retail news in context, analysis with attitude

We continue to get reaction to Friday’s story about Supervalu’s announcement that Bill Shaner, a 27-year company veteran who has been running its Save-A-Lot division since 2006, is leaving the company, to be replaced by Santiago Roces, most recently a senior vice president and general manager at Walmart. Craig Herkert, the Supervalu CEO who engineered the change, also is a former Walmart executive.

One MNB user wrote:

I'm not exactly sure where to start on this subject.  I find it very interesting to see the reactions/responses to this Save-a-Lot leadership change.  It seems to be quite harsh and at least in some aspects somewhat over reactive.   This kind of change happens all the time in today’s corporate world.  I would have never guessed so many people thought the complete success of this company was solely in the hands of Bill Shaner.  What I think is this change has hit a personal nerve with a lot of people in Save-a-Lot.

I’ve been in the grocery store business for over 20 years and I’ve been involved in this type of fundamental management change in an existing company more than once.   Save-a-Lot has been the one area of Supervalu that was, until about 2 years ago, left unchanged.  As a wholly owned subsidiary of Supervalu, Save-a-Lot was allowed to go about their business as they have for the last 15+ years.  Then the decision to expand was made and everyone’s eyes were on this ball!  New people were brought into the existing business and what was once a company that was operated and managed much like a family owned business was starting to resemble a more prototypical corporate entity.  I know from personal experience many of the long time Save-a Lot associates (at all levels) resent the “interference” from the parent company and the infusion of new people from the outside whether it be from Supervalu or Wal-mart.

In the past, everything went through the St. Louis corporate office.  All decisions, all marketing strategies, billings, invoicing, etc.  Now, Supervalu needed people all over the country/company working on the expansion plans for Save-a-Lot if they were expected to make it work.   The Save-a-Lot head quarters team, the Sr. VPs & general associates started to feel the business slip out of their “control” and into a  to a much broader array of personnel.  It has taken a lot of people out of their comfort zone.  I think this move was the coup de gras for the way it was at Save-a-Lot and the definitive start to the way it’s going to be. 

Bill Shaner is a good man and had a good grasp of the Save-a-Lot business model.  I believe he did a very good job during his tenure at Save-a-Lot but, I'm going to speculate this is more than a “desperate move” by Craig Herkert to save his job.  I suppose we’ll have to see what happens in the next 1-2 years to see if this was a good move.

PS - I find it interesting that everyone refers to Craig Herkert as a “Wal-mart Guy” when he actually spend 23 years with Albertsons and American Stores. His first job was actually at Jewel-Osco as a teenager and held positions including president of ACME MARKETS and executive vice president of Marketing during that time.


Another MNB user wrote:

As a long time SV employee who remembers the good days, I would like to weigh in on the current situation. 

I am not defending anyone, but Bill Shaner was no Saint.  Many good people have met the same fate at his hands as he met at the hands of Herkert.

Many of your observations are correct.  Herkert never has explanations for his actions, even to the SV employee base.  He has been in place for nearly two years, and if he has a plan for our company, the rank and file have no idea what it is.  Like store sales continue to fall, most Banners are losing market share in primary markets, every down-turn results in more job losses yet we are now expected to "accept" another Walmart Executive to manage forward a company which is supposedly the "focus" of our company growth.  Mr Herkert has lost "the team."  We hope the day comes (and soon) when our Board of Directors receives the wake-up call.  This company has been too good for too long to be lead down this path.


There’s a lot of history at work here, as this email points out:

When Supervalu and Wetterau announced a “merger”, it was not. 

I heard the words “remember WE bought YOU” at a few meetings as well as from others who were fine Wetterau employees.

Supervalu folks did at will what they wanted, and seemed to have little consideration, for Wetterau values, employees and their customers.

Bill Shaner took over for someone that was a Wetterau employee, I believe.

At times it appeared that Supervalu people in positions were ruthless in how they dealt with Wetterau employees and their careers.

Now the table seems turned and they do not like it!?! Hard for many to feel bad.


Just to return to the point I was trying to make yesterday...

On the one hand, I feel bad for Bill Shaner. He puts in 27 years with the company, runs this division for some six years, and suddenly he is supplanted. Doesn’t seem right.

On the other hand, to be perfectly fair, if CEO Craig Herkert really believes that Save-A-Lot is the engine that is going to drive Supervalu, he’s certainly entitled to bring in his own people to implement his vision. If you are going to go to war, you go with the people you know.

The problem seems largely about communication - the emails make clear that whatever Herkert’s vision is, he is not communicating it effectively.

In some ways, this reminds me of the contretemps taking place with the New York Yankees these days. Longtime catcher Jorge Posada, who is currently a designated hitter with a low batting average, was told last week that he was going to be batting ninth ... and he took it so badly that he pulled himself out of the lineup. Which is unforgivable. That said, I can’t help but feel that he could have been managed better, that the situation have been handled more diplomatically. It’s all about communication.
KC's View: