AMERICAN STORES NATIONALIZING ITS MARKETING

CAROL ANGRISANI

CARLSBAD, Calif. -- American Stores Co., Salt Lake City, is reorganizing its regionalized marketing strategy to a more national approach.

The move follows a similar change in American Stores' procurement services, which it nationalized for private label four and a half years ago and for branded products 18 months ago.

The company's strategy was outlined in a presentation here during the Private Label Manufacturers Association's Annual Meeting and Leadership Conference. Separately last week, American Stores provided details about executives who would shift into new positions.

The company has formed a new centralized unit in Salt Lake City and named Allen Zietz to head the operation as executive vice president of marketing, according to Dan Zvonek, director of public and investor relations. Zietz was general manager of Lucky Stores Northern California division, San Leandro, Calif. Division marketing organizations will report directly to Zietz.

"We have built a dynamic marketing organization that will provide the leadership and direction we need to surpass the expectations of our business and our customers," Zietz said in a statement. "We are on the right track to accomplishing our goal of becoming a single operating company."

American operates food, drug and combination stores under a variety of banners in the Northwest, Central and Southwest United States, including Acme Markets, Jewel Food Stores, Lucky, Jewel Osco, Osco Drug and Sav-On.

Ron Carlson, vice president of private label, said the move is the next logical step in the evolution of American Stores' program.

"While we had nationalized procurement, marketing was left in each division," Carlson told SN in an interview. "What we've decided to do now is to bring marketing in with procurement so that they're working together."

Carlson, who has announced his plans to retire, spoke with SN after appearing on a panel during the PLMA event.

Carlson described the national strategy, which will cover both private-label and branded products in all categories, as a more efficient way to procure and market products. The new system will enable the company to take plans from the buying stage to the selling phase in a true category management form, he said.

"This way, you have a complete flow, from procurement to selling. You're not disjointed by doing procurement in one place and selling and marketing in another," Carlson said. "The same person doing the buying is doing selling. That's what category management is."

The reorganization is an attempt by American to centralize as much as makes sense without giving up the recognition of the individual chains as serving different markets, said Chuck Cerankosky, a financial analyst with the Cleveland office of Tucker Anthony, Boston. However, "even northern and southern California are approached differently by Lucky Stores," he said.

Cerankosky said the move toward coordinated promotions makes sense for products that sell well throughout the country, like breakfast cereal, but not for regional items, like rock salt.

"If it's possible to get more promotional dollars because you're promoting the product companywide, rather than just the Acme division, then it makes sense to do it, as long as that product fits in that division," he said. He also said American Stores' various chains operate quite differently. In California, Lucky Stores is an everyday low-pricing operator, whereas Jewel, in Chicago, is promotional. "These stores have different names, different images and all of them are far apart," he added.

The new organization will also include Roy Fossum, who is being promoted from vice president of grocery and beverage procurement to senior vice president of corporate brands marketing; Bernie Ellis, promoted from senior vice president of marketing at Acme to senior vice president of grocery marketing for American Stores; Craig Herkert, from vice president of dry grocery procurement to senior vice president of fresh food marketing; and Gary Hunstiger, from vice president of general merchandise procurement to senior vice president of general merchandise marketing.