PORTLAND, Ore. -- The food industry needs to refocus on selling more products, vs. concentrating on making profits on how it buys, Robert G. Miller, former chairman and chief executive officer of Fred Meyer Stores here, told Executive Forum 2004. The forum is the 10th annual conference sponsored by the Food Industry Leadership Center at Portland State University.
"Historically, the goal of supermarkets was to sell more goods," Miller said. "But over the last 20 years, the industry has changed from being sellers to buyers. It tries to make all its profits from buying.
"In the 1990s, the industry's goal was to raise EBITDA margins [margins on earnings before interest, taxes, depreciation and amortization], and it forgot about getting higher sales. The food industry needs to get back to that."
Miller left the food industry in 1999 to become chairman of Rite Aid, Camp Hill, Pa.
According to Miller, too many supermarkets are getting into other businesses "like gasoline and pharmacy to disguise negative sales. You'd better get to work on those negative sales to get back on the road to success.
"What the industry needs to do is work with vendors to establish prices that will sell more goods. That will result in real success.
"In the center store, everyone carries the same merchandise -- even the drug stores. You need to be sellers of quality perishables. That's what will set you apart."
Miller made his remarks moments after being presented with the Roger Ahlbrandt Award for lifetime achievement in the food industry.
The award was presented to Miller by Jim Donald, chief executive officer of Starbucks and the former chairman and CEO of Pathmark Stores, Carteret, N.J. He described Miller as "my mentor for 20 years."
According to Donald, "Bob has demonstrated professional leadership and excellence. He has always been a pillar of consistency for doing what's right for his company and his people, and he's constantly teaching how to balance life and work."
The Ahlbrandt Award is named for the late dean of the School of Business at Portland State.
According to Miller, the key to his success over the years has been "to get up in the morning, be positive, and make your people feel good. Any successful turnaround requires reinforcing the positives. So look at your goals on a day-to-day basis, not at the big picture or the stock price, and celebrate any success you have.
"Do what you have to do to compete, and do it better every day. Work hard because real rewards are earned.
"Treat people right, with recognition, respect, praise and appreciation.
"Always tell the truth and operate with the highest integrity because that will protect your reputation and pay big dividends. And always give back by helping the less fortunate -- not just with money, but with time, effort and caring."
In his talk, Miller looked back on more than 40 years in the food industry, which included three years with a small Southern California chain that was acquired by Albertsons; 30 years with Albertsons; seven years with Fred Meyer; and 14 months as vice chairman and chief operating officer of Kroger, Cincinnati, after Kroger acquired Fred Meyer.