Inside This Issue - News
Safeway tabs execs
April 16th, 2012
PLEASANTON, Calif. – Safeway Inc. has appointed Robert Edwards, the company’s chief financial officer and executive vice president, to the position of president, succeeding Steve Burd, who continues in the roles of chairman and chief executive officer.
In addition, executive vice president Larree Renda has added responsibility for real estate and information technology to her portfolio of duties, which includes human resources and labor relations, strategic initiatives, corporate social responsibility, government relations, public affairs, and Safeway Health.
The promotion of Edwards represents a major reallocation of executive responsibilities, as he assumes overall direction of the grocer’s retail operations, marketing, merchandising, corporate brands, manufacturing, distribution and finance functions. He will continue to serve as CFO, a position he has held since 2004, until a successor is named.
"Robert is one of those unusual executives with a strong command of both the financial and operational sides of our business," says Burd. "His deep engagement with our operations and marketing units while he has been CFO will make for a seamless transition to Robert’s new role. His assumption of these new duties provides me an opportunity to concentrate more of my time on innovation and a range of strategic initiatives that will drive core and noncore business growth in the long term."
Before joining Safeway, Edwards served as executive vice president and CFO at Maxtor Corp. and prior to that held the positions of senior vice president, CFO and chief administrative officer at Imation Corp.
Renda began her career at Safeway in 1974, rising through store management ranks to become vice president of retail in 1991. She has since progressed through a succession of increasingly senior leadership roles to her current position. She is chair of the Safeway Foundation board of directors.
"We are taking one of our most productive and talented executives and broadening her duties to include oversight of two key functions," says Burd. "Both of these changes to our management structure will further strengthen our senior team and our ability to deliver sustainable growth."
It would be a mistake to assume that Burd’s relinquishing of day-to-day operational control in order to increase his focus on noncore as well as core parts of the business signals a step back for him. During Safeway’s investor conference in New York City last month, Burd pointed out that noncore businesses will play an increasing role in generating Safeway’s operating income going forward. "We want to marry noncore businesses with core and accelerate our growth," he said.
Core businesses, he elaborated, involve the sale of items and services offered in Safeway’s stores. "When we sell gift cards in our store, the sale of those gift cards and the profit that flows from that in our store, that’s core," he explained. "The margin that Blackhawk [Safeway’s gift card business] makes on distributing those cards to us, that’s noncore. The margin that Blackhawk makes selling those cards to other retailers throughout the globe, that’s noncore."
The addition of real estate to Renda’s responsibilities gives her leadership over another noncore business that Safeway expects to be a growth engine. The company has created what it calls property development centers (PDCs) to leverage its strength in real estate.
Safeway is focusing on building retail shopping centers with its own stores as the anchor tenants, thereby obtaining the financial benefits that heretofore have gone to shopping center developers, and which amount to returns that exceed that of an average Safeway store, according to Burd.
Another noncore business or activity in which Burd has been deeply interested is health care, an area in which Safeway has developed unusual expertise.
"We know more about how to control health care costs than I would say the top 10 medical centers in the United States," he said. "So for more than two years now, we’ve been developing a wellness play that essentially takes that knowledge, productizes [sic] it and introduces it to consumers. I’m going to call that a noncore business, but sometime in the next 12 months, a piece of it will enter the core business."