Albertsons CEO says treating people right is the key to success
Maybe you’ve seen Bob Miller shopping for groceries at the Albertsons store on State and 16th streets, where founder Joe Albertson started a supermarket empire in 1939.
Maybe you saw him swinging a club at a local golf course, relaxing at his summer home in McCall or dining with his wife at The Stagecoach Inn, one of the couple’s favorite restaurants.
Chances are, you didn’t recognize him. One of the most influential people in Boise, he stays out of the spotlight.
The 73-year-old CEO of Albertsons runs the second largest traditional grocery chain in America, employing more people in the U.S. than any other Idaho business.
You won’t see him on TV, holding a news conference or making speeches to the chamber of commerce. But his fan club is sizable. Former Albertsons CEO Gary Michael told the Statesman that he rarely grants interviews to the press anymore, but he’d make an exception to talk about Miller.
“His great knack for leadership is: People really like to work for him,” Michael said. “He’s fair, and he’s generous with people. He lets them do their job.”
“[He is] just a quiet genius who outworks everybody else,” said Burt Flickinger, a retail analyst and managing director of Strategic Resource Group in New York. “People trust Bob with their careers, their lives. They’d run through fire for him.”
Miller has big plans for Albertsons. In addition to an initial public stock offering — which has been on hold for a while — the company is working on a new, 100,000-square-foot store in Meridian, at the busiest intersection in Idaho.
He also is a father of three men, who run businesses of their own, and has seven grandchildren ages 2 to 19.
Born on a farm in Mississippi, Miller contracted polio at age 4, spending almost a year in the hospital. After a few surgeries, he regained use of his right leg.
“When I was young and tried to play sports, and had kind of a handicap, I probably worked harder than other people,” he said. “And I even ended up captain of my football team in high school, so I did OK. Played one year in college and figured out that I was too small and too slow. But it helped with being competitive.”
He attended college briefly, then decided to work full time.
“I needed money. Just wanted to get married,” he said. “We started poor, that’s for sure. She was working for the telephone company for a little while, until we had our first kid. But then it was up to me. I had to bring home the bacon.”
Q: How did you start your career?
A: Sports were very important. That’s why I took a job in the grocery business. My first job [at a store Albertsons later bought] was sorting bottles, so I could go in at night and sort bottles any time I wanted to, as long as I got the bottles sorted. So I could go to practice, then go to work.
I sorted a lot of those damn bottles.
Q: Fill me in. What is bottle sorting?
A: In the early ’60s, all you had was your 12-ounce returnable [soda pop] bottles. In four or five brands. And there was a pretty big deposit on them, came to about a third of the cost. So people brought them back, and they just threw them in carts. They were slimy and dirty, and I’d put them in the right wooden case to go back to the bottler.
It was a dirty job, I would say. In fact, the first day I went to work, I ruined my shirt. The second day, I ruined my shirt. The third day, I brought a flannel shirt that I left there the six months I did that. ... I just left it there. Why would you wash it? It was ruined. ... When I quit, it was so hard you couldn’t move it. It was just solid on the front. But we had furnaces in those days, we burned everything, incinerated. So I burned that shirt soon as I got promoted to a box boy.
Q: Did you know you wanted to climb the ladder to CEO?
A: I don’t think I was motivated to plan ahead when I was young. But, if I got a job, I worked very hard. So, I got that bottling job at All American Markets, a company that Albertsons bought about a year after I started there. So I never thought about anything but working hard. When I got a promotion, I was never really expecting most of them. I was too busy working.
Q: Were you close to your parents?
A: My mom and dad moved to Boise for the last years of their lives because I was working for Albertsons.
I’ve been in and out of Boise since ’79. I was here for about a year and a half, then I left to go run the Denver division for five years, then I came back. I left in ’91 to go run a company in the Midwest — Fred Meyer. Did that for about 10 years, then went to Rite Aid for a while, then came back in ’06.
Q: What was different about Albertsons that made you want to stay here?
A: I have a great love for this company, because I spent 30 years here. I was really disappointed with what happened over the years when one of the best companies in retail didn’t do well. In ’06, I came back and wanted to see if we could do better with the stores we acquired, which were the worst stores. And here we are today, the second biggest private (grocery) company in the U.S. Growing and doing much better than I could’ve imagined.
[Faced with major financial problems in the mid-2000s, the Albertsons chain was split into three parts in 2006 and sold off to different buyers. Minnesota-based Supervalu bought a group of the stores including all Albertsons stores in Idaho. A consortium of investors led by New York’s Cerberus Capital Management bought most of the remaining properties and formed a new company to run them. Bob Miller came back to run that company. He was there to lead the reunion of the Albertsons chain in 2013, after Supervalu gave up trying to make Albertsons profitable and sold its Albertsons holdings to the Cerberus group. Since then, Miller also has overseen a merger with California-based grocery giant Safeway.]
Q: What was your secret to rebuilding the company?
A: Number one, we put people in charge who took care of their customers and employees. We have a decentralized model. The day we started, in ’06, we put presidents in each division. They knew how to run their stores, and they were much closer to their customers, so they knew the product that their customers wanted.
And we started improving almost the first day.
Certainly cleaning up the stores and motivating the people [helped] — making them feel good about working for us — because you can’t take care of the customer if the people that work for you don’t.
We’re basic grocery operators. We don’t have any secret formulas. It all comes back to people.
The truth is, I learned early on that if you’re nice to people, they’ll be nice to you. And if you’re nice to people, they’ll respond to what you want to do if you’re the boss. And just over time, if you’re nice to people, you have the ability to go back and talk to people that you knew years earlier, and they’ll respond to you. They won’t think, “I don’t want to talk to that guy.”
Q: Did you have any mentors?
A: I’ve had a lot of good bosses along the way.
The person who helped me the most in my executive jobs was Warren McCain, a past CEO of Albertsons. He was a tough mentor, but I wouldn’t be here today if he hadn’t helped me.
Q: How was he tough?
A: He had this automatic door closer. ... He’d be sitting at his desk, and you’d come in, and if the door slammed behind you, you knew you were in for it.
He had interesting language. I’d rather not repeat what he’d say, but it was always interesting.
But in the end, he was a great leader. He’s really who built Albertsons to what it was, before it started going downhill.
Q: Have you reflected on what made it go downhill? Mistakes that management made?
A: I think they got sidetracked. Albertsons at one time was the best financial company in this industry. They had a strong balance sheet, lots of cash, they could have done anything they wanted. I think, after Warren left, they started not concentrating on the stores and worried about other things. I don’t like to mention names, but one of their CEOs, he really did a poor job of running good stores. Starting to centralize. And it was very screwed up when we got the stores back.
Q: How long did it take you to figure out your game plan on fixing it?
A: About five minutes. We knew we were going to decentralize, put presidents in charge of each division with a staff. And they would have [profit and loss] responsibility and the ability to do what they needed to be successful.
A lot of them have stuck around. Even though some had retired, they came back, and they’re still here.
Q: Did you ask them to come back?
A: Oh, yeah. When we started, the only person on the team was me. So, I had 600 stores and me. I had to get a team together, so I called a lot of people I knew who’d been very successful at Albertsons and other places, and we put together a great team.
Q: What made you want to return?
A: I was retired. Thought I would just take it easy. But I was very interested, because it was the company I’d worked for 30 years. It was in a location where I want to be, because our summer home is in McCall, I had a son here and two grandkids. So I was very interested in the job, even though it was supposed to be a short-term job.
My four partners really bought it for the real estate value and were planning on trying to capitalize on that. I came in and said, “Well, I don’t want to have all those employees lose their jobs, so we need to figure out how we can keep these stores running or sell them to an operating company that will keep the jobs.” They agreed, and here we are.
Q: You were passed over for the job of CEO once, and you thought it was your only shot, right?
A: Well, Gary Michael was a really great guy. He was a few years older than me, but our ages were so close that if he worked 10 years as CEO, I would’ve probably been too old [to succeed him]. And I wanted to run a company, so I reluctantly left Albertsons. I went to Fred Meyer because I could be chairman and CEO and run the company.
Q: What appealed to you about running a company?
A: When you’re ambitious, and you think you can do things, you want a chance to do it. So, I wanted to run something. And I got the chance.
Q: What did you learn early in your career that you’ve kept with you?
A: If you aren’t willing to work hard, number one, you’re not going to be successful.
Always tell the truth. Because, if not, it’s going to come back to haunt you.
And continue to make sure that you do the right things. I tell people all the time, you’re stuck with your reputation all your life, so don’t screw it up. I’ve seen other people do things that were stupid and ruined their career and life.
I was always ambitious as I worked my way up the ladder. But I was working toward the next job. I had no idea where I would end up. This is amazing. I worked hard, I’ve done some things right, but I’ve had a lot of breaks, too. To be a CEO of a great big company, it takes some breaks and some good people supporting you.
Q: What is your day like?
A: I get up about 5:30, 6 a.m. Have coffee, read my emails — anymore, I read my emails for a long time, because I get a lot of them — look at the news. Try to get here by 8 a.m.; I’m usually late. Then, I have a lot of things going on in the office.
But I travel a lot. I get out in the stores. That’s what I like to do. It’s what keeps me motivated. We are a very fortunate company. We have close to 280,000 employees — 47,000 of those employees have been with us over 20 years.
If I go into a store and I ask people how long they’ve been there, you’ll always find one or two who’ve been there 25 years.
At a store in Southern California, the service deli manager who’s been with us 20 years, came straight from Asia, her first job was there, she was washing pots and pans and now she’s running the deli.
Q: Why do think they stuck around?
A: They’re good jobs, they’re good-paying jobs, and they like the business. Some people love the ability to work and talk to people all day and help people, and they get that chance in our stores for sure.
Q: What are your plans for Albertsons now?
A: We’re aggressively remodeling our stores. We’ve touched over 200 stores last year, we’ll do over 200 more this year. We’ve now remodeled every store in the Treasure Valley except for Broadway — and we’re going to build a new store there. We’re going to build 18 new stores this year. We’ll spend more than $1.4 billion this year in capital.
At Eagle and Fairview, we’re going to build the best grocery store in Idaho. One that people will be amazed at. It’ll be as good as any store in the U.S.
It’s 100,000 square feet. We’re going to have everything you would find in a traditional Albertsons, plus much more variety in fresh [food]. We’ll have most of the things you’ll find at Whole Foods. A great pharmacy. A great sit-down area with lots of prepared food. Probably a wine bar. And the variety will be unbelievable in the fresh.
Busiest corner in Idaho. Lots of traffic. It needs to be a destination store. And we had the ability to take over the Shopko there which is 100,000 square feet. So, we’ll invest lots of money there, and it’ll be a great store.
Q: Do you think Albertsons is ready for Amazon, Aldi and other new competitors in retail?
A: There’s no end to new competitors. There’s no end to people closing and going away, too. ... I think it’s the normal course in our business.
Amazon, they’re going to certainly make Whole Foods better because [Whole Foods has] got a long way to go. They’ve been sinking like a rock. They need some help. We’ll see if Amazon can help them. But it just heightens the competitive environment.
Amazon, it’s amazing. They’re big, they can spend as much money as they want. But I think they’re after that last mile where they can [land] the customer, and we are, too.
We’re aggressively rolling out home delivery. At the end of this fiscal year, we’ll be in eight of the 10 biggest markets in the U.S. We’re going to spend lots of money on home delivery. A place like Chicago, we’re number-one share in the supermarket sector. ... We’re going to work hard on home delivery, even though Amazon is, too, and lots of other people. We think we can compete in that space, because somebody can order the complete variety from our store. And we have countertop service. When people order, they get a delivery window, and we take it to their kitchen counter. We think we have a good option, we just need to grow and do it fast, and we’re doing that.
Then, we’re going to have more click-and-collect. ... You order online, and then you pick it up, and the order will be ready for you at a specific time.
Q: How is home delivery doing in Boise?
A: Good. It started out slow but it’s growing every week, and our comments are very positive, and we continue to see new customers.
Q: When will you be satisfied with where Albertsons is as a company?
They tell me they’ll get to $100 billion [in sales] before I retire, my partners here. That’s a big stretch. [Sales for fiscal year 2016 were about $60 billion.]
But we’re certainly aggressively looking for opportunities to acquire other companies that will fit and add value. ... Small, regional companies. We buy companies and try to keep their identity, let them keep doing what they’re doing for the community and just make them better. Like at United, a company we bought in Texas a few years ago, we didn’t put one person in there. The same people are running that company today, doing very well, in fact we’ve promoted a few people out of there. ... So we’re really a great candidate to buy independent chains and roll them under our umbrella.
Q: What did you change, then, to make it better?
A: We lowered their costs because of our buying scale. We added a lot of money for technology. We invested in remodeling their stories, we invested in home delivery in Lubbock, we continued to invest. We have some Albertsons stores in West Texas where they were anyway, and we gave those stores to them to run.
Q: How did you recruit Albertsons new president, Wayne Denningham?
A: He was retired when I came back. I called him, said, “What are you doing?” He said, “Nothing.” I said, “Well, I’ll see you Monday.” He said, “OK.”
Q: What do you really want Boiseans to know about their hometown grocer?
A: We’re a company that really is committed to giving back. Last year, we made donations with our customers’ help, of close to $300 million; $25 million of that came from our foundation [Albertson Cos. Foundation] ... and the rest came from our stores and lots of different places.
We’re committed to helping with hunger, children in schools, and a lot of local things that our stores and divisions get involved in. This is my opinion, but we are really great corporate citizens.
Q: What’s next for you this summer?
A: I’m going to drive my 19-year-old grandson back to college. He and I are going to leave Portland and go to Syracuse (N.Y.). That ought to be a good drive. [We are taking] his car, some kind of Toyota. I get to spend a lot of time with my oldest grandson, so that’s great. Just him and I.
What advice did Bob Miller give you?
Bob Dimond, Albertsons Cos. executive vice president and chief financial officer: “Treat people right,” no matter what the circumstances are. “Keep it simple,” for presentations, schedules, memos, etc.
Jim Perkins, ACME division president: “Bob is always very consistent. He teaches us to treat people right, work hard, empower our teams and mentor people to become successful.”