Steve Burd, Safeway’s long-time chairman and CEO, will retire as chief executive and director of the large Pleasanton, CA supermarket chain at the company’s annual stockholders meeting on May 14, 2013. The board of directors will begin a search for a successor, and will consider both internal and external candidates for the job. Burd will help with the search and will continue to assist the company after he transitions out of his leadership posts.
Burd joined Safeway in October 1992 as president and was appointed CEO in May of the following year. As CEO, he has been responsible for transforming the company over an unprecedented 20 years at the helm.
Like other large supermarket chains retailers over the past two years, Safeway has struggled with same store sales and its stock price. During the past year, the Pleasanton,CA based retailer made several moves to position itself to be a stronger operation in the future.
In April 2012, Safeway EVP/CFO Robert Edwards, 56, succeeded Burd as president of the company, taking over day-to-day oversight of retail operations, marketing, merchandising, corporate brands, manufacturing, distribution and finance functions. Edwards joined Safeway in 2004.
Edwards and executive VP Larree Renda, 54, are considered two of the strongest candidates to be considered for the CEO post. Renda, who has been with Safeway since 1974, now oversees information technology and real estate initiatives, human relations, labor relations, strategic initiatives, corporate social responsibility, government relations, public affairs and Safeway Health.
In September 2012, Safeway announced plans to sell a minority stake in Blackhawk Network Holdings, its gift-card subsidiary, a move analysts said could generate more than $750 million while enabling Safeway to continue to reap benefits from Blackhawk’s growth.
Safeway said it will file a registration statement for a potential initial public offering of Blackhawk and expects to execute the deal during the first half of this year. Blackhawk represents volume of $6.9 billion, or 14 percent of Safeway’s business.
Among some of Burd’s key initiatives during his leadership of Safeway included establishing a culture of thrift and capital discipline, creating an enhanced customer service program, developing the stores current “Lifestyle” store format and forming Blackhawk. He also accelerated the company’s efforts in charitable giving and sustainability. During his tenure, Safeway raised more than $2 billion for charities, including over $200 million for cancer research.
Burd’s arrival at Safeway, a largely unionized company, coincided with an extraordinary growth in new food retail formats, virtually all of them non-union. These changes put downward pressure on both sales and margins, but through strategic initiatives and cost reduction efforts, Safeway still managed to outperform the S&P 500 over the last 20 years.
Under Burd’s stewardship, Safeway has also become one of the nation’s most recognized leaders in health care. In the last eight years, Safeway has introduced innovative design and practice features into its health plans. As a result, while the average U.S. company experienced an eight percent annual growth in employer health care costs from 2005 through 2011, Safeway averaged a two percent annual growth rate for both the employer and employee contributions, the company noted.
More recently, Safeway has introduced a digital marketing/loyalty platform called ‘just for U.’ This initiative allows the company to personalize its prices to individual shoppers. Safeway has also partnered with a technology company to bring innovative health care services to Safeway’s customers.
“I feel this is the right time to move forward with a transition plan,” said Burd. “The company is gaining market share with each passing quarter. We have developed the most sophisticated digital marketing platform in retail, we are implementing the most comprehensive and personalized fuel loyalty program, and we will be rolling out a wellness initiative that has the potential to transform the company.”
“While I still have the high level of energy and enthusiasm I brought to the company 20 years ago,” Burd added, “I need more personal time and, given my extensive work in health care, I want to pursue that interest further.”
“Steve has been an iconic leader and is one of the industry’s most innovative CEOs,” said Gary Rogers, the retailer’s lead independent director. “He will be very difficult to replace. As he moves to the next phase of his career, we hope to continue to leverage his input and assistance as the company moves ahead with its exciting new programs.”