LOYALTY IN THE CARDS WITH ALBERTSON'S EXECUTIVE

SARAH MULHOLLAND

BOISE, Idaho -- When Albertson's officials here named Robert Dunst executive vice president and chief technology officer, it didn't take long for industry observers to figure it out.

After all, the announcement follows the company's decision last month to offer a Preferred Savings Card at stores operating under the Albertson's banner for the first time in the chain's history.

With Dunst -- a 25-year veteran of the grocery industry -- most recently holding several key technology positions during a six-year tenure with Safeway, Pleasanton, Calif., the math was clear.

According to industry observers, Safeway's long-standing reputation in the loyalty card arena makes Dunst an ideal choice.

Sources speculate that he will bring a high level of expertise to the chain's efforts to move forward with a loyalty card program.

"You have to make the business decision first and then you have to try to work out the execution phase," said Mark Husson, analyst for Merrill Lynch, New York.

"You cannot execute with people who have no experience.

"Safeway is ruled by loyalty cards. They are probably the best at mining the databases for usable data."

Chuck Cerankosky, managing director for McDonald & Co., Cleveland, expressed a similar opinion.

"Managing a loyalty card program and the attendant promotions is very information system intensive," he said. "As an early adopter of a loyalty card program, Safeway has a very advanced promotions program."

Cerankosky believes that Dunst could potentially play a role in expanding the program to the California market and beyond. Currently, the program is limited to 100 stores in the Dallas-Fort Worth area.

"Albertson's has hinted that they are going to do what it takes to fix California," he said. "I would not be surprised if loyalty cards become a part of that solution.

"If the company meets with success in California, loyalty cards will spread to all the Albertson's divisions that do not currently offer them."

Since acquiring American Stores in 1999, Albertson's has been operating two chains, Jewel-Osco and Acme, which already had established loyalty card programs.

According to a company spokeswoman, the success of these operations was a primary factor in the decision to adopt the program in Texas.

While he was at Safeway, Dunst's titles included vice president of advanced technology, and director of systems architecture and infrastructure.