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Albertsons announced this morning that Jim Donald - who started with the retailer more than four decades ago and since has run companies as diverse as Pathmark, Starbucks, Haggen and Extended Stay Hotels - is joining the company as president/COO, effective immediately.

Donald will report to Albertsons chairman/CEO Bob Miller.

The move comes as Albertsons embarks on the acquisition of drug chain Rite Aid, which when completed will result in a company that has approximately 4,900 locations, 4,350 pharmacy counters, and 320 clinics across 38 states and Washington, D.C., serving 40+ million customers per week, and with an estimated value of $24 billion.

When the Rite Aid deal was announced, it was said that Rite Aid Chairman/CEO John Standley will become CEO of the combined company, with current Albertsons Companies Chairman/CEO Bob Miller serving as Chairman. For the time being, Donald’s responsibilities will be to focus on Albertsons’ existing retail businesses, which include Safeway, Jewel Osco, Vons, Shaws, and Market Street.

It its coverage this morning, the Wall Street Journal quotes Miller as saying that “Mr. Donald’s decades of experience at many different kinds of retailers will help him stitch together Albertsons’s and Rite Aid’s disparate businesses. ‘The skills he’s acquired by doing those things will be a plus,’ Mr. Miller said.’’

Albertsons is owned by an investment consortium led by Cerberus Capital Management, along with Kimco Realty Corporation, Klaff Realty, Lubert-Adler Partners, and Schottenstein Stores Corporation. The Journal writes that “executives believe the combined company will benefit from selling shoppers everything from migraine medication to meal-kits in one store. Customers who shop for groceries while picking up prescriptions spend more than three times more than supermarket shoppers who only buy groceries, according to figures that Albertsons executives presented recently to shareholders.”

In 1991, Donald ran Walmart’s then-new grocery business, and subsequently went to Safeway as head of its eastern division. From there he went to Pathmark, where he guided it through bankruptcy and then an IPO. Donald joined Starbucks in 2002, first as president of North America and then as CEO. In 2009 he joined Haggen, guiding it through bankruptcy, and then became CEO of Extended Stay Hotels, where he took the company public. Donald left Extended Stay in 2015.

In 2006, Donald was named one of the “Top 25 CEO’s in the World” by the Best Practice Institute. He also has served on Rite Aid’s board of directors.
KC's View:
When I saw the news this morning, I immediately called Jim Donald - we’ve known each other for more than 15 years, and we’ve worked together on both retailing and speaking projects. He answered the phone at 1 am PST - he was in Seattle and had just walked the aisles of a Safeway store there. He told me that he’d be hitting another store at 6 a.m. on the way to the airport.

Which tells you everything you need to know about the kind of tireless passion and discipline he’s going to bring to his new job.

Look, anyone who has been reading MNB for any period of time knows that I’m a big Jim Donald fan. I’m not alone in this; there are a bunch of disappointed people this morning because they’re reading about Jim joining Albertsons and realizing that he won’t be available to run their companies. (Every time a top job came open, I’d get emails suggesting that Jim should get the call. People seemed disappointed to find out that I don’t have that kind of juice. Imagine how disappointed I am.)

One of the things that always has impressed me about Jim has been that at the various companies where he’s been in a leadership position, he’s always been savvy enough to understand that while he walks in with a complete toolkit, he can’t use the same tools in each situation. That’s not an insight shared by every executive; many belong to the “if all you have is a hammer then the problem must be a nail” school of leadership and management.

And, he’s a “front lines” guy. MNB readers know how important I think it is for retail companies to be more focused on the people and stores that are the face of the company for shoppers. I’d by lying if I did not admit that my thinking in this regard has been shaped and reinforced by Jim.

Jim couldn’t say much about his new role, except to say that he is absolutely convinced of Albertsons’ ability to run first class stores. But he also said something else important - especially in the current competitive climate. Albertsons, he said, has to be exceptional not just within “the four walls” of the store, but also in the “no-walls” environment in which retailers find themselves competing today.

That’s a critical insight for Albertsons’ future.

At the same time, Jim’s experience bringing two companies public must be noted since at Albertsons it has been an open secret that ownership has been looking for the right time to file for an IPO.

While I have a bias, I do think it is fair to suggest that Albertsons just got itself a very important competitive weapon - he was wandering one of its supermarkets in the early morning hours, looking for ways in which the front lines - the place where the store and most consumer intersect and interact - can be made more effective and efficient.

Since Albertsons’ acquisition of Rite Aid was announced, I’ve been very clear here about my concerns that the deal will not work if it only ends up being about size. The greater focus has to be on being compelling, relevant and effective. Efficiency and size alone cannot be the drivers of this deal.

I think Albertsons just got a senior executive who knows this in his bones.