Technology and executive changes highlight the biggest stories of 2018 in the West grocery business. Here are the top 10 we chose.
1. First Amazon Go opens in Seattle, more now open
On Jan. 22 this year, Amazon opened its first Amazon Go, a checkout-line-free store that uses computer vision, deep learning algorithms and sensor fusion to allow Amazon customers to go into the store, pick up what they want and leave the store. Amazon calls it “Just Walk Out Technology.” To shop in the store, one needs an Amazon account; the free Amazon Go app; and a recent-generation iPhone or Android phone.
The shopper scans his or her app to enter the 1,800-s.f. store; that’s the only time the smartphone is needed during the shopping process. As the shopper puts items in a cart or bag, they are added to a virtual cart. If an item is returned to the shelf, it is automatically deducted. When the shopper leaves the store, his or her Amazon account is charged, and the receipt is sent to the app.
Since that store opened at 2131 7th Avenue in Seattle, several more have opened. Two are in Seattle (one on 5th Avenue and one on Boren Avenue); two are in Chicago (one on South Franklin Street and one on South Clark Street); and one is in San Francisco (at California Street and Battery Street). Two more Chicago stores are planned; one on West Madison at Ogilvie Transport Center and one on East Wacker at the Illinois Center. Another San Francisco store is planned for at 98 Post Street (Post and Kearny).
2. Kroger’s 1st African-American div. president named
Monica Garnes became president of Kroger’s Fry’s Division in Tolleson, Arizona, on Feb. 5, becoming the first African-American division leader in the grocer’s history.
Garnes succeeded Steve McKinney, who was promoted to SVP of retail divisions for Cincinnati-based Kroger. Garnes left her position as corporate VP of produce-floral merchandising to take the reins at Fry’s, which has approximately 123 stores and more than 22,000 associates.
Garnes launched her career with Kroger in 1995 when she joined the management training program in the Columbus, Ohio, division. She was promoted to VP of merchandising for the Fry’s division in 2013 and named to her current role in 2015.
Kroger’s Ralphs division in Southern California also got a new president as of Sept. 1, following Valerie Jabbar’s promotion to headquarters as group VP of merchandising. Mike Murphy, formerly VP of operations for Kroger’s Columbus, Ohio, division, succeeded Jabbar as president of the Ralphs division in Compton, which includes approximately 191 stores in Southern California.
Murphy joined Kroger in 1999 as an accountant in the company’s auditing department in Cincinnati. Jabbar began her Kroger career in 1987 as a clerk in the Fry’s division in Arizona. She had served as Ralphs president since July 2016.
3. UNFI acquires Supervalu
In a deal that affects the entire U.S., United Natural Foods Inc. (UNFI) in October finalized its acquisition of Supervalu in a deal worth about $2.9 billion. The deal first was announced July 26.
Providence, Rhode Island-based UNFI, a natural and organic products distributor, gained access to a full line of mainstream grocery items, an expanded customer base and exposure across channels; Minneapolis-based Supervalu says the combination should be a boon to shareholders and be beneficial for its wholesale customers, thanks to UNFI’s products.
Sean Griffin, previously UNFI COO, serves as CEO of Supervalu and head of the integration committee. Reporting to Griffin are former Supervalu executives Anne Dament, EVP-retail, marketing and private brands, and Mike Stigers, EVP-wholesale, who will support the Supervalu business operations.
An update on the integration efforts will be presented Jan. 16, 2019, on UNFI’s investor day.
4. El Super, Fiesta Mart create Hispanic ‘powerhouse’
Bodega Latina Corp., whose Hispanic-focused U.S. stores operate under the name El Super, acquired Fiesta Mart LLC, a Texas-based international food retailer with an emphasis on the Hispanic segment.
The combination of Bodega Latina and Fiesta created one of the largest Hispanic-focused supermarket companies in the U.S.—122 stores in California, Arizona, Nevada, New Mexico and Texas and revenues of about $3 billion.
More than half of the fast-growing U.S. Hispanic population resides within the five states in which the combined company operates.
Headquartered in Paramount, California, El Super operates 59 stores in 13 counties in California, Arizona, Nevada, New Mexico and Texas.
Fiesta, a portfolio company of ACON Investments, operates 63 stores primarily in the Dallas and Houston, Texas, areas. The stores continue to operate under their own banner.
Bodega Latina opened its first El Super store in South Gate, California, in 1997. Fiesta Mart was co-founded by Donald Bonham and O.C. Mendenhall in Houston in 1972.
Carlos Smith, president and CEO of Bodega Latina, a subsidiary of Mexico-based Grupo Comercial Chedraui, said, “The acquisition of Fiesta allows us to meaningfully expand into Texas via an established, well-known supermarket operator…We look forward to welcoming Fiesta’s talented employees and working together to create the premier Hispanic grocery retailer.”
5. WinCo names new prez, future CEO
The board of directors of WinCo Foods said April 30 that it had appointed Grant Haag, SVP of department operations, as president. Haag, a 34-year WinCo veteran, will serve as president for a year before taking over as CEO when current CEO Steven Goddard officially steps down.
Goddard said, “We firmly believe that Grant is the right choice to lead the company into the future.”
Employee-owned WinCo operates more than 120 stores in Arizona, California, Idaho, Nevada, Oklahoma, Oregon, Texas, Utah and Washington. Earlier this year it was hiring for a new store in Oregon City, Oregon. At press time, it was hiring for a new store in Oceanside, California.
6. Raley’s new execs, store format
In late September, Raley’s promoted Keith Knopf to president and CEO. He formerly served as president and COO. He joined the company in 2015 as COO and expanded his role to president more than a year ago. Michael Teel, owner of Raley’s, continues as chairman of the board (see expanded story on page 8 of this issue).
In March, the West Sacramento-based family-owned chain with 125 stores in Northern California and Nevada, had promoted two leaders: Kevin Konkel to the newly created chief operations officer role, and Paul Gianetto to SVP of sales and merchandising.
Konkel, who has been with Raley’s for nearly 40 years, previously served as SVP of operations. In his new role as COO, he leads operations in all Raley’s banners and pharmacy operations as well as store design and construction, operations administration, distribution and asset protection.
Gianetto, who has more than 35 years of industry experience and joined Raley’s in 2008, formerly served as VP of center store. As SVP of sales and merchandising, he manages strategic pricing, private label and sales and merchandising for both center store and perishable departments.
Raley’s also opened a brand-new banner this year, Market 5-ONE-5, located in the historic R Street District in downtown Sacramento, California. The store opened May 15; the ONE part of the name stands for Organic, Nutrition and Education.
Teel said at the time, “Market 5-ONE-5, and what it stands for, has been a vision of ours for a long time. Its purpose is to offer our community access to fresh, nutritious and affordable food. Its mission is to help people live healthy, vital lives by taking the guesswork out of understanding nutrition.”
The store carries minimally processed, organic and sustainably sourced products that are “free of unrecognizable ingredients not found in nature.”
7. Donald succeeds Miller in CEO role at Albertsons Cos.
Boise, Idaho-based Albertsons Cos. appointed Jim Donald, president and COO, as president and CEO, effective Sept. 12. Robert “Bob” Miller, formerly chairman and CEO, continues as the chairman of the board (see more on Albertsons and Bob Miller in the special section in this issue).
Donald began his 47-year retail career as a trainee in Florida with Publix. He joined Albertsons in 1976, which culminated in his being appointed VP of operations in Arizona. In 1991, he was recruited personally by Sam Walton to join Walmart to lead the development of its grocery business and superstore concept. Donald subsequently left for Safeway in 1994 to be the SVP of its 130-store Eastern region, a position he held for two years. His first CEO role was at Pathmark Stores from 1996 through 2002, followed by his most well-known appointment as president and CEO at Starbucks. Post-Starbucks, Donald served as CEO for two other companies, Haggen and Extended Stay America Inc. Donald joined Albertsons as president and COO in March.
8. New president at Stater Bros. Markets
Stater Bros. Markets promoted George Frahm to president on Jan. 15.
Frahm reports to Stater Bros. CEO Pete Van Helden, whom he succeeded in the president’s role. Van Helden had served as president and COO since 2013 and became CEO in 2016 when Jack H. Brown passed away.
“George is a remarkable leader who embodies the spirit of the Stater Bros. ‘family,’” said Van Helden.
Frahm started his grocery career in 1973 at the Stater Bros. supermarket in Glendora as a clerk’s helper and janitor. He progressed through retail store and district supervision roles, serving as EVP administration/distribution prior to his promotion.
9. Washington grocer honored with IGA’s J. Frank Grimes Award
Created in honor of IGA’s founder, the J. Frank Grimes awards are bestowed at the chairman’s discretion to those who are driven to work beyond their own needs and desires to achieve goals benefiting the IGA brand. At the IGA Awards of Excellence Brunch on Feb. 11 during the IGA Global Rally, one of those awards was presented to Archie McGregor II of McGregor Supermarkets in Pullman, Washington, operating Dissmore’s IGA. McGregor also is former chairman of IGA’s National Retailer Advisory Board. He just stepped down from that role, which he had held for many years, late last year.
IGA said McGregor received the Grimes award for his “inspiring leadership and passionate commitment to the IGA brand and the retailers and communities it serves.”
“From working side by side with his father at their family’s IGA, to buying his own IGA, bringing his sons into the fold and guiding IGA’s National Retailer Advisory Board for more than a decade, Archie McGregor is the true embodiment of Hometown Proud. After more than 60 years of service to his community, his fellow retailers and his brand, Archie’s respect, focus and care have left an indelible mark on IGA,” said IGA Chairman Mark Batenic.
McGregor’s father founded the grocery company more than 50 years ago, and Archie II was able to work with him for about 25 of those years.
10. New master’s degree developed for food industry execs
The Marshall School of Business at USC launched a new online degree—the master of science, food industry leadership (MS.FIL)—that is designed for current and future food industry executives.
Discussions with senior-level Food Industry Management (FIM) program alumni and the Western Association of Food Chains (WAFC) led to the creation of the new graduate-level degree. Candidates will get “relevant and innovative industry management skills and cultivate leadership abilities.”
While primarily an online program, the 16-month degree also includes four on-campus residential events.
Courses will cover the most up-to-date practices in team building, problem solving, critical thinking and advanced decision-making to facilitate the assessment and resolution of key business issues.
The estate of Byron Allumbaugh, former president of Ralphs Grocery Co., made a $1 million gift to the FIM Program, establishing the Byron Allumbaugh Food Industry Leadership Scholarship, a full scholarship that will be awarded each year to one outstanding FIM alumni accepted to the MS.FIL. Allumbaugh spent 39 years with Ralphs, including nearly 20 years as chairman and CEO before his retirement.
Recruitment for the MIS.FIL has begun for January 2019.