OAKLAND, Calif. -- Steven A. Burd took the consultant's route to the top at Safeway. He was part of a team of consultants that conducted a strategic review and operating plan in mid-1992. By October of that year, he was named president.
several other investments held by Kohlberg Kravis Roberts & Co., New York. KKR owns 65% of Safeway's stock.
However, Safeway is the first company at which Burd has accepted a full-time management position, and it's likely to be a lengthy tenure, company officials said, since several of Burd's investment options in the company do not vest for three years, and others vest over the remaining four years of his seven-year contract.
Securities analysts credit Safeway's financial turnaround in large measure to Burd's presence. According to Debra Levin, an analyst with Morgan Stanley, New York, "Burd has brought a genuine cost discipline to Safeway that was not there to the extent it is now.
"His focus on cost reductions at store level has really helped more than anything else because, as a leveraged company, Safeway needs to bring its operating expense ratios down for faster earnings growth."
Gary Giblen, an analyst with PaineWebber, New York, noted Burd's approach has been so effective "that Vons is now following the same path."
Safeway owns a 35% equity interest in Vons Cos., Arcadia, Calif., and Burd is a member of Vons' board. Vons has experienced same-store sales declines of up to 10%, although they were only a negative 7.7% in Vons' fourth quarter.
