Ian McLeod out as Southeastern Grocers CEO

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Re: Ian McLeod out as Southeastern Grocers CEO

Post by cathandler »

I don't know McLeod from Adam, but whenever a turnaround expert with a history of success falters it might be more a function of SEG's problems being unfixable or Lone Star not giving him the resources needed to implement the plan.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by pseudo3d »

cathandler wrote:I don't know McLeod from Adam, but whenever a turnaround expert with a history of success falters it might be more a function of SEG's problems being unfixable or Lone Star not giving him the resources needed to implement the plan.
McLeod had zero experience with American stores, and I think he chose a poor way to market Winn-Dixie/BI-LO. Coles was in really bad shape--out of date equipment (the deli slicers were out of production, you couldn't get replacement parts easily) but he fought back against Woolworths effectively, whereas in Winn-Dixie/BI-LO, McLeod made a wrong turn from the start by not competing directly against Publix (the biggest threat) and instead of going for some halfway point between Aldi/Walmart and Publix.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by wnetmacman »

pseudo3d wrote:McLeod had zero experience with American stores, and I think he chose a poor way to market Winn-Dixie/BI-LO. Coles was in really bad shape--out of date equipment (the deli slicers were out of production, you couldn't get replacement parts easily) but he fought back against Woolworths effectively, whereas in Winn-Dixie/BI-LO, McLeod made a wrong turn from the start by not competing directly against Publix (the biggest threat) and instead of going for some halfway point between Aldi/Walmart and Publix.
I believe the reasoning for this was pretty solid: WD had no chance of reclaiming their good name in Florida against Publix. In the 50's-70's, WD was much bigger and had a lot more power against Publix, who was much smaller. As Publix moved forward and grew, WD stayed stagnant, completely underestimating what Publix was accomplishing until it was too late to fight. (Somewhat the way Kmart underestimated that bumpkin from Bentonville, but I digress)

I think McLeod had a good idea, but it was probably too late to try to get it done, and it wasn't happening fast enough for Lone Star Funds to recoup their investment. I don't see the two companies splitting (WD and Bi-Lo). I see massive closures. If not, they will continue blindly reformatting stores, hoping the customer will show up.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by architect »

wnetmacman wrote:
pseudo3d wrote:McLeod had zero experience with American stores, and I think he chose a poor way to market Winn-Dixie/BI-LO. Coles was in really bad shape--out of date equipment (the deli slicers were out of production, you couldn't get replacement parts easily) but he fought back against Woolworths effectively, whereas in Winn-Dixie/BI-LO, McLeod made a wrong turn from the start by not competing directly against Publix (the biggest threat) and instead of going for some halfway point between Aldi/Walmart and Publix.
I believe the reasoning for this was pretty solid: WD had no chance of reclaiming their good name in Florida against Publix. In the 50's-70's, WD was much bigger and had a lot more power against Publix, who was much smaller. As Publix moved forward and grew, WD stayed stagnant, completely underestimating what Publix was accomplishing until it was too late to fight. (Somewhat the way Kmart underestimated that bumpkin from Bentonville, but I digress)

I think McLeod had a good idea, but it was probably too late to try to get it done, and it wasn't happening fast enough for Lone Star Funds to recoup their investment. I don't see the two companies splitting (WD and Bi-Lo). I see massive closures. If not, they will continue blindly reformatting stores, hoping the customer will show up.
With Winn-Dixie, McLeod was honestly stuck in between a rock and a hard place. The banner can no longer effectively compete with Publix, as its reputation is far too tarnished while Publix has almost a cult like following. On the other hand, if he tried to skew the banner downscale, then he would be stepping directly into Walmart/Aldi territory, a battle which would be impossible to win. As strange as this sounds, i actually think that Bi-Lo may have more turnaround potential currently, as at least many of its stores are in small markets with much less competition. However, unless if a prospective buyer emerges for certain stores, I fully expect most of the SEG stores to go dark within a couple of years.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by Knight »

cathandler wrote:I don't know McLeod from Adam, but whenever a turnaround expert with a history of success falters it might be more a function of SEG's problems being unfixable or Lone Star not giving him the resources needed to implement the plan.
BI-LO's initiatives with its Super BI-LO stores in 2007 and store updates in 2010 and 2011 were short lived. McLeod's initiatives are not different.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by Knight »

pseudo3d wrote: McLeod had zero experience with American stores, and I think he chose a poor way to market Winn-Dixie/BI-LO. Coles was in really bad shape--out of date equipment (the deli slicers were out of production, you couldn't get replacement parts easily) but he fought back against Woolworths effectively, whereas in Winn-Dixie/BI-LO, McLeod made a wrong turn from the start by not competing directly against Publix (the biggest threat) and instead of going for some halfway point between Aldi/Walmart and Publix.
BI-LO has lost challenges to supermarkets Harris Teeter, Ingle's, Publix, and Walmart Neighborhood Market and hypermarkets Walmart Supercenter and SuperTarget. BI-LO stores that have received updates in recent years have not been game changers.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by Knight »

wnetmacman wrote: I think McLeod had a good idea, but it was probably too late to try to get it done, and it wasn't happening fast enough for Lone Star Funds to recoup their investment. I don't see the two companies splitting (WD and Bi-Lo). I see massive closures. If not, they will continue blindly reformatting stores, hoping the customer will show up.
McLeod's initiative was late indeed. I think there were also bad decisions made that limited the success of the initiative.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by Knight »

architect wrote: With Winn-Dixie, McLeod was honestly stuck in between a rock and a hard place. The banner can no longer effectively compete with Publix, as its reputation is far too tarnished while Publix has almost a cult like following. On the other hand, if he tried to skew the banner downscale, then he would be stepping directly into Walmart/Aldi territory, a battle which would be impossible to win. As strange as this sounds, i actually think that Bi-Lo may have more turnaround potential currently, as at least many of its stores are in small markets with much less competition. However, unless if a prospective buyer emerges for certain stores, I fully expect most of the SEG stores to go dark within a couple of years.
BI-LO's turnaround potential would be the closing of many stores with expiring leases and/or bad performers, departing markets where it has become irrelevant (Georgia, North Carolina), and the divestiture of a quantity of quality stores to another supermarket.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by pseudo3d »

wnetmacman wrote:
I believe the reasoning for this was pretty solid: WD had no chance of reclaiming their good name in Florida against Publix. In the 50's-70's, WD was much bigger and had a lot more power against Publix, who was much smaller. As Publix moved forward and grew, WD stayed stagnant, completely underestimating what Publix was accomplishing until it was too late to fight. (Somewhat the way Kmart underestimated that bumpkin from Bentonville, but I digress)

I think McLeod had a good idea, but it was probably too late to try to get it done, and it wasn't happening fast enough for Lone Star Funds to recoup their investment. I don't see the two companies splitting (WD and Bi-Lo). I see massive closures. If not, they will continue blindly reformatting stores, hoping the customer will show up.
They never can take on Publix if they don't try. Walmart is a big competitor too, but the companies that have faced it head-on, like Publix or Kroger, succeed. If all you can do is try to undercut Walmart, you'll lose like Kmart did preceding their 2002 bankruptcy.

Obviously Winn-Dixie becoming the empire it once was is unfeasible, but they could have stuck to their guns with their nicer remodels and improved operations as the 2005 bankruptcy becomes more of a distant memory. Effectively trimming their store base and remodeling the remaining stores would have at least made Winn-Dixie a more viable acquisition target.
Knight wrote: BI-LO has lost challenges to supermarkets Harris Teeter, Ingle's, Publix, and Walmart Neighborhood Market and hypermarkets Walmart Supercenter and SuperTarget. BI-LO stores that have received updates in recent years have not been game changers.
Trying to remodel stores, especially as an attempt to make the store not look like it was built 30 years ago is going to fail if you don't have properly operational stores.
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Re: Ian McLeod out as Southeastern Grocers CEO

Post by wnetmacman »

pseudo3d wrote:They never can take on Publix if they don't try. Walmart is a big competitor too, but the companies that have faced it head-on, like Publix or Kroger, succeed. If all you can do is try to undercut Walmart, you'll lose like Kmart did preceding their 2002 bankruptcy.

Obviously Winn-Dixie becoming the empire it once was is unfeasible, but they could have stuck to their guns with their nicer remodels and improved operations as the 2005 bankruptcy becomes more of a distant memory. Effectively trimming their store base and remodeling the remaining stores would have at least made Winn-Dixie a more viable acquisition target.

Trying to remodel stores, especially as an attempt to make the store not look like it was built 30 years ago is going to fail if you don't have properly operational stores.
The problem, at least as I've seen it, is that neither SEG or Lone Star Funds seem to want to invest in anything other than stores getting the FyM or Harvey's remodels. And those are only a few at a time; never more than 10. It's an easy, cheap remodel, but as you say, it isn't fixing the underlying management or staff issues.

SEG doesn't have the funds to battle Publix for these reasons. They can't fix a leaky cooler in one store, much less take on the leader in their home state. That's not even to think of Walmart. One of the stores that recently closed in Lafayette, LA held a big shindig on April 8, handing out dozens of gift cards, shopping bags, and demos, among other things. Today, June 27, that store is closed. It was too little, too late. That store was at one time the only supermarket in this part of town. When competition came, especially the Walmart that opened on April 5, they didn't meet it with an attempt, it was met with failure.
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