Analysts: Edwards’ Promotion Ensures Continuity at Safeway

PLEASANTON, Calif. — The selection Monday of Robert L. Edwards to succeed Steve Burd as chief executive officer of Safeway here promises continuity rather than any change of direction, analysts told SN.

Robert L. Edwards

Edwards, who was named president of Safeway a year ago, will formally become CEO May 14, following the chain’s annual meeting.

Succeeding Burd as Safeway’s chairman, with the title of non-executive chairman, will be T. Gary Rogers, the company’s lead independent director, who joined the board in March 2011.

“The board undertook a thorough search and concluded that Robert is the best candidate to lead Safeway,” Rogers said. “He has the talent and experience that give the board confidence he will be a successful CEO.”

There were reports Monday that Safeway was interested in hiring Rick Dreiling, chairman and CEO of Dollar General, Goodlettsville, Tenn. — who spent 33 years at Safeway — “but they were chasing him more than he was chasing them,” one industry observer told SN.

Dreiling, who went to work for Safeway as a clerk in 1969, left the chain in 2003 with the title of executive vice president, marketing, manufacturing and distribution, and subsequently was executive vice president of Longs Drug Stores and CEO of Duane Reade Holdings before joining Dollar General.

Spokesmen for Safeway and Dollar General declined comment.

Read more: Safeway Names Edwards President

John Heinbockel, managing director for Guggenheim Securities, New York, said Edwards’ selection as CEO “has been obvious for months — in no small measure because this was Burd’s preferred outcome. As Safeway’s business and stock began to perform better during 2013, the ‘continuity’ argument grew stronger.”

He said Edwards’ selection means a continuation of the strategic programs championed by Burd, including Just for U, fuel rewards and the pending health care initiative.

“Burd’s day-to-day presence will be missed at the company,” Heinbockel said. “We found him to be a strategic and innovative executive. Edwards is a talented, well-respected and results-oriented executive, and we suspect he will seek Burd’s counsel on a regular basis.

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“In fact, we expect Burd could be Safeway’s informal consultant.”

Deborah Weinswig, managing director at Citi Research, New York, said the elevation of Edwards to CEO “was largely expected by the Street.”

“This decision creates minimal disruption for the company,” she said. “Edwards was very successful at implementing Safeway’s strategic initiatives at the direction of Steve Burd, and his tenure at the company is a testament to his success.

“He is an effective leader that is results-driven and can connect with employees on a personal level. We are confident he will shine in the spotlight and make a positive mark on the company’s future.”

Read more: Burd to Retire as Chairman and CEO

Besides becoming CEO, Edwards, 57, will become a Safeway director. He is already a director of Blackhawk Network Holdings, a Safeway subsidiary, and of KKR Financial Holdings, New York.

Edwards joined Safeway as executive vice president and chief financial officer in 2004 after serving in major executive positions with Maxtor Corp., Milpitas, Calif., a manufacturer of hard disk drives; Imation Corp., Oakdale, Minn., a data security company; and Santa Fe Pacific Corp., Schaumberg, Ill., a holding company for Santa Fe Railroad’s non-rail interests.

Rogers, 70, is the former chairman and CEO of Dreyer’s Grand Ice Cream, Oakland, Calif., and subsequently served as non-executive chairman of Levi Strauss & Co., San Francisco, and of the Federal Reserve Bank of San Francisco.

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