What is in this article?:
- Executive to Watch: Randall Onstead Is Melding Bi-Lo and Winn-Dixie
- Learning Under KKR
Title: Incoming CEO, Bi-Lo/Winn-Dixie
Biggest Challenge: Maintaining standards across the newly expanded organization
“First, you have to maintain your standards, especially when a company grows further away from its home base,” he told SN.
“Second, you have to resist the urge to adopt a strict ‘one-size-fits-all’ merchandising strategy. We have areas that have very different shopping behaviors and taste profiles, and for that reason, centralization works against what our customers want, which is a truly local spin on the foods they love to buy.
“Third, there’s the obvious challenge of having a limited amount of time to spend in each store as you grow and have a larger geographic reach. Tied in with that is the difficulty of maintaining visibility with your employees, which is very important to me.”
Onstead, 55, is set to become president and chief executive officer later this year of the combined Bi-Lo/Winn-Dixie organization, which will operate just under 700 stores with a estimated volume of nearly $10 billion.
Industry executives who know Onstead told SN they believe he will be up to the task.
“Randall has all the capabilities of handling anything that’s thrown his way,” said Dick Goodspeed, chairman of Unified Grocers — and the former president and CEO of Vons and Lucky Stores.
“He’s very astute and a quick learner, and he’s good with people. In addition, he has a true financial understanding of retail. So I see no obstacles holding him back once the two companies are merged.”
Jack Brown, chairman and CEO of Stater Bros. Markets, San Bernardino, Calif., said he believes Onstead has “the right stuff” going forward.
“Merging the cultures of two companies is the most difficult thing you can do in the retail business,” he explained. “It’s more difficult than increasing sales or margins. But Randall will certainly be up to the challenge. He’s a tremendous executive who has the kind of personal touch that’s unusual in this business today.”
Onstead started his grocery career in Houston at Randall’s, the privately held chain named for him by his father, Robert Onstead. The younger Onstead began working there in 1978 and held various positions before being named president and chief operating officer in 1986, adding the title of chief executive officer in 1996 and then chairman in 1998.
In 1992 Randall’s acquired the Tom Thumb chain in Dallas, but after running into financial problems, it opted in 1997 to sell 61% of its equity to Kohlberg Kravis Roberts & Co., a New York-based investment firm.
Working with KKR helped him become a better executive, Onstead told SN. “As a portfolio company of KKR, Randall’s was held to high accountability and governance standards, very similar to those of a public company.”