ALBERTSONS TRIMS MANAGEMENT IN INTERMOUNTAIN RESTRUCTURING 2004-07-05 (1)

ELLIOT ZWIEBACH

BOISE, Idaho -- Albertsons here said it is eliminating "less than 50" positions in its former Intermountain region as part of a management restructuring that has already been implemented in its Dallas-Fort Worth division -- a move industry analysts told SN may represent an effort by Albertsons to depart from conventional industry thinking.

Stacia Levenfeld, an Albertsons spokeswoman, said the new structure eliminates layers of management between the division president and frontline store associates "and moves decision-making closer to the consumer," though she declined to provide specifics about the kinds of positions that were being eliminated.

The old Intermountain region, which consists of 120 stores in Idaho, Utah and Montana, is part of a new, broader Intermountain West division that encompasses 400 stores.

Levenfeld declined to pinpoint how many positions were eliminated in Albertsons' 200-store Dallas-Fort Worth division.

Analysts contacted by SN said they believe Albertsons is eliminating some division manager positions and also giving some store managers more than one store to oversee.

According to Gary Giblen, senior vice president and director of research for C L King Associates, New York, "Thinking outside the box and changing traditional structures is probably a great thing to try, though very often these kinds of ideas work out more favorably on paper."

Another analyst, who asked not to be identified, offered a similar opinion. "The industry has a way of doing things based on conventional wisdom, and this may be an attempt by Albertsons to attack conventional wisdom and try something different.

"But conventional wisdom is what it is because it represents what usually works. However, Albertsons is a company that has had a lot of fat, with no effort in the past to be more efficient, and if it's tried this approach in Dallas-Fort Worth and it helped -- or didn't hurt -- then maybe there's some wisdom to expanding it."

Mark Wiltamuth, an analyst with Morgan Stanley, New York, said the delayering of division management "is part of Albertsons' effort to right-size its cost structure."

The ability to use technology to track product movement may make it possible for Albertsons to eliminate some district managers and give broader controls to regional managers, "who can figure out the movement data to resolve problems at the stores, though they can't be as hands-on as division managers can be," Giblen said.

"Eliminating management layers is certainly a way for Albertsons save money and it could have some validity," he said, "but it also could be a short-term cost-cutting effort that comes at the expense of good store execution, and it could lead to the stores becoming more standardized."