Whole Foods CEO finds Amazon culture "challenging"

A Forbes story last month reported that Whole Foods CEO John Mackey is struggling with the Amazon culture, describing it as "challenging" in a recent speech. Mackey announced that he has scheduled a retreat to help him and other top Whole Foods executives better align with Amazon's "higher purpose."

In a short period of time, Mackey has seen Amazon close one of the five newly opened Whole Foods 365 stores, and the four others have seemed to stall. The 365 concept was Mackey's attempt to attract shoppers and dispel the "Whole Paycheck" image. According to reports, the stores did neither.

Amazon's plan, according to CEO Jeff Bezos, is to lower prices throughout the entire Whole Foods chain, not just at the smaller format stores.

A recent survey by ChargeItSpot, which owns cellphone charging stations, revealed that 62% of shoppers were more likely to shop at Whole Foods now that it has been acquired by Amazon, and 84% had positive feelings about the merger.

Seven grocers in top 30 U.S. private companies

Forbes published its 33rd annual ranking of America's largest private companies, and seven grocers landed in the top 30. (Cargill topped the overall list, with $109.7 billion in sales, followed by Koch Industries).

Albertsons, with several banners including Albertsons, Safeway and Acme, is third on the overall list and the top grocer, with $59.7 billion in sales and 273,000 employees.

Also on the list:

#7: Publix Super Markets
#10: C&S Wholesale Grocers
#12: HE Butt Grocery (H-E-B)
#16: Meijer
#25: Southeastern Grocer (Bi-Lo, Harveys, Winn-Dixie)
#27: Hy-Vee

Aldi on the verge of changing the grocery landscape

A Forbes article published last month characterized Aldi as a nuisance to many of America's most venerable food retailers and manufacturers, and called it a major force that is on the verge of changing the grocery retailing landscape.

The story cited Aldi's strategy of selling largely its own privately branded knockoffs of established American foods, while deleting conventional supermarket services. For example:

• There are no counter service departments; everything is packaged and self-service;
• Product is wheeled in on pallets;
• There are no baskets;
• Carts are self service and customers provide a 25 cent deposit that is returned when the cart is returned.

So, no service departments to staff, no stockboys, and no one needed to collect and manage baskets and carts. The only staff members in the store are forklift operators, a cashier or two, and possibly a third-party loss-prevention agent. That's quite a financial savings.

The end result is that Aldi has successfully deleted brand and pricing as a shopping variable. For example... looking for Frosted Flakes? They have it, and it's in a box that looks very much like Kellogg's Frosted Flakes, complete with a cartoon animal giving a thumb's up. And for many shoppers, this is a wonderful thing. It makes the shopping experience easier and quicker. Customers don't have to compare prices or think about brand choices, and there are no BOGO's, deals, coupons, endcap promotions or in-aisle shopper marketing promotions to distract them. Their shopping is done easily and efficiently.

Forbes also pointed out that Aldi has not yet reached the Rocky Mountains or westward, which means about 25 percent of the U.S. does not have access to the company's stores. So, there is plenty of growth opportunity, and plenty more grocery retailers to challenge.

Supervalu has problems, and experts have opinions

A recent Forbes.com blog post pointed out that Supervalu (Acme and Save-A-Lot in these parts) has problems. "Revenue at Supervalu has declined each of the past two years, earnings have been negative for two of the last three years, and dividends have been declining as well..."

According to the blog post, Former Supervalu President Gene Hoffman questions the company's focus and wonders if its leadership has "the chops" to formulate and execute "a winning multi-front growth strategy."

In addition, a panel of experts consisting of retailers and consultants made a variety of suggestions. Emphasize price and value, and target Aldi's traffic, says a retail advertising exec. Focus on growing the retail formats, especially Save-A-Lot, says an industry consultant. Rely as much as possible on good regional suppliers and niche wholesalers, says an independent grocer.

As the author notes, Supervalu embarked on a three-pronged strategy of wholesale/supply chain, regional retailing and discount retailing. The big question that remains is whether the company, once the country's largest and most profitable food wholesaler and retailer, can survive with these three businesses intact.

Sam Martin has "embedded a strong burning imperative" at A&P

I stumbled on a blog at Forbes.com by George Bradt called "The New Leaders Playbook." The March 16 blog entry below is the result of Bradt's interview with A&P CEO Sam Martin and the process Martin is going through to turn around the troubled grocer.

Among other things, the author credits Martin with successfully accomplishing step 6 of his leadership playbook: embedding a strong burning imperative. Bradt defines this step as a sharply defined, intensely shared, and purposefully urgent understanding from each of the team members of what they are "supposed to do, now."

Well, that's good.

How CEO Sam Martin is Driving the Imperative to Overhaul A&P