Brand new Meridian Albertsons is among the biggest of them all
The president of Frito-Lay North America has been named the next president and CEO of Albertsons Cos.
Vivek Sankaran, 55, will replace Jim Donald, who was appointed to the post in September, Albertsons said Friday in a news release. Donald succeeded Robert Miller, the longtime CEO, who continued as chairman of the board. Miller will become chairman emeritus and will continue on the board of directors.
It was not clear why Albertsons replaced Donald as CEO after just seven months. An Albertsons spokeswoman declined to comment beyond the news release, which did not address the question.
With the shuffle, Donald will continue as cochairman of the board beside Leonard Laufer, an executive with Cerberus Capital Management, the New York private equity firm that controls Albertsons.
Before Donald’s appointment, Albertsons had planned to appoint Rite Aid chairman and CEO John Standley to Albertsons’ top position. That plan was scuttled when a planned merger between the Boise grocery chain and the Pennsylvania pharmacy company fell apart last summer.
Donald worked for Albertsons from 1976 to 1991 and spent nearly three years as CEO of Starbucks before being replaced by Howard Schultz in 2008. He also served as CEO of Extended Stay Hotels and the Haggen chain, which Albertsons later bought.
Under Donald, Albertsons built up its online offerings and store pickup and delivery options. It also opened two much larger stores in the Treasure Valley — on Broadway Avenue in Boise and at Fairview and Eagle roads in Meridian — that emphasize fresh foods.
Sankaran comes to Albertsons after a decade with PepsiCo, Frito-Lay’s owner. He was named chief operating officer in 2016 and promoted to president of Frito-Lay North America in December, overseeing the company’s $15 billion snack food business. Sankaran will begin work at Albertsons on April 25.
“Vivek has the keen understanding that the front line is directly linked to the bottom line, and I’m confident he will inspire and engage our 270,000 associates across our stores, support offices, manufacturing facilities, and distribution centers,” Donald said in a news release.
At Albertsons, Sankaran faces a company saddled with debt, fueled by the SuperValu buyout and the 2015 purchase of Safeway. As of December 1, Albertsons reported $10.7 billion in long-term debt. That was down from $11.7 billion at the end of February 2018.
Revenue for the quarter ending Dec. 1 was $13.8 billion, up 1.8 percent from the corresponding quarter a year earlier. The gross profit margin was 27.8 percent, up 1.1 percent from a year earlier.
Sankaran said it was a “great privilege” to join a company with such a long history. Joe Albertson, a former Safeway store manager, opened his first store in 1939 at 16th and State streets in Boise.
The Albertsons chain struggled in the early 2000s and finally broke up in 2006, selling itself in three pieces. CVS bought its drug stores. Supervalu, a Minnesota grocery wholesaler, bought 1,100 stores under multiple banners, including all the Idaho Albertsons stores. Cerberus and a group of real estate companies bought 655 underperforming Albertsons stores that Supervalu didn’t want in the South and Southwest and ran them from Boise.
Supervalu failed to restore profitability to its stores and in 2013 sold those it still operated to the Cerberus consortium, reuniting what remained of the old chain. In 2014, Albertsons bought the larger Safeway chain, creating the second-largest traditional grocery chain in the U.S. In 2015, the private equity owners sought to begin cashing in on their investment by taking Albertsons public, but they shelved that plan, and Albertsons remains privately held.
The company now has nearly 2,300 stores across several banners, including Safeway, Vons, Jewel Osco and Haggen.
Sankaran earned a master’s degree in business administration from the University of Michigan, a master’s in manufacturing from the Georgia Institute of Technology and a bachelor’s in mechanical engineering from the Indian Institute of Technology in Chennai.