2013 Power 50: Sam Duncan, No.1 in Wholesalers

Sam Duncan

Of all the chief executive jobs in the food distribution business, perhaps the toughest right now is held by Sam Duncan, who in February began leading the reconstruction of Supervalu as it parted ways with its largest retail properties.

In mid-March Minneapolis-based Supervalu completed the sale of five retail banners — Albertsons, Jewel, Acme and Shaw’s/Star Market — to AB Acquisition LLC, an affiliate of a Cerberus Capital Management-led investor consortium, for $3.3 billion; Symphony Investors, an investor group led by Cerberus, also acquired 21.2%% of Supervalu stock. Supervalu said the restructured entity would have annual sales of about $17 billion, a little more than half of its previous size.

Under Duncan, Supervalu has refocused on its wholesale business, which supplies nearly 2,000 independent retailers and now accounts for about half of its revenues; remaining revenues are about equally split between its two other divisions: Save-A-Lot, with about 1,300 stores (and growth expected this year), 70% licensee-owned; and five remaining retail banners comprising 191 stores (Cub, Farm Fresh, Hornbacher’s, Shop ‘N Save and Shoppers Food Warehouse).

"Taking a company through the sale and everything that comes with a transaction of this size is challenging, not because of the work that actually takes place, but because of the impact on our employees," said Duncan in an email communication. Supervalu said in March that it would cut an estimated 1,100 jobs.

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Given its struggles of the recent past, publicly traded Supervalu is intent on driving sales and cash. "It is essential that we turn our comparable-store sales positive so we can begin growing revenues again," said Duncan, who has spent more than 40 years in retail, including executive positions at Albertsons, Fred Meyer and Ralphs, and most recently at OfficeMax and ShopKo Stores (both turnaround companies) where he was CEO. "If it’s not helping drive sales today, we are asking tough questions about whether it is needed or should be put on hold and considered again in the future."

The new Supervalu is returning to its wholesale roots. "What we are really great at is being a wholesaler," said Duncan. "That will definitely be our primary focus." Supervalu recently completed its first national retail advisory group meetings, for which independents from all over the country convened for the first time to discuss their business challenges.

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To better support each of its three divisions, Supervalu has been moving much of the decision making for merchandising, marketing and store operations to its division leadership teams. "We believe this decentralized model will help us move with more urgency and better meet the needs of our customers, whether they are in Minnesota, St. Louis or Virginia Beach," said Duncan.

Duncan believes the company has come through the transition in pretty good shape. "We have strong leadership teams in place, and we have employees across the company who are focused and ready to help grow our business again," he said. "That’s what excites me and what I consider a success just two months after completing the sale."

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