Interview with Bob Miller

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pseudo3d
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Interview with Bob Miller

Post by pseudo3d »

http://www.idahostatesman.com/news/busi ... 53498.html

They recently interviewed Bob Miller, CEO of Albertsons, and while it feels like a puff piece, there are some interesting tidbits in there:

- Miller talks about the decentralized model, which still seems like a lot of talk at this point, but to be honest, I think the "decentralization" is probably not working well with the company partly because so much of Safeway infecting middle management.
- Miller thinks Warren McCain was the last "good" CEO before things started to go wrong, and let's be honest, he's right. McCain left in 1991, and that was EXACTLY the moment where things started to go wrong with rapid expansion culminating in the American Stores acquisition and all the fallout that followed.
- Miller gives more detail about the flagship store in Meridian. "It’s 100,000 square feet. We’re going to have everything you would find in a traditional Albertsons, plus much more variety in fresh [food]. We’ll have most of the things you’ll find at Whole Foods. A great pharmacy. A great sit-down area with lots of prepared food. Probably a wine bar. And the variety will be unbelievable in the fresh." (As Albertsons still seems reluctant to even go to 60k square feet, this is perhaps the most interesting part of the article)
- Miller talks about acquiring more "small, regional companies", but cites United as an example (and not one-offs like Paul's or G&G). The problem is that when you consider chains where Albertsons has weak or no presence, that aren't owned by Kroger, aren't strong regional retailers with no desire to sell (Publix, H-E-B, Rouses, Giant Eagle, etc.), and wouldn't need a lot of work (SEG would be a fixer-upper, let's put it that way) that number is diminishingly small.
- Miller mentions how very little was done to United, but some questions are still raised, like the recent decline in United and Market Street, and how United's costs were lowered due to buying scale (when a few stores switched over to United last year, prices dropped significantly on United's side, and the whole "Safeway can lower costs due to buying scale" has yet to see a real result in stores, if ever).
- Miller talks about home delivery and what Amazon will do to Whole Foods, no mention of Albertsons' plan for WFM had things gone differently.
- Miller talks about $60 billion in sales but doesn't mention the fact that the chain is still losing money or its failed attempts at an IPO. He mentions "building 18 new stores this year", not sure "18 stores in the next 12 months" or "18 stores within December" or "18 stores including the ones since January 2017", or if that includes acquisitions.
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Re: Interview with Bob Miller

Post by klkla »

It's a pretty interesting interview. I didn't know that much about him and never realized he had been with Albertson's for so many years. It's funny that he started his career sorting bottles. I had to do that a couple times at Mayfair when I was in High School. It was really nasty. Rats used to make their nests in those crates.

I found this quote interesting "I don’t like to mention names, but one of their CEOs, he really did a poor job of running good stores. Starting to centralize. And it was very screwed up when we got the stores back." I'm pretty sure he was referring to Larry Johnston. He came from General Electric in 2001 and knew NOTHING about running grocery stores. Literally ran the company into the ground IMO.
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Re: Interview with Bob Miller

Post by storewanderer »

I have always thought Bob Miller was very good from the time he was at Rite Aid. I was too young to really analyze when he was at Fred Meyer.

This is a great article and does a good job highlighting how Bob Miller has gotten to this point and how he sees things.

The decentralizing worked great for the old LLC Stores (even if they fell to 200 stores at one point, they ran their stores really well) and it seems like it also helped the former Supervalu operations.

Based on what I see recently, on the west coast at least (trying to forget Florida), I feel like the entire operation is becoming "Safewayized." Meaning, highly rigid, slow moving, and centralized. Between banner changes (always to the Safeway banner...), private label changes, implementation of Just for You program in Albertsons Stores, systems changes... I do not believe this is the best thing or the right thing to do, but they seem to be doing it for some reason.

I do not think the way Bob Miller sees things, is what is going on at Safeway currently.
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Re: Interview with Bob Miller

Post by pseudo3d »

storewanderer wrote:I have always thought Bob Miller was very good from the time he was at Rite Aid. I was too young to really analyze when he was at Fred Meyer.

This is a great article and does a good job highlighting how Bob Miller has gotten to this point and how he sees things.

The decentralizing worked great for the old LLC Stores (even if they fell to 200 stores at one point, they ran their stores really well) and it seems like it also helped the former Supervalu operations.

Based on what I see recently, on the west coast at least (trying to forget Florida), I feel like the entire operation is becoming "Safewayized." Meaning, highly rigid, slow moving, and centralized. Between banner changes (always to the Safeway banner...), private label changes, implementation of Just for You program in Albertsons Stores, systems changes... I do not believe this is the best thing or the right thing to do, but they seem to be doing it for some reason.

I do not think the way Bob Miller sees things, is what is going on at Safeway currently.
My main concern is that to Miller, all the divisions are relatively de-centralized but is unaware of the middle management making decisions that are causing store conditions to go downhill. Long checkout lines, apathetic employees, overpriced and confusing store brands, and a broken "rewards" system are all apparent if you spent much time in any store. Maybe the stores in Boise are actually fantastic and those problems aren't there or are not severe, but a lot of the divisions aren't doing as nearly as well as Miller imagines.

The banner changes do seem to heavily favor Safeway, but looking closer, those were in the Seattle division (a Safeway leftover, plus the Northwest division wasn't doing so well under SuperValu) and the Denver division (again, directly Safeway). Las Vegas, notably, hasn't directly converted Vons, but it reopened a Vons-turned-Haggen as an Albertsons, and opened an Albertsons that was supposed to be a Vons, so I don't know. The big problem with "only on the West Coast" is that's where Albertsons is primarily located too, as the Albertsons stores in the middle of the country (basically Texas and Louisiana heading north) have largely died out.
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Re: Interview with Bob Miller

Post by wnetmacman »

He claimed decentralization, but then made each district larger when they merged with Safeway, thus putting the same folks over a larger group of stores. At least in my local stores, they are named Albertsons, but are currently that in name only, because Randalls took over distribution and management for everything along I-10 in Louisiana. It hasn't been for the better.
pseudo3d wrote:My main concern is that to Miller, all the divisions are relatively de-centralized but is unaware of the middle management making decisions that are causing store conditions to go downhill. Long checkout lines, apathetic employees, overpriced and confusing store brands, and a broken "rewards" system are all apparent if you spent much time in any store. Maybe the stores in Boise are actually fantastic and those problems aren't there or are not severe, but a lot of the divisions aren't doing as nearly as well as Miller imagines.
Sometimes you can't see the field for the trees, and I think he may be looking at the wrong field.
pseudo3d wrote:- Miller gives more detail about the flagship store in Meridian. "It’s 100,000 square feet. We’re going to have everything you would find in a traditional Albertsons, plus much more variety in fresh [food]. We’ll have most of the things you’ll find at Whole Foods. A great pharmacy. A great sit-down area with lots of prepared food. Probably a wine bar. And the variety will be unbelievable in the fresh." (As Albertsons still seems reluctant to even go to 60k square feet, this is perhaps the most interesting part of the article)
Sounds like a Kroger Marketplace to me.
pseudo3d wrote:- Miller talks about $60 billion in sales but doesn't mention the fact that the chain is still losing money or its failed attempts at an IPO. He mentions "building 18 new stores this year", not sure "18 stores in the next 12 months" or "18 stores within December" or "18 stores including the ones since January 2017", or if that includes acquisitions.
They are indeed still losing money. Not unusual in a large acquisition such as these were (LLC+NA, then LLC+SWY). Typically, when a CEO says 18 new stores this year, they are referring to their fiscal year. Because the LLC is still a private company, it's difficult to find that info online, though I see they're having a conference call on 7/31 for the first quarter earnings, which probably ended 6/30, so that means their fiscal year would probably be from April 1-March 31.
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Re: Interview with Bob Miller

Post by pseudo3d »

wnetmacman wrote:He claimed decentralization, but then made each district larger when they merged with Safeway, thus putting the same folks over a larger group of stores. At least in my local stores, they are named Albertsons, but are currently that in name only, because Randalls took over distribution and management for everything along I-10 in Louisiana. It hasn't been for the better.
The number of divisions increased after the merger, and while I'm not sure of the exact numbers, I think the South division pre-Safeway was about as large since it included the Albertsons stores in Dallas-Fort Worth and the few in Florida. After the merger, the Colorado stores went to Safeway's Denver division, and the Northwest division was broken up into the divisions of Portland and Seattle of Safeway. The only division that ended up with truly a bunch of stores was SoCal (I think they have what, 300, 400 stores?). The Houston division was actually one of the smaller ones.

The problem with the new Houston division was that it was a great idea on paper, putting the DC closer to the stores (the SuperValu warehouse that the stores were previously being supplied at WAS farther away) as well as bringing Louisiana back into the Houston division as they were prior to 2002 and it might have worked had it not been operated by the reorganized Texas Division which had pretty bad management and was next on the chopping block anyway.

Sometimes you can't see the field for the trees, and I think he may be looking at the wrong field.
It's "forest for the trees" but I know what you mean. ;)
Sounds like a Kroger Marketplace to me.
Kroger Marketplace stores usually are over 100k square feet but more importantly offer an abbreviated general merchandise mix from Fred Meyer. It's unlikely Albertsons will carry clothing or electronics, though 100k square feet is still a lot to play around with...
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