McGrath comes to his new post with extensive experience in the discount grocery sector, including 13 years with the Lidl chain, owned by Germany’s Schwarz Group. He was CEO of Lidl Ireland from 2009 to 2013 and CEO of Lidl USA from 2013 to 2015.
McGrath’s tenure with Lidl Ireland included a period of exceptional revenue growth for that division. He was selected to lead Lidl’s market entry into the United States in 2013 and laid some of the groundwork for that move, but he departed in 2015 to become CEO of the Caribbean and Central American region for Digicel, a wireless communications firm.
“We are thrilled that Kenneth has chosen to lead Save-A-Lot as we chart a new course for the company after its separation from Supervalu,” says Matthew Ross, chairman of the Save-A-Lot board and managing director of Onex Corp., the largest shareholder of Save-A-Lot. “Kenneth is a strong executive who brings to Save-A-Lot tremendous experience in hard discount retailing.
“He is highly capable of building a world-class organization, investing in the company’s capabilities and systems, and returning Save-A-Lot to industry-leading growth by leveraging its unique market position.”
Last December Supervalu completed the sale of Save-A-Lot to an affiliate of Onex for $1.37 billion in cash. As part of the deal, the two companies entered into a five-year professional services agreement under which Supervalu continues to provide certain back-office services to Save-A-Lot.
For some time, Save-A-Lot had been the top performer and sole growth generator among Supervalu’s three operating units, which also included a legacy grocery wholesale segment (which is now once again the company’s core business) and a grocery retail segment composed of a number of grocery banners operating mainly in the Midwest.
However, by the end of Supervalu’s 2016 fiscal year, fourth quarter operating income for Save-A-Lot had plunged more than 70% and identical-store sales declined more than 2%, as both customer traffic and the average transaction fell.
Claus had been named chief executive officer of Save-A-Lot in December 2015, when Supervalu was considering spinning the division off into a stand-alone company.