It’s been a busy month at Albertsons, which announced that Jim Donald will be leaving his post as president and chief executive April 25 to become co-chairman of the company. He will be replaced by Vivek Sankaran, former CEO PepsiCo Foods North America, who has been appointed to fill those roles.
Locally, Acme Markets, one of Albertsons’ 14 operating divisions, held its annual vendor meeting at the SugarHouse Casino in Philadelphia. Heading the group of executives who addressed the group of approximately 250 suppliers, brokers and distributors, was president Jim Perkins. The veteran Albertsons executive, who began with the retailer in 1982 and also serves as a corporate executive VP, said that he was optimistic about his company’s 2019 initiatives.
The always candid and direct leader said that Acme was beginning to rebound after a challenging fourth quarter created by lack of weather events (there were eight snow/ice storms in 2017), ongoing market overstoring and the fact that the Eagles did not play in this year’s Super Bowl (they won the big prize last year; Acme is the exclusive supermarket retailer for the Eagles).
Helping fuel Perkins’ excitement is that Acme has 31 stores slated for remodeling this year including eight in the next six weeks. Those stores that will be upgraded are located in: Newark, DE; Smyrna, DE; Ogletown, DE; Pike Creek, DE; Mount Freedom, NJ; Woodbury, NJ; Freehold, NJ; and Westmont, NJ.
Perkins listed 12 other Acme units that will be enhanced later this year including stores in: Upper Darby, PA; Clifton Heights, PA; Glenolden, PA: Philadelphia, (Woodhaven), PA; West Goshen, PA; Thorndale, PA; Boothwyn, PA; Media, PA; Phoenixville, PA; Levittown, PA; Horsham, PA; and Rye Brook, NY. With the exception of the latter store, all other announced remodels will include the addition of beer and wine departments. Moreover, 10 other units with yet–to–be announced locations, will also be refurbished.
Perkins also updated the audience of some new innovative and technology functions that the Malvern, PA-based division is now deploying. Those include Acme’s ability to scan UPC stickers on fresh bulk items and its utilization of VisionPro, a new piece of software which enables the company to offer better visibility and accuracy of production logs, and to improve forecasting and offer real time data which has helped increase sales and shrink. Perkins noted that shrink on Acme’s half-gallons of milk has been reduced by 30 percent with the help of VisionPro. The 35-year Albertsons veteran also detailed the chain’s use of robotics at its new “Broadway” store in Boise, where robots are now helping fulfill e-commerce orders, scanning shelves for inventory control and alerting store associates about spills and missing tags. “We’re still primarily in a test phase, but future opportunities will be large, and we need to be in that space,” he added.
Acme will also shortly be testing its own curbside pickup program (“Drive Up & Go) at 10 stores and Perkins noted that the initial phase of its home delivery partnership with Instacart has gone very well and he’s optimistic that as that program further develops, sales will continue to increase.
In October 2018, Albertsons officially took control of the large Lancaster Distribution Center (LDC) officially based in Denver, PA. That warehouse had been supervised by Supervalu (now UNFI) since 2013 although it was owned by Albertsons. Chris Preli, general manager, and Kristan Lewis, conversion lead, briefed the vendors on the progress of the conversion process.
Beginning later this month, Preli confirmed that Acme headquarters in Malvern and the Lancaster DC will have aligned their in-house systems.
“This is very important,” said Lewis. “We now have one team operating on one set of systems. We own the inventory which allows us and you (vendors) better access to the procurement team. In our world, more capacity means better flow.”
During the past year, Acme has acquired a fluid milk plant (the old Rosenberger’s Dairy facility) and now has full control over all cross-dock functions when dealing with milk, eggs and cigarettes.
Preli noted that with ownership and oversight of the LDC, Acme now can better coordinate with Albertsons’ national accounting center in Phoenix. The longtime Acme executive also encouraged suppliers to join Albertsons’ “One Network” national appointment scheduling platform which he noted will provide much greater warehouse delivery efficiency.
Sherry Caldwell, director of marketing who has been with Acme since 2006 and at Albertsons for more than 25 years, provided an overview of several of the media and marketing programs the retailer is involved in. She emphasized the growth of Acme’s “Just for U” personalized loyalty platform which was unveiled five months ago and now includes nearly one million registrants.
Caldwell noted the versatility of the program, which offers digital coupons, its “Saturday Sampler” (clippable coupons than can be redeemed Saturday-Monday), digital demos (ideal for new product trials and “flash sale” offers (available for only one day). She added that those promotions have been well received by both consumers and vendors.
Also upgraded has been Acme’s social media presence where its Facebook, Instagram, Twitter and email blasts have all been enhanced. Caldwell also stated that no other retailer in the market has more local and community programs available. Acme maintains exclusive partnerships with the Philadelphia Eagles and the Philadelphia Union soccer team. Key community events include the Hunger Walk, Broad Street Run, Philadelphia Marathon and the XPN Music festival. Additionally, last year the Acme Foundation donated nearly $1 million to charitable programs.
The morning’s final speaker was Kim Gray, VP-marketing and merchandising for the 188-store chain.
Gray focused on the company’s “Just for U” loyalty program, noting that members of the program “spend more money in our stores; grow the company’s (overall) sales year-over-year; and are less likely to leave our program for a competitor.”
He substantiated that statement by revealing that Acme’s elite (best) shoppers maintain an 82 percent retention rate. Gray also called on the vendors in attendance to bring in their leadership teams, stressing the importance of top-to-top meetings. He pointed to meetings with Kraft/Heinz and Utz as examples where top-to-top conferences led to programs that resulted in increased sales.
In closing, Gray, who came to Acme in 2015 and has been with Albertsons for more than 30 years, concisely listed Acme’s goals: “It’s still about sales, sales, sales and we’re shooting for 5 percent ID sales. We will support those efforts by offering the types of prices and promotions designed to sell cases. We will also provide consistent store conditions and strong in-stock positions. Partner with us to reach our common goals,” he urged.
Not surprisingly, it was a very professional performance by the five presenters, all achieved in 90 efficient minutes.
Back at Albertsons’ headquarters in Boise, the transition to another CEO will begin shortly.
Jim Donald will join Cerberus Capital Management’s Leonard Laufer as board co-chairmen. Cerberus owns controlling interest in Albertsons and has made it clear that it wants to exit from its investment (originally made in 2016) by taking Albertsons public. The company’s longtime leader Robert Miller has been named chairman emeritus and will continue to serve as a member of the board of directors.
Donald, 65, rejoined Albertsons (his first stint at the company was from 1976-1991) in March 2018 to serve as president and COO of the company ahead of the anticipated merger with Rite Aid. When that deal collapsed, the board named the veteran retail executive as CEO in September. Prior to that, Donald served as chief executive of Extended Stay America, a large U.S.-based hotel chain, from 2012 to 2015. From 2009 to 2011, Donald was president and CEO of food and pharmacy retailer Haggen, Inc. From 2002-2008 he was with Starbucks, leading the company through a period of growth, working his way up from president of its North America division to president and CEO of the large Seattle, WA-based coffee chain. Donald also served as CEO of Pathmark Stores (1997-2002) and president of Safeway’s Eastern division (1994-1996, prior to Albertsons acquiring it) as well as helping to develop and expand the SuperCenter concept while at Walmart (1991-1994).
“When I joined Albertsons Companies in 2018, I found a company that had a strong decentralized operating model, a fantastic leadership team and incredible potential to be the four-walls and no-walls leader in the grocery industry,” said Donald. “Over the past year, our team made our company’s nearly 2,300 stores even stronger as we sharpened our focus on the intersection of technology and service. I’m looking forward to the continued progress of the company under the seasoned leadership of Vivek. We continue to be well-positioned to serve the evolving needs of today’s customer, where, how and when they choose to shop with us.”
Continued Donald, “Vivek brings a rare blend of CPG, retail, manufacturing, logistics, technology, and research and development to Albertsons Companies, all of which are key components to being a successful retailer in an omni channel-driven environment. Moreover, Vivek has the keen understanding that the front line is directly linked to the bottom line, and I’m confident he will inspire and engage our 270,000 associates across our stores, support offices, manufacturing facilities, and distribution centers.”
“It is a great privilege to join a company that has such deep roots in American retail,” said Sankaran. “Albertsons, Safeway, Vons, Jewel Osco, Shaw’s, Acme, Tom Thumb, Randall’s, United Supermarkets, Market Street, Pavilions, Star Market, Haggen and Carrs – all of these banners and more in the Albertsons Companies family of stores have hundreds of years of combined history. Our stores are integral to the lives of millions of customers each week. I’m excited to build on the legacies of past CEOs Bob Miller and Jim Donald who both laid a solid foundation for success and look forward to working with our associates to realize the opportunities and navigate the challenges in our evolving industry.”
“I’ve known Vivek for many years. He has always impressed me, not only with his exceptional work at Frito-Lay in managing the many facets of a multibillion-dollar food business, but also with his ability to work with and develop people,” said Miller. “I couldn’t be happier to leave Albertsons Companies in Vivek’s hands.”
In an internal memo from Donald (published at the end of this story) detailing his departure, he noted “the industry may think that we’re playing catch up with eCommerce, ‘Drive Up and Go,’ and third-party agreements, but when we look at the whole picture, we’re changing the game for customers in small, simple ways that I’m confident will add up to our being the company that everyone wants to catch up to in the next few years. I am excited about our progress and I look forward to what we’ll accomplish. Our commitment to ‘Making Every Day a Better Day’ for our people, customers, community and company remains our priority.”
Sankaran was named CEO of PepsiCo Foods North America in December 2018. Prior to that, he served as the company’s president and chief operating officer, a position he was named to in 2016. Over the last three years, he has led Frito Lay to industry-leading growth by remaining focused on innovation, technology and execution. Over his 10 year career at PepsiCo, in addition to leading Frito-Lay, Sankaran also served as the chief commercial officer for PepsiCo North America, chief customer officer of Frito Lay, and as the senior VP of strategy for PepsiCo.
Before joining PepsiCo in 2009, Sankaran was a partner at McKinsey and Company, where he served various Fortune 100 companies, bringing a strong focus on strategy and operations.
Sankaran has an MBA from the University of Michigan, a master’s degree in manufacturing from the Georgia Institute of Technology and a bachelor’s degree in mechanical engineering from the Indian Institute of Technology in Chennai.
Below is Donald’s internal memo:
To: Albertsons Companies Associates
From: Jim Donald
Subject: Albertsons Companies Appoints Vivek Sankaran President and CEO
When I joined Albertsons Companies in March of 2018, there were two paths in front of me waiting to play out: helping to shepherd the integration of a Rite Aid-Albertsons Companies combination into 2019 and beyond or helping further lead our already-solid company toward the future in both the four wall and no wall environment and tell our story more broadly. Just over a year later, we know which path the company took, and as I took on the role of overseeing the daily operation of our company, I also made finding my successor a high priority. When you look for a successor, you find someone who embraces your vision and then has the capacity to take it to a whole new level. This morning, we announced that Vivek Sankaran has been appointed president and chief executive officer of Albertsons Companies, effective April 25, 2019. With this change, I’m going to take on the role of co-chairman of the board. I’ll be serving alongside co-chairman Len Laufer, who was named to our board of directors last fall and is a senior managing director and head of transformation and technology for Cerberus Capital Management. Bob Miller, after 58 years in the industry, has been named chairman emeritus and will continue to serve as a member of the board of directors. Vivek was named CEO of PepsiCo Foods North America in December 2018. Prior to that, he served as the company’s president and chief operating officer, a position he was named to in 2016. Over the last 3 years, he has led Frito Lay to industry-leading growth by remaining focused on innovation, technology and execution. Over his ten-year career at PepsiCo, in addition to leading Frito-Lay, Vivek also served as the chief commercial officer for PepsiCo North America, chief customer officer of Frito Lay, and as the senior vice president of strategy for PepsiCo. Before joining PepsiCo in 2009, Vivek was a partner at McKinsey and Company, where he served various Fortune 100 companies bringing a strong focus on strategy and operations. He co-led the firm’s North American purchasing and supply management practice and was on the leadership team of the North American retail practice. Vivek has an MBA from the University of Michigan, a master’s degree in manufacturing from Georgia Institute of Technology and a bachelor’s degree in mechanical engineering from the Indian Institute of Technology in Chennai. My co-chairman Len Laufer leads Cerberus Technology Solutions, a subsidiary of Cerberus that is focused exclusively on leveraging emerging technology, data, and advanced analytics to drive business transformations. Len and his team of senior technologists work closely with Cerberus investment and operating professionals on targeted initiatives aimed at improving systems and generating value from data. I think we can all agree that he will be an invaluable add as co-chairman. I’m truly excited to see what our company does next. I’ve said it to our division presidents, our leadership team, and everyone who will listen that, simply put, the small moves we are making are adding up. The industry may think that we’re playing catch up with eCommerce, Drive Up and Go, and third-party agreements, but when we look at the whole picture, we’re changing the game for customers in small, simple ways that I’m confident will add up to our being the company that everyone wants to catch up to in the next few years. I am excited about our progress and I look forward to what we’ll accomplish. Our commitment to Making Every Day a Better Day for our people, customers, community and company remains our priority. With 270,00 talented associates serving 34 million customers each week across our nearly 2,300 stores and 5.5 million customers in our 1,700-plus pharmacies, we’re well positioned to serve the evolving food, health and wellness needs of today’s customer in our four wall/no wall company. Thank you for all you do every day to help our teams run great stores.