Kroger CFO Leaving for another public company

[pseudo3d]

I also expect any hint of Alibaba buying Albertsons and certain states Albertsons operates in will pass laws prohibiting foreign ownership of retail supermarkets somehow (this may be an issue for some other operators...)... not sure how specific they could make it to target China. Some states did this after Smithfield was bought- making it illegal for these foreign interests to purchase any additional farmland in their states.

Are we forgetting the entirety of Ahold Delhaize?

[ClownLoach]

And Costco Culture will continue to erode.

The CFO is pretty much just the money person. They're interchangeable for the most part, especially in retail settings. The job that has the least impact on operations. The COO and CEO are the ones that change culture. They just have to ask the CFO if there's enough money to make the changes first. The CFO is never a change leader, and they spend most of their time dealing with the external side of the business.

Generally, the larger the company the larger the compensation. I'm sure he was expecting a big raise once the merger went through and he would have stayed on. I think this is a strong indication that Kroger is not as optimistic as they once were about the merger going through. No merger, likely no raise. So he saw an opening elsewhere and took it.

To me this is a larger statement about Kroger than Costco. Kroger is in question because nobody knows what their vision is if the merger doesn’t happen. There doesn't seem to be a "Plan B" that has been communicated publicly, and as the CFO he would know and probably doesn't like what is coming down the road. Meanwhile the Costco financial model is very set in its ways and a proven success. Most of the profit comes from membership sales. There is no reason to make big changes because things work well as they are, and frankly there aren't any costs to cut because of the fact that they run the lowest payroll in all of retail at Costco. Their PR people deserve medals for whatever they've done to make the vast majority of the public believe that they are a high paying company (and a union company - so many believe they're all union when it's less than 5% of the stores). Although their wage rate is better than industry average they squeeze far more productivity out of their people than anyone else, which nets to a very low overall payroll. The CFO of Costco is probably the easiest C-suite job in the retail industry and he's lucky to get it. He can just coast for the rest of his career and retire in a few decades with a fortune in the bank.

[CalItalian]

Is either company in financial trouble? Both of those seem like at odds with each other. The big question is what happens to Albertsons.

In 2018, some Forbes analysts talked about the idea that Alibaba should buy Albertsons. I don’t see that happening considering the US government would not approve of a Chinese company buying a US retailer, no matter what party is in charge.

I don't think they would have the funding to do it at this point. However I think the US Government would probably allow it. There would be a lot of fighting but ultimately it would be allowed to happen.

Smithfield is the largest US pork producer and it was acquired by a company from China in 2013- there was a lot of fighting but it was allowed to happen. The political climate in 2013 wasn't terribly different from now, some different players but same old infighting. The ownership group is actually looking to IPO it again... they've managed it well.

Objectively speaking these companies from China... are actually pretty smart businesspeople. I'd rather see companies stay US owned obviously... but Smithfield has worked out fine.

I also expect any hint of Alibaba buying Albertsons and certain states Albertsons operates in will pass laws prohibiting foreign ownership of retail supermarkets somehow (this may be an issue for some other operators...)... not sure how specific they could make it to target China. Some states did this after Smithfield was bought- making it illegal for these foreign interests to purchase any additional farmland in their states.

Zero possiblity that the U.S. government would allow China to buy Albertsons no matter which side is in power. This isn't the days of the Smithfield purchase anymore. And Smithfield is no great company today. Not that it is going to occur with the way China's financial markets have been imploding this year.

[storewanderer]

I also expect any hint of Alibaba buying Albertsons and certain states Albertsons operates in will pass laws prohibiting foreign ownership of retail supermarkets somehow (this may be an issue for some other operators...)... not sure how specific they could make it to target China. Some states did this after Smithfield was bought- making it illegal for these foreign interests to purchase any additional farmland in their states.

Are we forgetting the entirety of Ahold Delhaize?

That ship sailed.

They didn't even get in on the divests.

How are they really doing in the US anyway? Are they even in a position to expand? I am not so sure... Their operations are rather uneven and poorly integrated. How would they approach the integration issue of Safeway? Do they keep it separate, throw it under the Ahold systems/merchandising plan, throw it under the Hannaford systems/plan, or what? I won't even suggest any integration with Food Lion because there is no way they'd be dumb enough to do that, well, maybe Food Lion type of format would be a good fit for some parts of Denver Division of Safeway given how low traffic many of those are.

[pseudo3d]

I also expect any hint of Alibaba buying Albertsons and certain states Albertsons operates in will pass laws prohibiting foreign ownership of retail supermarkets somehow (this may be an issue for some other operators...)... not sure how specific they could make it to target China. Some states did this after Smithfield was bought- making it illegal for these foreign interests to purchase any additional farmland in their states.

Are we forgetting the entirety of Ahold Delhaize?

That ship sailed.

They didn't even get in on the divests.

How are they really doing in the US anyway? Are they even in a position to expand? I am not so sure... Their operations are rather uneven and poorly integrated. How would they approach the integration issue of Safeway? Do they keep it separate, throw it under the Ahold systems/merchandising plan, throw it under the Hannaford systems/plan, or what? I won't even suggest any integration with Food Lion because there is no way they'd be dumb enough to do that, well, maybe Food Lion type of format would be a good fit for some parts of Denver Division of Safeway given how low traffic many of those are.

My point is as unlikely as a Chinese company with no interest in operations like American supermarkets buying Albertsons is, there isn't anything about foreign ownership of supermarket chains.

Royal Ahold, Delhaize, J. Sainsbury (Shaw's), Steinberg (Smitty's-MO), Aldi Nord (Trader Joe's), and probably others have all acquired American chains.

[jamcool]

Steinberg bough Smitty's of Arizona..and subsequently went bankrupt. Smitty's of Missouri was a licensing deal, its management originally worked at Smitty's/AZ and brought the superstore concept there.

[pseudo3d]

Steinberg bough Smitty's of Arizona..and subsequently went bankrupt. Smitty's of Missouri was a licensing deal, its management originally worked at Smitty's/AZ and brought the superstore concept there.

Yes, I meant Smitty's-AZ, hadn't had my coffee yet.