Watching Their Next Moves
Look for these executives to be making waves in the industry this year.
With the pace of mergers and acquisitions ramping up again, key grocery industry players will be put to the test as they navigate this changing landscape while still coping with the usual changing marketplace dynamics.
The following are just a few of the top dogs that Progressive Grocer will be keeping an eye on as 2014 unfolds — those that our staff members and industry observers we queried believe will be of keen interest in the coming year.
Shelley Broader
President and CEO Walmart Canada
Described by one north-of-the-border business publication as an “every-mom” who’s Walmart Canada’s “secret weapon,” Broader began her career in investment banking, but, while still in her 20s, switched to retail by joining Hannaford, eventually becoming president of its Florida-based Sweetbay sister banner.
With Target spending most of 2013 expanding its store base across the dominion, Broader has her work cut out; she’s been the driving force behind pushing fresh food into as many Canadian Walmart stores as possible. With a resume that also includes positions with Michaels and Sam’s Club, she’s no doubt up to the task. A key question many wonder about is whether Broader will choose to continue moving through the Walmart executive structure or opt for new opportunities in traditional grocery, since, as she’s noted, “Food is very close to my heart.”
Sam Duncan
CEO Supervalu Inc.
Last fall brought some spring-like hope to the folks at Supervalu HQ when the Minneapolis-based grocer saw an increase in net sales (0.2 percent) after more than three straight years of declining quarterly sales. It was that performance that led to the ouster of former chief exec Craig Herkert and the eventual installation of Sam Duncan, who now leads a leaner, meaner and more focused Supervalu.
Since Duncan became CEO last February, Supervalu has completed the sale of five regional banners encompassing nearly 900 stores, creating a slimmer company consisting of three operating divisions: the Save-A-Lot chain of 1,300 hard-discount supermarkets; corporate retail food banners Cub, Farm Fresh, Shoppers, Shop ’n Save and Hornbacher’s; and the company’s historic core, a wholesale business serving 1,950 independent grocers nationwide.
The road to recovery hasn’t been without bumps, however; for example, instability in leadership at the regional banners, namely Farm Fresh in the Southeast. But improvements in same-store sales are certainly a positive signpost. “We remain focused on delivering steady improvements in our business each and every quarter,” Duncan said in October. “I am encouraged with our results this quarter and, more importantly, the way we are achieving these results by building a strong foundation that is focused on our customers.”
Duncan came to Supervalu from OfficeMax, but his roots in grocery run deep; he began his career at Albertsons as a courtesy clerk at age 15 and worked his way up the ladder before moving to Kroger’s Fred Meyer division; later he was president of Ralphs in Southern California.
We’ll be eager to see how Supervalu’s turnaround continues on Duncan’s watch, and encourage him not to lose focus on customers in the country’s vibrant community of independent grocers.
Robert Edwards
CEO Safeway Inc.
Safeway enters the new year somewhat discomfited, having withdrawn from the Chicago market with the closure of its Dominick’s chain, as well as from Canada through the sale of its operations there to Sobeys Inc. The moves came amid threats of buyout by New York-based Jana Partners, which took out an activist stake in the grocer; Cerberus Capital Management, the folks behind Albertson’s, new or otherwise, also reportedly explored buying some or all of Safeway, which isn’t up for sale.
But apparently, these moves by Edwards — who took the helm last May upon Steve Burd’s retirement — and his team in Pleasanton, Calif., were enough to satisfy Jana, which responded by reducing its Safeway holdings.
On the one hand, the inability to make a go of Dominick’s after 15 years leaves Safeway justifiably red-faced. But the U.S. and Canadian slim-down efforts present an opportunity for the company to strengthen its focus elsewhere and shore up performance, which in Q3 included dips in sales and earnings, with losses approaching $14 million.
Edwards, who joined Safeway as EVP and CFO in 2004 after stints with Maxtor, Imation and Santa Fe Pacific, has the confidence of Burd, who notes that his successor “has successfully met every challenge he has faced, … has demonstrated the ability to lead the company in all facets of its operations, and has earned the respect of the entire organization.” In April 2012, Edwards was named president, with overall responsibility for the company’s retail operations, marketing, merchandising, corporate brands, manufacturing, distribution and finance functions; he also continued as CFO until February 2013.
So eyes will be on Edwards to see how he continues to shore up a smaller Safeway amid a sea of new mergers and acquisitions, as well as competitors sporting rosier balance sheets. Meanwhile, the company had a divisional shakeup just as we went to press, with three execs leaving the Eastern division and the outgoing chief of Dominick’s appointed to run the Maryland-based operations.
Robert Mariano
President, CEO and Chairman Roundy’s Inc.
Will 2014 be the year that Chairman Bob takes back Chicago?
It takes a ton of confidence to put one’s own name on the sign, but all indications so far are that Bob Mariano has a winner with Mariano’s Fresh Market, which opened its first location in suburban Chicago a little more than three years ago, and has since expanded to 13 stores in the city and suburbs. Mariano’s has been warmly embraced by shoppers, who have found it to be a haven for foodies as well as a reasonably priced stock-up destination.
That cup of love veritably ran over with the announcement that Roundy’s would be purchasing 11 closing Dominick’s locations from Safeway as the California-based giant retreats from the Chicago market. Bob Mariano made his grocery industry bones at Dominick’s, learning the business from the founding DiMatteo family as he rose from deli clerk to CEO before departing when the Bay Area team arrived. Many analysts agree that Mariano’s is what Dominick’s could have been had Chairman Bob stuck around or Safeway not entered the picture.
Be that as it may, the Dominick’s deal, coupled with existing growth plans, call for upwards of 50 Mariano’s stores within just a few years, which would make it the No. 2 chain, behind market leader Jewel-Osco.
The coming year will reveal how well Mariano is able to integrate the Dominick’s locations — of which he has intimate knowledge — into his namesake operation, maintaining the current momentum and continuing to enthrall Chicago-area shoppers, whose grocery experience was long overdue for a comprehensive refresh before Mariano’s came to town.
Meanwhile, while Mariano’s is considered the growth banner for Roundy’s, the parent will need to inject new life into its Rainbow, Copps and Pick ‘n Save chains in Minnesota and Wisconsin, and would do well to apply lessons learned in Chicago to its other operations.
Rodney McMullen
CEO
Michael Ellis
President and COO
The Kroger Co.
The nation’s largest traditional grocer is entering the post-David Dillon era, riding high on 10 solid years of consecutive quarterly same-store sales growth driven by a team led by the outgoing CEO, who will stay on as chairman at least through 2014. While some observers expressed shock that Dillon was stepping down, it should have been no surprise that the company had such a carefully executed succession plan to ensure continuity and stability at the helm.
Dillon and Rodney McMullen were something of a dream team, so McMullen’s ascension to the big chair is a no-brainer. His right hand will be Michael Ellis, a 38-year Kroger veteran who most recently was SVP of retail divisions. Previously president of Fred Meyer, Ellis has been leader of five supermarket divisions, as well as Kroger’s jewelry and c-store businesses, since 2012. Described as a “team builder” who brings “broad-based experience” and “dynamic leadership” to Kroger’s executive suite, Ellis has been, in McMullen’s words, a “key player in our strategic efforts for many years.”
McMullen and Ellis pick up the reins at Kroger as it completes its acquisition of Harris Teeter and naturally looks for its next expansion opportunity while continuing the successes of the company’s “Customer 1st” strategy.
Can this new dream team continue the momentum of the past decade? Considering the care and precision with which Kroger tailors its leadership, the smart money says yes. The key question is, amid an industry entering a new round of major mergers and acquisitions, where will they take Kroger next?
Randall Onstead
President and CEO Bi-Lo Holdings LLC
The face of the grocery market in the Southeast is undergoing a radical transformation, and Bi-Lo is at its center.
The combined Bi-Lo/Winn-Dixie machine started 2013 in a big way by announcing its intent to acquire Sweetbay, Harveys and Reid’s from Delhaize America for $265 million, aiming to fold them into its flagship banners early this year. Next, Bi-Lo joined the carving up of Piggly Wiggly, grabbing up 22 of The Pig’s stores in Georgia and South Carolina. Then the company sold seven Bi-Lo stores to Publix, giving that chain a northward boost in a tactical maneuver against Harris Teeter, now owned by Kroger.
Onstead certainly has the background and knowledge necessary to create and lead an impenetrable brand. He started his career with Randalls, leading its sale to New York-based private equity firm KKR and then Safeway, and later ran Dominick’s. He’s also been an officer and director with several financial concerns.
Time will tell whether Onstead can pull off the same sort of success with the Bi-Lo/Winn-Dixie group, which, with nearly 700 stores in eight states, is the nation’s ninth-largest traditional grocer.
“Food is very close to my heart.”
—Shelley Broader, President and CEO, Walmart Canada
“We remain focused on delivering steady improvements in our business each and every quarter.”
–Sam Duncan, CEO, Supervalu
“Ellis has been a key player in our strategic efforts for many years.”
–Rodney McMullen CEO, The Kroger Co.