Albertsons Getting More Competitive

ELLIOT ZWIEBACH

PHOENIX — Morale is up at the stores operated by Albertsons LLC, Boise, Idaho, and performance levels have accelerated, according to Bob Colgrove, president of the chain's Southwest division. Based here, the division is part of the original Albertsons chain whose underperforming assets were acquired last June by Cerberus Capital Management and four real estate partners. Colgrove, a 32-year Albertsons veteran, headed the chain's Dallas-Fort Worth division prior to the change in ownership, then transferred after the sale to head up the Southwest division, which encompasses 80 stores in Arizona, New Mexico and El Paso, Texas. In an interview with SN, Colgrove reviewed some of the changes that have been made at the division.

SN: What have you done at the store level since June to improve the operation?

BC: We spent the first 60 days after the ownership change cleaning up the stores, painting them, and replacing and repairing broken equipment. We also supplied all associates with new uniforms and shared with them insights into the basic fundamentals we would be working on going forward.

SN: And what kind of results have you seen?

BC: We've worked hard to build our customer count back up to previous levels and win back customers we lost, and that takes running clean, well-organized stores with incredible customer service. In a meeting a few weeks ago with 2,000 associates from our front-end staff, I was told they're getting a lot of comments from customers who notice that the stores look better, they're being run better and there are more smiles on associates' faces. And I believe we're more competitive than we were seven months ago.

SN: What did you bring to the mix when you moved to the Southwest division?

BC: I introduced five initiatives that other divisions are also pursuing in some form — to make sure every decision made at the local level contributes to top-line sales; to provide the best customer service at every store; to put a tremendous focus on perishables; to commit the entire leadership team to operate clean, neat, well-organized stores; and to create a strong focus among associates on ownership and entrepreneurship to improve store-level operations for customers.

SN: And how well have employees and shoppers responded to those goals?

BC: We've had an incredibly strong, positive response. In terms of boosting the top line, we've implemented ideas in marketing, merchandising and sales at the local level, geared to customers in each operating area. In terms of serving customers better, we hired a new director of customer service and a staff of four, to emphasize customer service throughout the store, not just at the front end. To determine how we're doing on customer service, we installed an 800 phone line, where we get about 200 responses per store per month. When we started that effort in June, we were getting a score of 52% to 54% on service levels, and now we're up to 67%. To fulfill the commitment on fresh, we're working hard at the distribution level on the quality and handling of product, and then, once it gets to store level, making sure it's rotated correctly. In terms of operating clean stores, we've polished the floors, scrubbed the shelves and begun to put out products customers want to buy in each operating area. To create a more entrepreneurial attitude among associates, we've asked store directors to operate their store as if they owned it themselves, and we constantly emphasize that decision-making is done right here in the division.