Viewpoints

With Safeway, Cerberus acquires management talent

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Editor's note: This Viewpoint was updated on March 21 to include comments from Albertsons.

Albertsons, it appears, has acquired a succession plan for its aging lineup of leaders.

When Cerberus Capital Management and its partners bought Albertsons and its sister chains from Supervalu and reunited the two Albertsons divisions a year ago, the company announced a roster of veteran Albertsons executives to run the stores. Some of those were coming out of retirement after long careers at the Boise, Idaho-based chain, and many others were thought to be nearing the end of their careers.

How long could they be expected to run this born-again conglomerate of banners?

Not all that long, it appears.

With the announcement this month that Albertsons and Safeway plan to merge, it quickly became apparent which of the two was taking charge. Yes, it’s Cerberus’ money that is providing the fuel, but it seems as though it will be Safeway’s crew that will be steering the ship.

Jose Tamez, managing partner at executive search firm Austin-Michael, noted that Albertsons had been “thin” on talent, “with no succession planning upon recently bringing back some of the former execs.”

“They have just acquired a whole bunch of talent,” he said. “Safeway has deep talent.

A spokeswoman for Albertsons told SN that while Albertsons does keep its headquarters operations lean, it feels it has considerable talent — and a succession plan — in its regional divisions. That is a deliberate strategy on the part of CEO Bob Miller to keep management as close to the action as possible, she said.


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In the announcement of the planned merger, the two companies noted that Miller, one of the longtime Albertsons veterans, would become executive chairman of the combined companies, while Robert Edwards, who just a year ago stepped into the CEO role at Safeway, would remain as president and CEO of Safeway/Albertsons.

“I and the rest of the Safeway team look forward to working with the Albertsons team to create an even stronger organization with a talented management team,” Edwards told analysts in a conference call discussing the merger.

It’s easy to see how Safeway’s management could have a significant hand in running the combined operations. Once the antitrust watchdogs force the disposal of some stores in overlapping markets, and the two companies sell off some other assets to trim the debt incurred from the merger, much of the remaining Albertsons operations could be readily combined with Safeway’s existing regional structure, which includes seven divisions: Denver, Eastern, Northern California, Phoenix, Northwest, Texas and Southern California.

Exceptions might include Jewel-Osco in Chicago, where Safeway no longer has a presence as an operator, and Shaw’s/Star Market in New England.

And although Safeway has left the Philadelphia area though its sale of its Genuardi’s banner, Albertsons’ Acme stores could eventually merge with Safeway’s presence in the Baltimore-Washington region. With Chicago closed down, Safeway Eastern is now the company’s smallest division with about 127 locations, but would nearly double that if it were to join forces with the 110-store Acme chain.

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Discuss this Blog Entry 23

Sam Martin in A/S future? (not verified)
on Mar 17, 2014

Sam Martin, former A&P CEO, is a very close friend of Bob Miller. Do not be a bit surprised if he lands at Albertsons/Safeway after FTC clearance.

Demolition Derby (not verified)
on Mar 20, 2014

Martin is only good for demolishing something that is sacred. It does not take too much inteligence to close stores, that could have been turned around with a little TLC; and make many long-vested associates cry!

Anonymous1 (not verified)
on Mar 18, 2014

Using Safeway's team to run the combined banners is NOT a good thing.

I can be Anonymous too (not verified)
on Mar 19, 2014

this guy must be an Albertson;s employee...

on Mar 18, 2014

What exactly does this mean "Acme stores could eventually merge with Safeway’s presence in the Baltimore-Washington region" ?

ACME: dwindling numbers (not verified)
on Mar 18, 2014

Mark, After two recent closings, ACME now has 110 stores on its landscape With many more, either underperforming or marginal, it will take a lot more than the Monopoly promotion or "buy any combination of ten items deal" to lift that division out of the dull-drums!

on Mar 18, 2014

I meant they could be run as a single division.

Justrightofcenter (not verified)
on Mar 18, 2014

The leadership is the reason SWY has done poorly keeping them on would be a mistake.

CNTW84U (not verified)
on Mar 18, 2014

The strong talent will survive as they do in all M&A's. Does not matter if their red or blue

Bjorn Olsen (not verified)
on Mar 18, 2014

SWY has been around and long time, and has a very young proven management team--they will do well with their counterparts at Albertson's. I am betting that the combination of the two will make Cerberus a lot of $$$, and they are thinking the same thing.

Anonymousss (not verified)
on Mar 18, 2014

As a long time current Safeway manager, corporate management is EXACTLY the reason why they have been running straight to the ground. Do you call selling off branches in Canada and the northeast at huge loses proven or even desirable management? How about an Arizona division that has an amount of profitable stores that I can count my hands? Or Vons and Dominic's divisions that has seen store employees slashed to skeleton crews to "save money" in these troubled times? What about giving nonsensical job titles, absurd salaries, corporate cars, gas cards, and cell phones to friends and family members? If these investors had half a brain, which I certainly hope they do, they fire the majority of people sitting up in Pleasnton and over in Arcadia, they will go unannounced to store level in various areas and see how poor and deteriorating the stores really are, and talk to the employees in order to turn things back around.

Anonymous DS (not verified)
on Mar 19, 2014

As a 5 year employee of Safeway, who got a much better stress free job and commutes by bus to his new job, I have seen it for myself the skeleton crews as I was the C and S, Cart and Sweep Courtesy Clerk. Out of my 150% dedication, bringing in carts, 2 hernia surgeries, and even had my knee taken out 3 years ago from a company picnic, they never moved me up. I was their best bagger and SHOULD HAVE been promoted and never was. I got a better salary and more opportunities at my better job and NO UNION to pay.

smart00 (not verified)
on Mar 21, 2014

I completely agree. Who came to the conclusion that Safeway corporate management has talent?! That is strictly hype that is generated among their own little circle. Look behind the curtain and you get the real story.

None (not verified)
on Mar 26, 2014

I completely agree. Hey remember Genuardi's??

smart00 (not verified)
on Mar 21, 2014

I completely agree. Who came to the conclusion that Safeway corporate management has talent?! That is strictly hype that is generated among their own little circle. Look behind the curtain and you get the real story.

on Mar 19, 2014

The one area that needs to be improved on first is warehousing. We have the AWG and Tom Thumb Grocery Warehouse covering Texas. An efficient warehouse could eliminate the need for AWG and put distribution back into the hand of Cerberus. As it is, Albertson's must compete with military bases for delivery not to mention the newcomer to Texas, Winco that AWG services.

Get lean and do it quick...Winco has 20 stores coming to Dallas Fort Worth.

Anonymous 12 (not verified)
on Mar 19, 2014

when are they going to buy supervalu

P Ryan (not verified)
on Mar 20, 2014

If Albertsons moves all current Safeway HQ operations to Boise, I expect the "Talent Pool" to become more of a puddle.

Anonymous_me (not verified)
on Mar 21, 2014

That move would never happen. Why leave a dynamic market in California to go to ID? Makes no sense to me......

P Ryan (not verified)
on Mar 25, 2014

I can see no reason for anyone to flee the low tax and regulatory environment of the East Bay of California.
No, wait..........

Well at least Robert Edwards, the new CEO, is a life long Safeway who would be sure to keep the company HQ in Pleasanton.
No, wait........

on Mar 21, 2014

I think Safeway's reputation has declined over the years for lots of reasons, but here is another that the customers should consider, and would certainly disapprove. Their centralized accounting center in Phoenix employs approximately 1500 or more people. They are not closely monitored by the corporate office in Pleasanton, which has resulted in an atmosphere of cronyism, and one that allows bullying to go on with no intervention or support. The EEOC is a frequent visitor for violations of classes that are protected. New ownership would have them on their best behavior, for a while..

on Mar 24, 2014

For way too many years, Safeway has been run through the eyes of an accountant (pervasively from the top to the regionals).

The toll has been expensive and toxic. The rate of imposed and unreasonable stress and duress on District Managers and Store Managers has caused much "talent" to leave (store level).

I hardly believe that this would be an acquisition of "talent".

The leadership that was responsible for the "Joe Albertson" days is what is needed if this merger goes through.

If anyone remembers those innovative, incredible combo stores that Albertsons had that were virtual palaces! Immaculate, large and happy employees and customers.

I remember those stores, and I was amazed at the operations. The leaders that created that experience need to come back from where ever they are and take hold of this merger if it goes through.

Otherwise they will have they the same type of ambivalent, non-grocery man, non-people man leaders in charge.

None (not verified)
on Mar 26, 2014

Safeway ruined grocery chains all across the US. I'm sure many grocery chains are happy about this news.

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