Recession, New Administration Usher in Changes

The economy and the new regime in Washington are clearly the biggest players at work behind the scenes on this year's Power 50 list. The profiles of the most influential people and one concept in food retailing on the following pages reflect to a large degree either the impact of the recession or the installation of the new administration. The list was created by SN editors using industry feedback.

The economy and the new regime in Washington are clearly the biggest players at work behind the scenes on this year's Power 50 list [3].

The profiles of the most influential people — and one concept — in food retailing reflect to a large degree either the impact of the recession or the installation of the new administration.

The list was created by SN editors using industry feedback. This year, SN also added a new twist to the Power 50, slotting each of the players into categories based on their specific traits [4].

Among the Top 10, President Obama debuted on this year's list at No. 5 — a reflection of his reformist positions in such key areas as labor, food safety, health care and taxes.

Many of his appointments can also be found on the 2009 list, including U.S. Department of Agriculture Secretary Tom Vilsack (No. 47), Food and Drug Administration Commissioner Margaret Hamburg (No. 48), Environmental Protection Agency Administrator Lisa Jackson (No. 49) and Health and Human Services Secretary Kathleen Sebelius (No. 50).

Tom Zaucha, president and chief executive officer of the National Grocers Association (and himself a member of this list at No. 46), said the new administration could present a host of problems for food retailers, particularly in areas related to labor.

“Given the appointments, given the [Democratic] Congress and given the agenda, it's going to be a real challenge,” he told SN.

Leslie Sarasin, president and CEO of Food Marketing Institute, pointed out that the new administration's biggest influence so far has been in the area of food safety, with the creation of the Food Safety Working Group and a pledge to increase interagency cooperation on preventing and tracking foodborne illness.

Sarasin and her counterpart at the Grocery Manufacturers Association, Pamela Bailey, also make their debuts on this year's Power 50 list, at No. 44 and No. 45, respectively. Both were named to their new posts in 2008.

Many of the retailers on this year's list fall into the “Recession Busters” category — reflecting their success in driving sales in a weak economy.

Top among them is David Dillon, the chairman and CEO of Kroger Co., who remains No. 1 on the list for the second straight year as the company's strong price focus and deep connection with customers have kept it among the industry's top performers.

“In our industry, operating successfully in any environment is a challenge,” Dillon said in a recent conference call. “Performing well in this economy is remarkable.”

It is no surprise, then, that Wal-Mart's top executive holds a high spot in this year's Power 50 ranking. Although Wal-Mart is a perennial Power 50 player, this year's representative from the retail giant is new, as Mike Duke, named CEO earlier this year, debuts on the list at No. 2.

Charles Youngstrom, president of Aldi U.S., is another Recession Buster who cracked the Top 10 list this year (No. 6). The fast-growing limited-assortment retailer recently opened its 1,000th store, and has plans to expand into Texas and New York City.

Also new to this year's list is an entity that has emerged as a true power player in the weak economy — the private label (No. 43).

A key component in the recession-busting success of all three retailers listed above, private label has emerged as the weapon of choice for operators seeking to retain profit margins amid smaller overall shopping baskets.

According to a survey conducted by SN in May, more than half of respondents said that during the past year private labels replaced national brands in at least one of the categories in which they compete.

That's very much on the minds of the 13 suppliers on this year's list (Nos. 26-38), many of whom have outlined recession-busting strategies of their own.