One of food retailing's giants is retiring on Jan. 1, so it's time to assess what he's meant to this industry.
I know, I'll get some pointed feedback, like this: “Best ever? How could he rank over a supermarket industry legend like the late Sidney Rabb of Stop & Shop, or even one of today's greats, like David Dillon of Kroger?”
Good point, but it's hard to understate the impact of 75-year-old Sinegal, who will become an advisor to Costco for a year and will remain on the board.
Here are some brief examples of his contributions:
• Co-founded a business in 1983 that became a tough rival to supermarkets, growing to $87 billion in sales in 2011 with some 584 warehouse outlets.
• Took an established retail model (membership warehouse club) and enhanced it with upscale products, expanded private label and superior fresh foods.
• Built a sustainable and unique culture marked by doing the right things for members and associates (even if it meant battling with vendors and Wall Street.)
• Dismissed personal accolades in favor of spotlighting Costco's team.
Sinegal was unusual in that he was both founder and CEO, noted Neil Stern, senior partner at McMillan Doolittle. “It is difficult from a management style, in any industry, to be entrepreneur and leader,” he said. “There are not many examples. You could point to John Mackey at Whole Foods, Jeff Bezos at Amazon, as two other examples.”
Sinegal will hand over the reins of a company that's well positioned in food retailing. In the year ended Aug. 28, Costco's net income grew 12.2% to $1.5 billion on a sales gain of 14.2%, with comp sales ahead 6%.
Perhaps the best proof of Sinegal's lasting contribution is his influence on his successor, Craig Jelinek, a Costco veteran who is currently president and COO.
Jelinek has worked with Sinegal for 28 years, and you can tell. He has little interest in making big changes to a successful operation or in further building up his own reputation. He humbly refers to Sinegal as “the legend,” and he's ready to steer the Costco ship on a very similar course.
All of which says a lot about Captain Jim's successful years of navigation.