CMO Cornell Leaving Safeway

ELLIOT ZWIEBACH

PLEASANTON, Calif. — The pending departure of Brian Cornell as executive vice president and chief marketing officer at Safeway here may have short-term negative implications for the chain, according to some analysts.

Cornell said last week he will leave Safeway June 1 to search for the top leadership position at another company. He had joined Safeway from the CPG industry in mid-2004 and was a chief architect of the chain's “lifestyle” makeover strategy.

“Cornell's departure has to be viewed as a negative for Safeway,” John Heinbockel, an analyst with Goldman Sachs, New York, said, “[though it] will not alter the company's current operating momentum. The various projects already in place should enable Safeway's momentum to continue for some period of time, perhaps a few years.”

Gary Giblen, an analyst with Goldsmith & Harris, New York, said the loss is “a negative for Safeway, because Cornell has tremendous respect from the vendor community, and though the programs will survive him, someone else will be responsible for overseeing the vendor partnerships.”

Jay Whitmer, an analyst with Cleveland Research Co., Cleveland, said he doesn't anticipate any disruption at Safeway, “because Cornell put together a complete package of merchandising, private-label and brand strategies. But there are more opportunities that need to be refined, and that will be up to someone else who has yet to be identified.”

Mark Husson, New York-based managing director for HSBC Securities, London, called Cornell “a marketing pro who got good results, but like Julian Day before him [Safeway's onetime chief financial officer who left to become chief executive of Sears and, subsequently, Radio Shack], he realized [Safeway President, Chairman and CEO Steve] Burd isn't going anywhere anytime soon.

“So the downside of having a young, successful CEO is that you lose a lot of talented people. But on the plus side, Safeway is the kind of place that's attracting those kinds of people in the first place.”