Supervalu Revamps Structure

ELLIOT ZWIEBACH

MINNEAPOLIS — The retirements last week of two top Supervalu executives and the reassignment of others signal the beginning of a new, more retail-oriented phase at the company, analysts told SN.

Mike Jackson

Supervalu said last week Mike Jackson, president and chief operating officer, and Kevin Tripp, executive vice president and president of the company's Midwest retail region, would be leaving the company, effective Aug. 14.

The company also said it will consolidate its East, Midwest and West retail regions into one division under Pete Van Helden, currently executive vice president, retail West, with the new title of executive vice president, retail operations. Oversight of pharmacy, formerly overseen by Tripp, will be assigned to Duncan Mac Naughton, executive vice president, merchandising and marketing, as part of a new health and wellness division.

Craig Herkert, who joined Supervalu as chief executive officer in May — and who is adding the title of president — will oversee Save-A-Lot, the company said. Supervalu's Bristol Farms division will continue to report to Pamela Knous, executive vice president and chief financial officer.

Simeon Gutman, a New York-based analyst with Canaccord Adams, said he sees the management shuffle as positive.

“It's an opportunity for Supervalu to streamline the decision-making process and make it more nimble — and anytime you can clear the way for that to happen, it's a positive change,” he said. “With a new, retail-oriented CEO, a flatter structure should only enhance the decision-making process, and as Supervalu completes its center-led migration this year, the business should become even more efficient.”

John Heinbockel, an analyst with Goldman Sachs, New York, said the management transition makes sense on two levels: “First, by having just one senior executive overseeing all operations, the organization should be more customer-responsive, with arguably greater consistency of execution and best practice-sharing; and second, Van Helden is ideally suited to take on this responsibility, given his more extensive food retail background compared with her peers.”

However, he said he hopes the more streamlined organization does not result in a more homogeneous branding effort. “The Albertsons brand on the West Coast would be well-served by more of an everyday-low-pricing approach, while Shaw's in Boston might be better off focusing on quality and service,” he explained.

The decision for Herkert rather than Van Helden to oversee Save-A-Lot is not a surprise, Heinbockel added, “[because] the hard-discount format is unique and would dilute Van Helden's focus on the core supermarket operations. Plus, Herkert has some familiarity with the format, having competed against it” during his tenure at Wal-Mart Stores.

Jackson, 55, spent seven years at Red Owl Food Stores here before joining Supervalu in 1969 as a retail counselor in the distributor's Green Bay division. After holding several merchandising and marketing positions in various Midwestern cities, he was named president of the Tacoma, Wash., division in 1991; president of the Northwest region in 1995; corporate senior vice president of operations for retail in 1999; executive vice president of distribution for food companies in 2001, and president and chief operating officer in 2005.

Jackson is also chairman of the board of the National Grocers Association and head of the search committee seeking a successor to Thomas K. Zaucha as NGA president and CEO. Zaucha called Jackson “a great leader for our industry” and said the association's executive committee would discuss what would happen now that Jackson has retired from his industry position.

Tripp, 55, is a registered pharmacist who worked in various executive positions at American Stores Co. When American merged with Albertsons in 1999 he was named executive vice president and general manager of the drug store division.

When Supervalu acquired several Albertsons divisions in 2006, Tripp was named executive vice president, drug operations, and president of the drug store division.

“This is another critical step in the implementation of our centrally led merchandising model, which is designed to fully lever Supervalu's scale while preserving our local relevance,” Herkert said.