Onstead Steps In as Bi-Lo CEO

JON SPRINGER

MAULDIN, S.C. — Randall Onstead, the supermarket industry veteran who last week was named chairman of the board and interim chief executive officer of Bi-Lo here, said he will launch a search for a permanent CEO early next year.

Onstead is succeeding Brian Hotarek, who concurrently announced his retirement. In an interview with SN last week, Onstead said he would work with Hotarek on a transition over the coming weeks and that he would manage the 223-store chain through the holiday season. He said he does not intend to be the CEO over the longer term.

“My intention is to be the board chairman and be involved at that level going forward,” said Onstead. “Brian had previously said he would like to retire at the end of the year. So rather than try and conduct a search at such a critical time of the year, this allows Brian a chance to retire.”

Onstead is a former CEO at Randalls Food Markets and a former president at Dominick's. He joined the board of Bi-Lo earlier this year. Since leaving Dominick's in 2004, he said he had advised private-equity concerns on supermarket deals and has served on corporate boards, including that of Bellingham, Wash.-based food retailer Haggen Inc., a position he said he intends to keep while leading Bi-Lo.

Hotarek, a veteran executive of Bi-Lo's former owner Ahold, was named CEO of Bi-Lo in January 2007 by Lone Star Funds, the private investment group that purchased the company from Ahold in 2005. Bi-Lo under Hotarek split off its struggling Bruno's division, a move that at the time prepared Bi-Lo for a sale.

But Lone Star pulled the chain from the market a year ago, citing a tightening credit market. Onstead last week said the chain is still not for sale. “That's not to say we don't receive inquiries from time to time, but it's not currently up for sale,” he said.

Onstead said growing top-line sales at existing Bi-Lo stores will be his top priority. He declined to provide specific details of a capital spending budget at Bi-Lo.

“We have invested a lot of capital in recent years, and we will continue to invest capital where we need it,” he said.

“The main priority at this time of year is to make sure stores are ready for the holidays, and make sure we do a great job of taking care of customers who may not have been in the store in a while,” Onstead said. “To that extent, I want to be sure that our standards are there; that out-of-stocks don't exist; and that we have the right merchandise, in the right stores, at the right price.”