retail news in context, analysis with attitude

The San Jose Mercury News reports about the departure of Safeway CEO Steve Burd this week, and offers this assessment:

"He shepherded the grocery retailer through its most tumultuous period, and the company now bears little resemblance to the floundering operation he took over in 1993.

"Some say the road to this transformation was paved with innovative ideas and calculated risks, while others criticize Burd for cost-cutting tactics that alienated employees and customers. Where labor relations, customer service and health care are concerned, Burd has a mixed record, according to interviews with analysts, grocery industry leaders and labor advocates.

"But where they all agree is this: Burd took a company on the brink and turned it into a formidable supermarket giant, made a profit while dozens of other grocers succumbed to bankruptcy and kept thousands of workers employed in union jobs."

The whole story can be read here.

The story goes on to say that "perhaps where Burd distinguished himself the most is in the final years of his career as he focused on reforming the nation's health care system. Under Burd's leadership, Safeway health care benefits were converted to an incentive-based plan to encourage healthy habits like losing weight and exercising. Workers who smoke, are obese or fail to meet other standards of health pay more ... But many health care advocates say Burd's plan passes the cost of health care onto employees who need it the most. Morgan Downey, editor of the Downey Obesity Report, which publishes research and news on public health, says Safeway employees could end up paying up to $1,500 a year more for failing to meet what he calls arbitrary health targets."
KC's View:
We could have a long debate about Burd's approach to health care. While I'm not sure how the numbers should add up, I have long believed that the philosophy - that people have to have skin in the game when it comes to health care and related costs - is the right one.

Some would argue that Safeway's biggest deficit at the moment is that it does not think enough like a merchant. That may be a result of Burd's sense of priorities ... and it perhaps should be a high priority for his successor.