PG Web Extra: Ones to Watch - Where Are They Now?

A year ago, we planned to keep an eye on these executives – let’s see what they’ve been up to over the past 12 months. (Be sure to visit this year's class of Ones to Watch!)

Shelley Broader, Wal-Mart Stores Inc.

Last January, Broader was president and CEO of Walmart Canada, a position to which she brought 20 years of retail leadership experience from not only the Bentonville, Ark.-based superstore giant but also Hannaford Bros. and Michael’s.

Broader’s skills and achievements did not go unnoticed – she was promoted to EVP, president and CEO of Walmart EMEA, effective last June 1. In this role, Broader will lead Walmart’s retail operations and oversee business development in Europe, the Middle East, Sub-Saharan Africa and Canada. She reports to David Cheesewright, president and CEO of Walmart International, who said of Broader, “Shelley has been a strong leader since joining Walmart Canada and is the ideal person to leverage the tremendous potential the EMEA region holds for our company. Shelley’s leadership of our business in Canada during a time of increased competition underscores her knowledge of the retail environment which will serve her well in her new role.”

Walmart employs more than 285,000 associates and operates more than 1,345 retail units in Canada, Sub-Saharan Africa and the United Kingdom.

“Walmart has strong operations and excellent teams of associates” in these regions, Broader said. “I look forward to working with the teams to build on this success and to bring our mission of saving people money so they can live better to even more families across the region.”

However, some observers suggest Broader will have her work cut out for her, as Walmart faces challenges around the globe.

Burt Flickinger, managing partner of New York-based Strategic Resource Group, notes that stores in Central and South America that Walmart acquired from Ahold are struggling, and the company faces additional challenges in Africa, Asia and the U.K. “Walmart struggles so much outside of North America, it’s going to be that much more important for Walmart to succeed in Canada going forward,” he says. “Aldi’s going to be expanding very aggressively; Dollar General is going to continue to expand. Walmart can’t find a way to beat Dollar General on general merchandise and hasn’t found a way to beat Aldi. With Costco being its worst enemy, Walmart’s fighting a four-front war for the first time.”

Sam Duncan, Supervalu Inc.

Despite the cost and potential reputational hit of a double data breach this past year, Supervalu Inc. has experienced steady improvement under the leadership of CEO Sam Duncan. Overall sales continue to grow and its hard-discount Save-A-Lot banner continues to be a good performer.

In its most recent financial report, the Minneapolis-based wholesaler and retailer reported its third consecutive quarter of positive sales – up 1.8 percent to $4.02 billion in Q2 of its 2015 fiscal year.

“Midway through fiscal 2015, I am encouraged with the progress we have made across the business,” Duncan said at the Q2 earnings call. “The investments we have made at Save-A-Lot continue to drive sales and our Retail Food stores recorded their third consecutive quarter of positive identical store sales. The addition of the Rainbow stores [in the Twin Cities] this past quarter is a positive for our Independent Business and we are encouraged by the early results.”

This is a far cry from how things looked at Supervalu more than two years ago, when the company cleaned its executive house and sold several of its retail banners back to Albertsons after years of underperformance, including 18 consecutive quarters of declining sales.

Despite the quarter’s overall rosier financial picture, Supervalu incurred $1 million in after-tax information technology intrusion costs following two data breaches that impacted not only several Supervalu banners, but also many of those sold to Albertsons because Supervalu continues to provide third-party IT services to that company as part of a transition services agreement.

Robert Edwards, Safeway Inc.

President and CEO of Safeway after the retirement of Steve Burd, Edwards will take on those posts for the combined entity created by Albertsons acquiring Safeway, a deal expected to close in January 2015.  

Cerberus-owned AB Acquisition LLC, parent company of Albertson’s LLC and New Albertson’s, Inc., will acquire all outstanding shares of Safeway for $40 per share, or $9 billion. The merger will create a network that includes more than 2,400 stores, 27 distribution facilities and 20 manufacturing plants, employing more than 250,000 associates. (A deal to sell off 168 stores to satisfy federal regulatory concerns was reached in mid-December.)

“We’re drawing on the strong talent within both companies to build an innovative, customer-focused and growth-driven company,” Edwards said.

Edwards’ leadership team will include Bob Gordon, EVP and general counsel; Shane Sampson, EVP, marketing and merchandising; Andy Scoggin, EVP, human resources, labor relations, public affairs and government affairs; Jerry Tidwell, EVP, supply chain and manufacturing; Lee Wilson, EVP and chief administrative officer; Bob Dimond, EVP and CFO; Justin Ewing, EVP, corporate development and real estate; Barry Libenson, interim EVP and CIO; Wayne Denningham, EVP and COO, South Region; Justin Dye, EVP and COO, East Region; and Kelly Griffith, EVP and COO, North Region.

Robert Mariano, President, CEO and Chairman, Roundy’s Inc.

His namesake Chicago-area banner is a smash hit, but Mariano and his team still has their work cut out for them on a broader sense at Roundy’s.

As analyzed by PG’s sister publication Retail Leader in its November/December 2014 issue, Roundy’s is at once a one-company example of market bifurcation, a little piece of heaven for Chicago-area grocery shoppers and a breakup waiting to happen.

Milwaukee-based Roundy’s is getting plenty of positive attention in and near Chicago, where its Mariano’s Fresh Market banner took the city by storm in 2013-14. Mariano founded the banner in 2010, and it got a big boost when his company began snapping up shuttered Dominick’s supermarkets, buying 11 of them beginning in late 2013 and converting them to Mariano’s supermarkets that offer a Whole Foods-like experience at much lower prices. Together with existing and newly built stores, Mariano’s Fresh Market now has 27 outlets in the Chicago area, and Bob Mariano has said that he’s thinking of expanding the banner beyond Illinois.

Meanwhile, the $3.86 billion company, 37th overall among U.S. retail grocers by sales in 2013, is in transition, except no one seems sure where the transition is heading. Its Pick ‘n Save banner, with 93 stores, still is the market leader in the Milwaukee area, but its share is eroding, and observers see no sign of gearing up to meet competition that will toughen up very soon. Roundy’s has already pulled out of Minnesota, selling off or closing its 27 Rainbow stores in the Twin Cities area this year.

Roundy’s net income, as reported in its annual statements, has fallen steadily since 2009 to a loss of $69.2 million in 2012, before bouncing back to black with $34.5 million in 2013. Roundy’s stock has lost more than half of its value since an IPO of $8.50 per share in 2012.

It's an unusual situation, analysts say, in that a relatively small part of the business appears to be doing better than the mainstream core. “If they’re telling the truth, then Mariano’s is definitely carrying the core,” says Karen Short, a Deutsche Bank analyst. “The core is really, really struggling.”

One alternative is obvious when one part of a company is notably outperforming the rest: a spinoff. Short, however, notes that spinning off the Mariano’s stores wouldn't be easy: “It’s not unreasonable to think that that's possible, but I don't think you could do a spinoff of the jewel of the company and then saddle the core business with all of the problems.”

David Livingston, a consultant who worked as Roundy’s market research manager until 2002, raised another scenario: “I suppose there will be a spinoff once they figure out how to stick Roundy’s with all the debt and let Mariano’s spin off with a free pass. My guess is Roundy’s will just sell Mariano’s for pennies on the dollar to Bob.”

Rodney McMullen, CEO, and Michael Ellis, President and COO, The Kroger Co.

It appears that Kroger can do no wrong, as the company rolled through its Q3 to mark 44 consecutive quarters of same-store sales growth.

McMullen credits strong sales and core business performance for these stellar results. “Our associates continue to execute our Customer 1st strategy, which is building loyalty beyond the weekly ad and showing yet again that focusing on our customers creates value for our shareholders,” he said at the grocer’s Dec. 4 earnings call.

Total sales increased 11.2 percent to $25 billion for the most recent quarter ending Nov. 8 (the third consecutive quarter since Kroger acquired Harris Teeter), compared to $22.5 billion for the same period last year. “Kroger continues to deliver consistently remarkable results. We expect to exceed our long-term earnings per share growth rate for fiscal 2014,” McMullen said. “We are well on our way to achieving our 10th consecutive year of lowering costs and reinvesting those savings in our people, products, pricing and improved store experience, which together are driving our growth.”

At a time when many of its competitors have lowered their guidance, Kroger has raised its outlook and delivered.

That’s not to say there haven’t been a few chinks in the company’s armor. Kroger’s Kansas-based Dillons Stores division announced last fall that it would exit the Springfield, Mo., market this month, selling four stores to Price Cutter Supermarkets. Company officials noted that Springfield is a very competitive market that has recently experienced rapid growth and change, courtesy of new competitors including several Walmart Neighborhood stores and a new Hy-Vee.

Ellis noted Kroger continues to grow its number of loyal households at faster rate than total household growth. “Loyal household growth is an important measure of our business because it lets us know how well we are connecting with our best customers,” he said at the Q3 call.

McMullen and Ellis are the latest team to steer the well-oiled machine that is Kroger, after retired CEO Dave Dillon and McMullen led the company to a seemingly invincible market position. But in a fashion that has become typical of Kroger executive leadership, the duo is quick to lavish praise on the rank and file.

“You showed our customers how much we care about them, each and every day,” Ellis preached to Kroger associates at the Q3 call. “Because of your efforts, we are able to continue investing in our products, lowering prices and improving the shopping experience in ways that generate customer loyalty.”

Randall Onstead, President and COO, Bi-Lo Holdings Inc.

Onstead is expected to leave his position as president and CEO of Jacksonville, Fla.-based Bi-Lo Holdings, parent company of the Bi-Lo and Winn-Dixie banners, in March, according to a Jan. 6 published report. No reason was given for his departure; a successor has already been chosen, but won't be revealed until a later time, company spokesman Brian Wright told the Florida Times-Union. 

Onstead,  the new vice chairman of the Food Marketing Institute‘s Public Affairs Committee has been with Bi-Lo for seven years, predating its 2012 merger with Winn-Dixie, after which the combined company set up its corporate headquarters in Winn-Dixie's home city of Jacksonville. In 2013, Bi-Lo purchased 22 Piggly Wiggly stores in Georgia and South Carolina, converting them to the Bi-Lo banner. Last year, the company bought 165 stores from the Delhaize Group for $246 million in cash. Bi-Lo currently operates 830 stores in eight southeastern states.

In 2013, Bi-Lo announced its bid for an initial public offering, but withdrew its plans to do so last August without explanation.

A major player in a transforming southeastern grocery market, the parent company of the Bi-Lo, Harveys and Winn-Dixie supermarket banners continue to face competitive challenges, especially from fellow homestate powerhouse Publix, which continues to strengthen its market position and remains a shopper favorite.

This past October, Bi-Lo (created by merger of Bi-Lo and Winn Dixie in late 2011) announced it would close 23 underperforming stores after a review of all 827 locations in its operating area. On the hit list were stores located across six of the eight states in which Bi-Lo operates – Alabama, Florida, Georgia, Louisiana and the Carolinas – and represent less than 3 percent of the grocer’s total store base. Meanwhile, the company expected to open more than 25 new and remodeled stores during fourth quarter of 2014. 

The company reported $7.7 billion in sales for the 40 weeks ended Oct. 2, up 22 percent from the year-ago period, with much of the credit going to the Winn-Dixie side of the business.

More recently, the company in November joined the growing list of grocers allowing customers to use the Apple Pay digital payment system.