Dive Brief:
- Jim Perkins, who currently holds the position of Albertsons executive vice president of retail operations and special projects as well as president of its Acme stores division, is now adding president of Safeway Eastern division to his title, according to Supermarket News.
- Perkins is the third person to hold the top post of Safeway’s Eastern division in 13 months. He takes over for Dan Valenzuela, who according to an Albertsons spokeswoman, has "left the company to pursue other opportunities," reports Food Trade News.
- This now puts Perkins in charge of nearly 300 east coast stores under the Acme (176 units) and Safeway (120) banners. Acme stores are located in the six-state area spanning Connecticut, Delaware, Maryland, New Jersey, New York and Pennsylvania, while Safeway stores are in Delaware, Maryland, Pennsylvania, Virginia and Washington, D.C.
Dive Insight:
It’s been almost three years since Albertsons and Safeway combined forces in a $9.2 billion deal in what some analysts projected could form another national grocery chain capable of competing with the likes of Walmart and Kroger. But under ownership of equity firm Cerberus Capital Management, the retailer instead has continued to operate like a holding company of many divisions rather than an integrated whole. The company has failed to reap many of the operational synergies that could have helped it more successfully compete.
This management changeover could present a good time to consider consolidating east coast operations. But, Perkins would have his work cut out. One challenge is that Safeway is supplied by C&S Wholesale Grocers while Acme self-distributes. In contrast to how a pre-acquisition Safeway was run, the merchandising function is now decentralized. Albertsons put responsibility for merchandising and pricing decisions in the hands of Safeway store managers and local merchandising teams, something they weren't entirely accustomed to handling.
On top of operational issues, the many Albertsons and Safeway banners across the nation face similar problems as do many “middle-of-the-road” grocers — they lack any identifiable USP (unique selling proposition). They don’t really stand as a low-price operator, premium positioning, a unique/local selection, stellar customer service or any of the other distinguishing factors that could differentiate a chain. Performance continues to struggle. Comparable store sales declined 0.4% in the company’s latest quarter.
Added to this, the retailer faces what some would consider an insurmountable level of competition. Among the grocers whose geographic area overlaps with Safeway Eastern: Ahold-Delhaize-owned Giant Food, Aldi, Kroger’s Harris Teeter, Supervalu’s Shoppers Food & Pharmacy, ShopRite, Trader Joe’s, Wegmans and Amazon's Whole Foods. Sprouts Farmers Market plans to open a store soon in Baltimore. It’s anticipated that Lidl, which opened its initial stores in Richmond, Virginia, will increasingly penetrate the eastern seaboard as well.
"I’ve been especially concerned with the condition of our stores, both physically and morale-wise," a Safeway Eastern executive told Food Trade News. "I’m confident that’s going to change quickly. Jim knows the business, understands the market and connects with people on a very positive level. We need that here.”
This year alone, Albertsons has tried unsuccessfully to expand its presence in the organic and natural food space to place it in a position of growth to impress potential investors. First, it attempted to snap up Sprouts Farmers Market. Most recently, it offered to buy Whole Foods, but its offer was passed over for that of Amazon.
As a 30-year grocery industry veteran, Perkins has impressive credentials working his way up from an Albertsons courtesy clerk to the executive ranks. He's worked in several areas of the country, but he knows the East Coast region well. He briefly left the chain to serve a stint as Giant Foods' regional vice president, but returned as Acme president in 2012 and was named executive vice president of operations, East Region in 2015. He also played an integral role recently in converting and integrating 76 A&P stores that Albertsons bought out of bankruptcy.
Under Perkins tutelage, Albertsons may have finally found the right person to turn around its East Coast business. The move could possibly even set in motion some much needed operational integration, with the potential for some consolidation.