Supervalu has fired CEO Craig Herkert as the floundering grocery parent looks to bounce back from disappointing quarterly results.
Chairman Wayne C. Sales was named president and CEO on Monday. Sales, 62, has been a board member since 2006 and previously held leadership positions with Canadian Tire and Kmart.
"In my new role, I will work closely with our leadership team to improve our sales and earnings trajectory and generate long-term shareholder value, focusing relentlessly on identifying factors that will drive meaningful improvements in our strategy execution and overall performance," Sales said. "We will take significant cost out of the business, and move with urgency in our retail food business to lower prices and create points of sustainable differentiation for our customers.
Herkert came to Supervalu from Wal-Mart in 2009.
LETTER FROM WAYNE SALES
New Supervalu CEO Wayne Sales wrote the following letter, which will be distributed to sales associates on Monday:
Hi, Team. This is Wayne.
Today the Board of Directors announced my appointment as president, CEO and chairman, replacing Craig Herkert. Craig took the helm during a time of great challenge for SUPERVALU, and I want to thank him for his service over the past three years. I have attached the press release we issued today and a copy of my biography so you can learn more about me. I look forward to meeting as many of you as I can in the coming weeks, and I will host an all-associate meeting tomorrow at 10 a.m. CT.
I have served on the SUPERVALU Board of Directors since 2006, and like you, I have been disappointed with our results. I am well aware of what our critics have said about us. You are all familiar with our continued decline in sales, profitability and share value. I have spent most of my professional career working with and leading retail and non-retail companies through a variety of difficult situations. I see a number of similarities between what I find as I join the SUPERVALU leadership team today and what I found upon joining Canadian Tire, a multi-billion-dollar, publicly owned retailer that was anticipating large, fierce competitors who were expanding into Canada. I served as president and CEO of that company from 2000 through 2006. We were faced with high prices, a high cost structure and no defined point of differentiation. But guess what? By all accounts, we were successful. I am here to lead SUPERVALU forward, and as I step into my new role, I am focused on accelerating our progress in four areas:
1. We must generate profitable sales. During my tenure on the Board, I have met many talented front-line team members who serve customers directly and back-line team members who support and enable the front line. Together, we will take immediate steps to profitably improve sales and create points of sustainable differentiation in the marketplace. This will happen while we continue to roll out long-term price improvements. Our goal is to be competitively priced, and we will move as quickly as possible to achieve this.
2. We must take significant costs out of the business. Today, we are doing many things that are not business critical, are of low value or are not focused on driving sales or profitability. Tough decisions will be made to change this reality. That said, I promise you we will be acting with the right objectives in mind. We will position ourselves for the future and we won't take steps that impede our ability to serve customers. Simply stated, we must implement initiatives that take cost out of our business faster than we make our price investments.
3. We must grow SAVE-A-LOT. Our go-to-market strategy is unique, and among our greatest assets are our store directors, licensees and independent retailers. We will strengthen our engagement with our SAVE-A-LOT licensees – leveraging their expertise, enhancing our collective performance, and ensuring our ability to grow a nationwide network of hard discount stores.
4. We must build on our strong legacy of serving independent retailers.
We will work with our independent retailers to reinforce their confidence in our ability to provide the superior service they need to increase sales and profitability.
As we go forward, time is our biggest enemy, and we are accountable for the keys to our success. Many of our customers and investors have lost confidence and patience with SUPERVALU; I know some of you may have, as well. I am excited to be part of the team and you have my personal commitment to do everything I can to ensure our future.
Will you join me in this transformation? We will prove the naysayers wrong.
Earlier this month, Supervalu announced it would cut 800 jobs, including 200 in Minnesota, as the grocery chain reported dips in first quarter net income and revenue. The company also suspended its dividend to shareholders.
The company has said it's following a strategic plan to "remove permanent expenses from its business," as well as reduce overall operating costs, efforts "necessary in helping the company achieve its plan to deliver more competitive pricing to its customers."