. Founded in 1916, the supermarket has grown to become one of the largest private companies in the U.S., with a history of firsts: In 1990, it became one of the first supermarkets to introduce electronic discounts, and in 1974 it was among the earliest to introduce bar-code scanning.
Wegmans generated $7.4 billion in revenue in 2014, employs 44,000 people, and its stores are 80,000 to 140,000 square feet in size -- more than double the size of the average Whole Foods supermarket and on par with a Wal-Mart Supercenter.
Not your typical supermarket
The grocery store chain bills itself as something more akin to a European open-air market and stocks a bedazzling 70,000 products, which the Food Marketing Institute says is almost twice the 40,000 items found in a typical supermarket. It has translated that into the highest average daily sales volumes in the industry.
Wegmans Food Markets has the benefit of a brilliant management team, a business with good economics, and a sterling reputation in the communities its serves that bode well as place to shop and work at in the future.