MINNEAPOLIS — Struggling food and drug retailer Supervalu Inc. has named chairman Wayne Sales as chief executive officer, replacing Craig Herkert.
Supervalu said Monday that Sales, 62, will continue to serve as chairman and that board member Philip Francis has been elected lead director.
"In my new role, I will work closely with our leadership team to improve our sales and earnings trajectory and generate long-term shareholder value, focusing relentlessly on identifying factors that will drive meaningful improvements in our strategy execution and overall performance," Sales said in a statement.
The leadership change comes a couple of weeks after Supervalu reported poor sales and earnings results for its fiscal 2013 first quarter ended June 16. The company also unveiled an action plan to spur customer traffic, offer more competitive pricing and promotions, and pare costs. In addition, the company suspended its dividend and announced plans to accelerate debt reduction, refinance debt and scale back capital expenditures.
Supervalu is the nation’s third-largest supermarket operator, with 2,437 stores, including 1,101 traditional supermarkerts and 1,336 Save-A-Lot hard discount stores. Its grocery wholesale business serves 1,950 independent supermarkets. Supervalu’s total sales for fiscal 2012 ended Feb. 25 were $36.1 billion, down 3.8% year over year.
In addition, Supervalu is one of the nation’s biggest retail pharmacy operators, with 798 supermarket pharmacies and fiscal 2012 pharmacy sales of $2.35 billion, down 1.6% from a year ago.
"We will take significant cost out of the business and move with urgency in our retail food business to lower prices and create points of sustainable differentiation for our customers," Sales stated Monday. "We will work closely and collaboratively with independent retailers to ensure that they continue to receive the superior service they need to increase sales and profitability. We will strengthen our engagement with our Save-A-Lot licensees — leveraging their expertise, enhancing our collective performance and ensuring our ability to grow a nationwide network of hard discount stores. As we execute our business plan, the board will continue its review of strategic alternatives, and I am still leading that process.”
Herkert joined Supervalu as CEO in May 2009 from Walmart, where he was president and CEO of the Americas unit since 2004. He took the chief executive reins from Jeff Noddle, who remained chairman until June 2010, when he retired.
"On behalf of the entire board, I would like to thank Craig for his efforts and wish him well as he pursues new opportunities," Sales commented.
A Supervalu director since 2006 and nonexecutive chairman since 2010, Sales is the retired vice chairman of Canadian Tire Corp., a leading general-merchandise chain in Canada. He served as Canadian Tire’s president and CEO from 2000 to 2006. Before joining Canadian Tire in 1991, he served in several senior leadership positions with the U.S. division of Kmart Corp. in the areas of marketing, merchandising and store operations.
