Minnesota Grocer Joe Lueken Turning His Stores Over To Employees

Retireing grocer Joe Lueken of Bemidji, Minn.

Joe Lueken may go down as one of the nation's best bosses -- or at least one of the most generous. That's because the Minnesota grocer isn't merely giving employees a Christmas bonus this year, he's giving them the business, sort of.

After 46 years, the 70-year-old owner of Lueken's Village Foods in Bemidji, Minn., wants to travel the world with his wife, Janice, and spend more time with his four sons, none of whom lives nearby. So on Jan. 1, Lueken will begin the gradual process of turning over operation of his two supermarkets -- the other is in Wahpeton, N.D. -- to his 400 employees through an employee stock ownership program, or ESOP.

"My employees are largely responsible for any success I've had, and they deserve to get some of the benefits of that," Lueken told the StarTribune of Minneapolis earlier this month. "You can't always take. You also have to give back."

Lueken has had offers from larger, independent chains and likely would've made more money selling the business to one of them, he said. However, the grocer thinks that giving employees the opportunity to run the business for themselves will be better not just for the workers but for the business, and for Bemidji, a city of 13,000 located about 200 miles northwest of Minneapolis.

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Employees of the business are naturally pleased with Lueken's decision. "He's rockin' awesome," said front-end manager Maria Svare, who's worked for Lueken since 2009.

Lueken's action shows that he puts people first, Svare said, adding that employees will be more engaged in their work since they'll now be responsible for running a profitable enterprise. "It gives you something to call your own and gives you a more comfortable retirement to look forward to," she said.

As The Bemidji Pioneer reports, Lueken got his start in the food business at age 7, when he went to work at his father's bakery for 26 cents a week. In 1966, he became manager at the first Lueken's grocery store, which his brother opened in downtown Bemidji. Lueken eventually bought out his brother and opened a larger store on the north side. The Wahpeton store opened in 2000.

Though setting up the ESOP for his workers may seem an extraordinary gesture, reports suggest that it fits with the grocer's generosity toward local charities. In the 1990s, his donation to the Bemidji State University Foundation aided needy students by providing full scholarships.

An early recipient of that largess, Jeremy Fogelson, went on to become a neurosurgeon, and repaid Lueken in 2007 by assisting in an operation that Lueken underwent to relieve tremors caused by Parkinson's disease. The operation at the Mayo Clinic, which involved implanting electrodes in Lueken's brain, reduced the severity of his tremors.

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Lueken's decision to sell the business to his employees was the result of discussions that the grocer had with his four sons, all of whom live either on the East or West coasts and aren't interested in the business.

The ESOP will help keep profits from the business in the community, through salaries and causes important to workers, rather than some absentee corporation, said one of the sons, Jeff Lueken, an information-technology expert who lives in California.

The StarTribune reports that the program will pay off the Lueken family in three to five years and leave employees with shares based on length of service and salary, at no cost to them. If the company keeps growing, the shares' value will rise, too.

"The whole move revolves around people, not things or money," Jeff Lueken told the newspaper. "It's about allowing people to grow with the business and send their kids to college and have a great retirement, and even to express themselves at work."

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