Skip navigation


Visionaries are presented in alphabetical order by section in SN. For details on how they were chosen, see Page 3.Robert O. AdersBrought his mediation skills to help unify and lead the Food Marketing InstituteThe late 1960s was a time when the food business wasn't receiving many kudos.To the contrary, slings and arrows were flying at supermarket retailers from consumer groups, the media, civil-rights

Visionaries are presented in alphabetical order by section in SN. For details on how they were chosen, see Page 3.

Robert O. Aders

Brought his mediation skills to help unify and lead the Food Marketing Institute

The late 1960s was a time when the food business wasn't receiving many kudos.

To the contrary, slings and arrows were flying at supermarket retailers from consumer groups, the media, civil-rights activists, labor and government. All were convinced that supermarkets were in the wrong: The business was seen as rife with profiteers and as harboring executives prone to wrongheaded decisions ranging from marketing to hiring. Government was being importuned to step in, fix the mess, and government was inclined to do so.

The supermarket business was ill-equipped to assert its point of view then. After all, it wasn't really an industry, but rather a conglomeration of insular companies, many filled with executives convinced they were right and that the critics were wrong. So what more did business need to do other than to be right?

Into that milieu stepped Robert O. Aders who, from his perch near the topside of Kroger Co., and his view as a board member of the Super Market Institute and the National Association of Food Chains, became convinced that a more unified and accommodating voice might be key to mollifying critics and, incidentally, would go a long way toward forging an industry from disparate business interests.

Aders had started in 1957 at Kroger after a couple of military stints and the teaching of law. One thing led to another: "I was always lucky enough to work for someone who got promoted," he demurred. In 1970, he surfaced as Kroger's chairman upon the retirement and three-way title split of Jake Davis' responsibilities. Davis had been chairman, president and chief executive officer. During his tenure at Kroger, Aders' career also found him swinging into temporary quasi-governmental and governmental assignments. At various times in the early 1970s he was co-chairman of the nutrition subcommittee of the Consumer Advisory Panel to the President, was on the Wage and Price Commission and became Under Secretary of Labor, then Acting Secretary of Labor. Through that, he continued with more global food-retailing initiatives involving the development of scanning, labor relations.

In 1976, he was approached by industry executives on behalf of SMI and NAFC to gauge his interest in heading a "Food Marketing Institute" should the boards of the two associations agree to merge. He was and it happened. Aders became president and chief executive officer of the newly formed FMI in January 1977.

Then change started: "Early in the game at FMI, I was able to persuade the board that we should work proactively with labor, the media and so on to form an agenda that would involve government and manufacturers and others to work out our problems," he recalled. As a result, during the period of 1977 to 1982, a far more cohesive industry emerged, one able to speak with something like a unified voice and tone; an industry formed from the primordial clay of fragmented business interests with FMI's head chief among the shapers. Indeed, to some that time was the golden age of the food-distribution industry. Aders retired from FMI in 1993 and Tim Hammonds, a longtime FMI executive, assumed Aders' titles.

Byron Allumbaugh

Tried new ideas and shared them with the industry

Byron Allumbaugh was the industry's go-to guy.

In the 22 years that he presided over Ralphs Grocery Co., he was always willing to test new ideas and to share what he learned with the rest of the industry, observers said.

"Ralphs was always very generous about sharing what it learned from technology and various new techniques," one industry leader told SN.

Ralphs pioneered scanning in the Western U.S. in 1974 when it became the first supermarket west of the Mississippi to install the new technology. "Everyone had scanning by 1979, but when we started, Giant Foods in Maryland was the only other chain with it," Allumbaugh told SN.

He said Ralphs recognized the benefits of scanning early on, including checkstand accuracy, front-end speed and information management.

"We were part of Federated Department Stores at the time, and we were able to convince them scanning was the right thing to do. With an annual volume at that time of about $500 million, we were small enough and flexible enough to do it efficiently," Allumbaugh said.

"We worked on using the scan data from the very beginning, and that information proved beneficial to Ralphs early on."

A decade earlier Ralphs led the way on block-ready beef, "which changed the whole meat industry," Allumbaugh recalled. "Block-ready beef was really a landmark undertaking because prior to that, supermarkets were getting beef in quarters and breaking it down, cutting it up and pricing it in the back rooms of the stores.

"But we decided that didn't make a lot of sense, and we sought to break down meat centrally into block-ready pieces. We set up a prefabricating plant, and we had people coming from all over the world to watch us reduce hanging beef to saw-ready sizes."

Ralphs was operating chainwide with block-ready beef by 1965, he said.

Allumbaugh came by his interest in block-ready beef naturally, since he started in the food business as an apprentice butcher at the age of 12, eventually becoming meat manager for an eight-store chain in Southern California in 1953.

He joined Ralphs in 1958 as director of meat operations and moved up to vice president, store operations, in 1967 and to vice president, marketing, in 1969. In 1971 he was named chief operating officer, and two years later he became Ralphs president.

Allumbaugh was named chairman and chief executive officer in 1976 and held those titles until 1997, when he retired.

With more than two decades as Ralphs' leader, Allumbaugh was regarded by food retailers and suppliers as "the steady hand on the tiller," one observer said. "If you had a question about retailing in California, Byron was the guy to go to."

Allumbaugh said the achievements he is most proud of are the management development program at Ralphs and the stability of the administrative staff there. During the last 20 of his 22 years as CEO, there wasn't a single change in senior management, he said.

Ralphs had a strong management development program, he pointed out, with second- and third-tier management resources available, "and that's apparent today when you look around the industry and see former Ralphs people in key jobs all over the country," Allumbaugh said.

"What I feel particularly good about," he added, "was that Ralphs remained independent throughout the 1980s. We had various owners, but the same management ran the company throughout."

During most of his career, Allumbaugh was active in the Food Marketing Institute, serving as chairman for two-and-a-half terms between 1981 and 1983.

During his tenure, Allumbaugh said FMI was very involved with trade relations "in the sense that retailers, wholesalers and suppliers began talking to each other.

"The industry used to be a group of companies pitted against each other, but in the early days of FMI, due to the leadership of Don Schnuck [another Visionary], we started the process of having joint industry panels involving retailers, wholesalers and manufacturers where we learned how to talk to each other.

"That was a big deal in those days."

Fred Ball

A family-owned retailer that is never afraid to try something new

When in the classic musical "Oklahoma!" a cowboy attempts to wow his neighbors by telling them how "Everything's Up-to-Date in Kansas City," Broadway-slickers Rodgers and Hammerstein were clearly trying to have some fun at the Midwestern metropolis' expense. And yet Fred Ball, currently chairman and chief executive officer, Ball's Food Stores, Kansas City, Kan., has been busy for much of the last half century making sure his supermarkets, which operate under the Price Chopper and Hen House Markets banners (two distinct names for two distinct formats), maintain the leading position they established in the Kansas City metro area nearly 30 years ago by keeping up-to-date with the latest industry trends.

"We think our stores are pretty innovative," Ball told SN. "We've traveled a lot looking at stores across American and other countries, and we've tried to bring some of the good ideas back to the Midwest."

One of the most important ideas has been expanding his stores' perishables offerings. "We saw that happening quite a few years ago," Ball said. "So we moved away from small departments and made those departments large and increased their variety."

However, not all of those ideas have paid off. In the early 1990s, the company began adding franchise fast-food offerings, called Supreme Courts, inside its stores, but the concept fizzled.

"It was an idea that sounded good," said Ball. "It was probably a little before its time. There are franchises that are moving into supermarkets today.

"But it still says a lot about our company because we're willing to try out new ideas. If we lose a little money on it, it doesn't matter that much to us. We're trying to stay up, at least, with our competition."

Ball's Foods was founded by Fred's parents, Sidney and Mollie, who opened their first grocery store in 1923. In 1934, the couple opened a second store that, in an innovation for Kansas City, offered customers lower prices if they paid in cash at the time of purchase, rather than buying on credit and settling up their bills at the end of the month. When Fred joined the company in 1956, it operated four stores. Today, it runs 28 stores, 15 Price Choppers (a price-impact format) and 13 Hen House Markets (a more upscale, service-oriented format), all in the Kansas City region. Fred's son, David, is now president and chief operating officer.

Ball explained that there are several reasons the company never expanded beyond its home base.

"We've always been hands-on merchants," he said. "We need to be in our stores. Because we can give special attention to our stores, they've always performed a little better than if we had stores out where we couldn't reach them and get to them.

"Also, having two formats has made it kind of unnecessary for us to expand. If we'd just stay with Price Chopper, there would have come a time when the region would have been full. But with Hen House, I can put a Hen House in close to one of my Price Chopper stores and still get by with it all right."

Allen I. Bildner

Introduced fresh innovations such as fish on ice

Allen I. Bildner's ability to read and respond to emerging trends that would change how patrons shopped Kings Super Markets led to a shift in marketing from price to quality and service and innovations in fresh food and perishables.

These innovations were showcased at Kings' 40,000-square-foot Short Hills, N. J., store, which opened in 1980. Among unique features that were rare or never before seen in food retailing were: Kings Kitchen where recipes were developed and prepared by an executive chef and his staff for takeout; value-added foods such as cut fruit and vegetables and cored pineapples; ready-to-eat foods sold throughout the store; seafood sold open and displayed on ice; fresh sheet pasta outsourced and then sold cut and fresh in a pasta and cheese department; fresh oranges squeezed into juice on the selling floor; and a cooking school that offered accredited certification of professional chefs.

According to Roy Halstead, PK Halstead Associates, Brussels, Belgium, who consulted on the Short Hills store, Bildner was one of the first in food retailing to envision the importance of quality fresh foods within the conventional supermarket. "Bildner was both food-minded, open-minded and was just in the process of preparing a food-driven supermarket in Short Hills," said Halstead.

Bildner took over the family business, based in West Caldwell, N.J., when his father, Joe, retired in 1956. At the time, Bildner was backed by a 20-year legacy where customers were treated like royalty and offered the lowest prices in town.

While a high respect for customers was retained, quality and service replaced the focus on low price. "What people don't realize even to this day is that customers add to the price equation. The value has to do with the treatment, information and service they receive. Customers add that to the price in making their decisions," said Bildner, now 76 years old.

He methodically and consistently did extensive market research in each of his store locations twice a year over a 20-year period to identify Kings' shoppers and how the retailer stacked up against the competition. He also monitored broader national trends and hired the first vice president of consumer affairs in the industry and established consumer advisory panels in three regions.

Bildner's respect for customers also carried through to Kings' employees. The company instituted behavioral training through norm change strategies. As an employee incentive, Kings distributed 20% of its pretax profits as performance bonuses.

Howard Ross, president, Cook Ross Associates, Silver Spring, Md., also consulted for Kings in developing its corporate culture. Said Ross, "You usually find leaders exceptional in one of three things: They are great with their people; they are really smart about business; or they really work hard. Allen had all three attributes. He was able to combine the business aspect and the people aspect in a powerful way."

Bildner and his wife, Joan, who was a vice president of the company, traveled extensively throughout Europe visiting open markets and various food retailers. "They [European operators] were far ahead of what we were doing in America in merchandising perishables and in the arena of prepared foods," said Bildner. The display of fresh fish on ice at Short Hills was just one idea that came out of those travels.

The performance of the Short Hills unit quickly attracted the attention of the competition. Kings warmly hosted chief executive officers from Safeway, Publix, Stop 'n Shop, Ralphs, Stew Leonard's, Shaw's Markets, Sainsbury, SuperQuinn, Albert Heijn (Ahold) and Wegmans through its store. In those days a network of cooperation among retailers existed, said Bildner, and retailers were much more willing to share ideas.

By 1988 Kings was exceeding industry averages in operating performance.

Kings gross profit, 29.4%, was 5.5% higher than the typical supermarket company polled in the Food Marketing Institute annual surveys. Its weekly sales per square foot was $19.44 compared with $9.87, average sale per customer transaction was $23.48 compared with $16.77, average inventory store turnover was 29.1 times compared with 18.9 times, and its net profit before tax, 2.13% compared with 1.23%.

With 15 stores Bildner sold the company to Marks & Spencer in 1988. He served as FMI chairman from 1986 to 1988.

Said Bildner, "The two most important resources that supermarket companies have are the customers they serve and the people that make up the team."

Charles Butt

Building Texas' largest private company by focusing on quality people and helping them achieve their best

The secret to building the biggest private retail food operation in Texas (in fact, the largest privately held company of any sort there) doesn't involve walking, talking or riding a horse like John Wayne (who, although he became more or less the cinematic embodiment of the Lone Star State, was, in fact, a native of Iowa).

The secret is to hire the best people and let them do the best job they can, according to Charles Butt, chairman of chief executive officer, H.E. Butt Grocery Co., San Antonio.

"We've continued to put our people first, even as we've grown," he said. "We started with a concept of focusing on quality people and helping them achieve their best, and I think our most important achievement is continuing that focus.

"One of the greatest challenges today is continuing to run the business as it grows with much of the same spirit and store-by-store focus that we did when the company was smaller."

The company has grown considerably since it began as a simple country grocery store founded by Charles' grandmother, Florence Butt, in Kerrville, Texas, in 1905.

It was Charles' father, Howard Edward Butt, who after several failed attempts at expansion, gave the company his initials and saw it become, at the time of his death in 1991, a statewide chain of 175 stores.

Charles was named president in 1971 and under his leadership H-E-B is now a 300-store business with an estimated $9.9 billion in sales last year.

Asked how he can maintain the small-company focus with such a big operation, he replied, "We delegate a lot. We push responsibility to levels of the business that allow people that are very close to the firing line to do what's right for the customer."

Along with responsibility, Butt is more than willing to delegate praise.

One of H-E-B's most celebrated achievements of the past decade is the creation of its Central Market format. The first of these stores, which seek to recreate the feel of an outdoor European market, opened in Austin in 1994.

Explaining the format's origin, Butt said, "We wanted to let our folks see what they could do outside of the constraints of the traditional American supermarket, and they really took it and ran with it.

Another recent innovation for the company has been, beginning in 1997, the opening of stores in Mexico. H-E-B now operates 20 stores there and is planning to open a distribution center in Mexico next year.

Butt seemed to want to credit the success of these units to their customers.

"We're very excited about our business in Mexico," he said. "We are continuing to grow down there. It's highly competitive, but a wonderful market. People still eat at home there, a lot more than they do in the States. It's a culture very rich in tradition and family life."

Jack Crocker

The Fred Meyer and Supervalu veteran helped lead food distribution into the modern era of efficiency and lower fees

Jack Crocker learned the grocery business from a master and subsequently made his own major imprint on the industry.

Crocker was a longtime top aide to Fred Meyer, the founder of Fred Meyer Inc., Portland, Ore., before becoming president of that company in 1967. Meyer never got beyond grade school, but Crocker found him to be a brilliant retailer and teacher.

"The most important thing he gave me was a strong belief in the free enterprise system and competitive marketplace," Crocker told SN. "He instilled in me that the benefits of our achievements would be for the citizens and consumers."

Crocker took his knowledge to Supervalu, Minneapolis, which he led from 1973 to 1982.

It was at Supervalu that Crocker encountered major changes shaking the food-wholesale business on the competitive and efficiency fronts.

He recognized the need for wholesalers to improve productivity. Decades before the industry's Efficient Consumer Response initiative, he hired a government expert on efficiency to drive change at Supervalu, a move that enabled the wholesaler to lower fees to customers at a time when some other companies were raising fees, Crocker said.

He was also known for reinvesting capital in the business despite some calls to instead raise dividends. "Because of the reinvestment we were able to enlarge distribution centers, acquire larger trucks and trailers, and make investments in technology," he said. Perhaps his greatest contribution was successfully energizing independent retailers, who were battling large retail chains. "I got them to believe they could compete with chains," he said.

Crocker's track record at food-distribution companies would in itself qualify him as an industry visionary, but his resume also shows years of industry service through major associations. He was the first elected chairman of the Food Marketing Institute, a post he held from 1977 to 1979. In that position he helped to hold together the diverse retail factions of the young organization. During his term, FMI worked on improving the industry's image with consumers, the media, government and other entities, and also explored the best ways for the industry to benefit from changes in technology.

Crocker was a recipient of FMI's Sidney R. Rabb Award, the National American Wholesale Grocers Association's Herbert Hoover Award and the Grocery Manufacturers of America's Hall of Achievement Award. Crocker's most lasting legacy at Supervalu is his successors. He hired Mike Wright, who followed as chief executive, and was also involved in the hiring and career advancement of current CEO Jeff Noddle, a Supervalu veteran, who was hired during Crocker's tenure for his retail background. "Jack realized there weren't people with retail experience in this wholesale company, so he brought those people in," Noddle recalled. "In that way he changed the face and direction of the company. He was an innate businessman."

Michael J. Cullen

He paddled his own canoe and brought the supermarket into the modern era and implemented mass merchandising

"A tradition of giving is part of King Kullen's history," reads copy for a full-page Thanksgiving newspaper ad. Half of the ad is devoted to a photo of founder Michael J. Cullen who is pictured handing out food baskets to the needy.

Thomas K. Cullen, who is a grandson of the late founder and is King Kullen's vice president of government and industry relations, said that more than anything, giving back to the community sums up what the man who invented super marketing has passed down through three generations of Cullen family members.

Asked how much King Kullen donates annually to numerous Long Island charities and civic endeavors, "It's more than we can deduct from our taxes," Thomas replied.

While Cullen, who opened his first store in Jamaica, N.Y., in 1930, predates SN food-retailing Visionaries of the last 50 years, he is given credit for coming up with the concept for the first modern supermarket and implementing mass merchandising. Also the business has thrived for 72 years under the operation of three generations of Cullen family members, which is becoming more of a rarity in a merger-driven climate. Today, 13 family members run the 49-unit chain of which two stores -- Wild by Nature -- are run under a separate division.

Family executives running the company are: John B. Cullen, a son of the founder, and Bernard D. Kennedy, a cousin of Thomas, hold co-chairman and co-chief executive officer titles. Thomas's brother Brian C. Cullen and J.D. Kennedy hold co-president and co-chief operating officer titles.

As Thomas explained, it was sometime in the '80s when a running debate was settled as to who founded the first supermarket. It was between Clarence Saunders of Piggly Wiggly and Cullen. The H.J. Heinz Co. sponsored a study on the subject and submitted historical documentation to the Smithsonian Institution.

According to Terry Sharrer of the Smithsonian, King Kullen was the supermarket to fulfill all five criteria that defines today's modern supermarket: separate departments; self-service; discount pricing; chain marketing; and volume dealing. Although each of these elements existed before King Kullen, it was Michael who had the vision to successfully combine them.

After working for various retailers, including A&P and Kroger, for more than 20 years, Michael proposed his plan for the modern supermarket to his employers. Neither A&P nor Kroger was interested. He then decided to launch his concept on his own during the depression and it took off.

In 1936, Michael was stricken with peritonitis following an appendectomy and died at age 52. But in six short years he had grown King Kullen into a $6 million company with 17 stores in New York City and on Long Island. In 2001, King Kullen's revenues were $782 million, according to Hoover's. The company employs about 4,800 people.

What Michael gave to his customers was a new way of shopping that was both convenient (with all goods sold openly in one place) and affordable. Quoted in a newspaper article in 1933, Michael said, "These are tough times, and I am on the level when I say I will do more than any other man in this country to save the American people money. I am making it possible for hundreds of thousands of people to get all they want to eat. I am just going to paddle my own canoe and give people a break."

After Michael J. Cullen's death, his widow, Nan, and son, James A. Cullen, who was Thomas's father; Nan's brother, J.P. Danaher; and her brother-in-law, J. Donald Kennedy, ran the business.

In terms of reputation today, King Kullen is known not solely for its competitive prices but also for its excellent customer service and well-run and clean stores, said Thomas. "We are a local, regional chain that continues to do well in this marketplace. I can't predict what the future will bear, but we'll be here."

James Ellsworth Davis

His astute financial mind steered Winn-Dixie to profitable growth

Called by his first two initials, J.E. Davis was the financial man among four brothers who helped build Winn-Dixie Stores, Jacksonville, Fla., into a large food-retailing enterprise. He was known to have an astute grasp on financial issues. At the close of board meetings he'd ask directors their thoughts on the state of the economy, according to one media source. Herman Lay, founder of Lay's potato chips, called J.E. "one of the greatest financial geniuses I have known."

Born in Henderson, Ark., in 1907, J.E. came from a family that ran trading posts from the late 1800s to early 1900s, and a department store in Burley, Idaho. When the department store failed, J.E.'s father, William M. Davis, followed his brother to Florida and bought the Rockmoor Grocery store in Lemon City, Fla., near Miami, in 1925, where J.E. did the bookkeeping. Two years later with five stores, the company was renamed Table Supply -- the forerunner to Winn-Dixie.

It was with the sudden death of William Davis, at age 54, in 1934 that his four sons -- A.D., J.E., M. Austin and Tine W. -- assumed active management of the company.

In commenting on the different personalities of each brother, J.E. said, "I'm the conservative element, the long-range planner."

As treasurer, J.E. took on the financial management role. With his background in accounting, early experience in keeping the company books and purchasing all types of commodities, as well as his natural bent for figures, J.E. was well prepared to grow the company. He eventually became chairman of the board, the only one of the brothers to hold that title. He stepped down as chairman in 1983 but continued to serve as a board member until his death in 1993 at age 85. When the company purchased 117 Dixie Home Stores in South and North Carolina and Georgia in 1955, the Winn & Lovett name was changed to Winn-Dixie Stores. "To win Dixie was our ambition," said J.E.

The company continued to grow by acquisitions. At the end of the '70s, its economic picture was strong. J.E. was most responsible for "a combination of conservative financial and operating policies, stressing performance, productivity, employee stock ownership and aggressive political activity, that enabled the company to increase net profits every year since 1940 and maintain a return-on-invest capital of 18% to 20% for most of the years it had operated publicly. This profitability was one of the highest of all the nation's retail companies, not just supermarket firms," the company stated in a 75th anniversary publication in 2000.

J.E. was involved with many philanthropic efforts, including getting the renowned Mayo Clinic, Rochester, Minn., to open a clinic in Florida, and he was a big supporter of minority education. In 1990 he wrote a book, "Don't Make A&P Mad."

Ned N. Fleming

Believing in the power of the independent retailer

Ned N. Fleming never doubted the power of the independent retailer to succeed, even in the face of rapid growth by the supermarket chains in the 1950s and '60s.

"There was no inferiority complex about the independent in our founder, and there was none in Ned Fleming," said Thomas S. Haggai, chairman and chief executive officer, IGA, Chicago. As one of the major distributors to IGA stores, Fleming helped that organization grow by continuously recruiting new retailers and converting them to the IGA banner.

"He was going against the trend then because wholesalers tended to look at retailers as just the outlet for the goods they had in the warehouse, but he was one of the early companies to have full programs of support," Haggai said.

Ned Fleming joined Fleming Cos., now based in Dallas, in 1921 and became president in 1945. He became chairman and CEO in 1964, and in 1981 he became honorary chairman. He died in 1990 at age 90.

Under his tenure, the company, which was founded by his father, O.A. Fleming, grew to become the largest wholesale food distributor in the country, supplying more than 5,200 stores in 36 states.

"He was a real visionary in that he saw the force that the independent could have in the industry, and he worked on that with them," said Steve Davis, executive vice president, Fleming Cos., who worked under Ned Fleming in the 1960s and 1970s. "He was a big investor in the independent, to see that they remodeled and grew."

A handsome, debonair man with a charismatic presence, Fleming was a quiet leader who could be depended upon to over-deliver on his promises, Haggai said.

"When he spoke, he could rally the people around him with simple, logical statements," he said.

One of Ned Fleming's primary objectives was to keep the cost of doing business low.

"He was a leader who expected us to have very low-cost distribution in order that the customer could succeed," said Davis.

Dick Katzenbach, who worked with Ned Fleming for 13 years before retiring as president of Fleming Foods in 1979, agreed.

"He was all for automation and being efficient," Katzenbach said. "He realized that everywhere you could take out a half cent, it would multiply and you would save a lot more down the line."

He also recalled Fleming as being a great leader with a strict attention to detail, who often took a hands-on approach to the company's challenges.

Ned Fleming always put the customer first, and he preached the message to his employees that if they took care of the customer, the company would succeed. He had a remarkable capacity for catering to the needs of his individual customers, and put their success ahead of his own short-term profits, knowing that successful customers would sustain his company in the long term.

"When we could have taken more in earnings, he was investing in the future," Davis said.

Lou Fox

The king of backhaul goes to Congress

Lou Fox, who spent most of his career with Kansas City, Kan.-based Associated Wholesale Grocers, made his strongest mark on the industry in the fight for backhaul legislation.

"Lou was known as the king of backhaul," one industry contemporary told SN. "That was his main project, and he worked on it incessantly. He always said it was crazy to have trucks all over the country coming back empty as they passed by manufacturer facilities."

According to Robert O Aders, founding chairman of the Food Marketing Institute, "Backhaul was an issue that was near and dear to Lou's heart because it meant real dollars-and-cents for AWG in terms of the efficiency of its fleet of tractors. Not permitting them to backhaul merchandise was money out of his members' pockets.

Backhaul is a practice in which distributors with empty trucks pick up merchandise from manufacturers' warehouses on their way back from delivering orders, with manufacturers paying them a fee equal to the amount they would otherwise have paid a common carrier to deliver the merchandise -- a practice that was ruled illegal by the Federal Trade Commission in 1967 and again in 1975 because it raised the specter of possible price discrimination.

"Lou was the only guy I know who celebrated the fuel crisis in the early 1970s because he said it would force the government to accept backhaul in order to conserve fuel," Aders told SN.

Fox believed in backhauls, explaining, "We documented what freedom of the nation's food distributors to backhaul would contribute to our economy: 100 million gallons of fuel saved per year; 500 million miles of less travel on our streets and highways per year; a reduction in the number of trucks traveling empty; and $330 million saved, which would reduce food costs to the customer."

According to Fred Ball, AWG chairman and chairman of Ball's Food Stores, Kansas City, Kan., "We were shipping groceries in all directions from [AWG headquarters in] Kansas City, with all those opportunities to pick up loads from manufacturers in Iowa or Missouri, but we were not allowed to do it. So Lou went to Congress and made his points, and he's the guy who got backhaul approved. After that, we were able to keep trucks full both ways."

Fox spent years talking with manufacturers, testifying before Congress and fighting with the Grocery Manufacturers of America, which opposed backhaul legislation. He saw his dreams realized in June 1980 when President Carter signed a truck deregulation bill into law.

As in his dealings on backhaul, Fox was a strong-willed force in whatever he did. "He was an in-your-face kind of guy who was just what the independents at AWG needed," Aders said.

Fox retired from AWG in 1983 and was named honorary chairman of the board -- a title he held until his death at age 79 in 1997.

"He was an honest, fair and trustworthy person," Ball recalled. "And he was highly respected by the members. He was like a King Solomon in the way he made business decisions. If two members had a conflict, Lou was able to resolve it so both people were happy by taking a big problem and breaking it down into little problems and then solving those."

Tom Haggai

Instilling spiritual leadership to food retailing, he led IGA to international growth

Tom Haggai regards his leadership of IGA as a ministry.

"Leading IGA is a very personal way for me to serve God," Haggai told SN.

Haggai comes by his tendency to see things in religious terms naturally. He's the son of a minister, and he himself is a minister who was an inspirational speaker at IGA meetings for years before he was asked to become chairman in 1976 "because of my strong commitment to family ownership," he said.

Besides serving as chairman, he has also served as president and chief executive officer since 1986.

According to Drayton McLane, chairman and CEO of McLane Group, Temple, Texas, "Retailing requires passion, and Tom is a passionate person. When he became IGA chairman, he saw that the company was not moving forward and that there was very little trust between the retailers and the wholesalers.

"But he changed that by the force of his personality. I like to call him the Billy Graham of the grocery business because his uplifting vision and high standards breathed life back into IGA."

IGA today is vibrant, with sales this year expected to hit $24 billion, including $8 billion from IGA retailers in the United States, $6 billion from IGA retailers in Canada and $10 billion from retailers in 41 countries overseas.

"The only two growth operators in the industry today are Wal-Mart and IGA," Haggai pointed out.

Since 1980 IGA has benefitted tremendously from its international growth, Haggai noted. "It's my feeling that the birth and growth of IGA International stabilized IGA USA and actually triggered our present momentum," he told SN.

On the domestic front, IGA has been working to strengthen its operations on many levels.

One of the first programs IGA developed under Haggai's watch was Hometown Proud, which stresses the community ties of each IGA store. "In a year like this, where people want to go to stores where they feel a sense of belonging, Hometown Proud has been the key that identifies us as part of the community, and that, as much as anything, has accounted for a lift in our sales," Haggai explained.

IGA also tackled the issue of raising store standards under Haggai. "One member would build a beautiful store with the IGA banner on it, and one town over there'd be a dirty IGA store that diminished the image the first store was projecting, so we set about establishing better store standards," he explained.

"Another problem we encountered was the paternal attitude by our distribution companies, who were disregarding the stores' desires and pushing their programs on them, so we set out to shift from that push-through approach to a pull-through in which product decisions were made within each community."

Another challenge, Haggai recalled, was an inability to measure IGA members' sales accurately. "But with the help of ACNielsen, we've been able to measure the members' volume like any retail group, which has enabled us to demonstrate our sales power," he said. "As a result, manufacturers understand what part of the business we represent, and they are much more interested in working with us on special programs."

IGA's international growth developed without any specific master plan, Haggai pointed out. "We just kept being introduced by people in one country to representatives from another country, and in the process we've been invited by a company or government to come into each of the 41 countries we're in, which gives us a great entry position."

Acknowledging the contributions Haggai has made over the years, IGA established an annual award in his name in 2001, calling him "the cornerstone of the IGA system for more than 30 years. "Dr. Haggai has championed the philosophy of giving back to the individual as well as the community. Through his dynamic leadership and personal example, IGA has become synonymous with community involvement, commitment and growth, and Dr. Haggai himself symbolizes the Hometown Proud spirit and commitment."



Joseph B. Hall ran Kroger Co. like he drove his car: at full throttle.

"Joe was a little hard to keep up with because he drove a Thunderbird hardtop as fast as you can drive in Cincinnati," recalled Robert Aders, who worked under Hall at Kroger for seven years and later became the company's chairman. "I really liked the guy."

It might be difficult to think of Kroger as a struggling collection of mom-and-pop corner grocery stores, but that's exactly what it was before Hall overhauled the company and laid the foundation for it to evolve into a national supermarket titan.

A real estate expert who was hired in 1931 to help Cincinnati-based Kroger shed some unprofitable leases, Hall trained himself in the grocery business by working in stores, and, after regional management positions and a stint as vice president of manufacturing, was named Kroger's president and chief executive officer in 1946. He leveraged his real estate background and the expertise of some carefully chosen executive partners to expand Kroger into a modern, multifaceted corporation.

"His capacity was for organizing and directing a very complicated, diverse retailing, manufacturing, wholesaling and warehousing operation, and then knowing how to expand, and doing it successfully," said Aders.

Known for his no-nonsense, direct style of communication, Hall surrounded himself with capable people to help steer the company into the supermarket era. When he became president, he hired financial expert John Lockhart and attorney/politician Jacob E. Davis and embarked on a string of acquisitions that brought Kroger into several new markets, including locations in Wisconsin, Minnesota, Louisiana and Texas.

He used the acquisitions as beachheads for expansion, and developed rapidly in those markets with new supermarkets during the 1950s, when the industry was young and growing. By the time he retired in 1964, Hall had quadrupled the company's sales to $2.3 billion. In the meantime, he eliminated hundreds of Kroger's smaller corner grocery stores, taking the chain from 2,600 tiny sites in the Midwest and South in 1946 to 1,400 full-sized supermarkets in 1964.

"By the 1960s, the industry had matured, but he saw what was coming," said Aders.

He credited Hall with helping Kroger grow its food-processing business as well as its retail presence.

"He built a very strong manufacturing operation, with a number of bakeries and ice cream plants," Aders explained. "So, he had a very comprehensive view of how the business ought to be built and managed."

According to local press reports, under Hall's direction the company merged 49 different private-label brands into one -- the Kroger brand -- which allowed for more efficient promotion.

Hall also restructured the company's board of directors, replacing many of the local Cincinnati business leaders with others from the company's newer market areas.

He also was credited with steering Kroger into the prescription drug business by acquiring a New Jersey pharmacy company, and with it, future Kroger President James Herring.



In the 17th century, the Dutch sailed the world in search of trading opportunities, founding colonies in such far-flung locales as Indonesia, Sri Lanka, Surinam and, of course, New York.

The same mercantile spirit is what sent Albert Heijn, then the president and chief executive officer of the Netherlands-based supermarket chain that bears his name (and that of his grandfather, its founder), to cross the Atlantic in 1977 and acquire Bi-Lo, Greenville, S.C., the first of its U.S. operating companies.

Ahold -- a contraction of Albert Heijn Holding Co. -- has since acquired five other U.S. chains: Bruno's Supermarkets, Birmingham, Ala.; Giant Food, Landover, Md.; Giant Food Stores, Carlisle, Pa.; Stop & Shop Supermarket Co., Quincy, Mass.; and Top's Markets, Buffalo, N.Y.

"Holland as a country is unique," explained Allen Noddle to SN. Noddle had been president and CEO of Giant (Landover) when it was acquired by Ahold in 1981, and he stayed with the Dutch retailer until 2000, when he retired as a board member and executive vice president responsible for company operations in Asia and Latin America.

"The Dutch are born with the broad perspective of world traders," he continued. "If you go back in history, they were traders in spices, in textiles, in oil.

"Well, Ahold had become so successful -- they had a customer-base of 15 million people and hundreds and hundreds of stores -- they quickly reached the saturation point.

"So they decided to go to the United States. That was a huge move for a European company, and they looked for something they were familiar with, which was smaller stores, without a lot of bakeries or delis. In those days, Albert Heijn advertised itself as the basic corner grocer.

"Once the company got to the U.S. and learned the people and the culture, they decided to decentralize the organization. They couldn't run it from Holland. They let a lot of autonomy and control rest in the local operating company, and the rest is history.

"Albert Heijn was a very unusual person. A third generation grocer, he ran the company with his brother, until his brother met a tragic death in a kidnapping in 1983.

"Albert Heijn carried on and represented the company throughout the world, despite the fact that he was handicapped by polio as a young man. He was an ambassador of goodwill not only for the company, but for Holland as well. He served on the Food Marketing Institute board of directors for years and years and years."

Heijn retired from Ahold in 1989 and currently divides his time between Amsterdam and a country house in England.



At age 81, Thomas Infusino has brought just over 30 years of stability and longevity to the Wakefern Food Corp., Elizabeth, N.J.

"Our objective has always been the same," Infusion told SN. "How do we move Wakefern ahead and protect the independent retailer?"

That goal has often been challenged by competitive threats in the Northeast region where 38 Wakefern members operate mostly under the ShopRite and PriceRite banners.

Infusino, who still operates Nutley Park ShopRite, opened his first store in Newark, N.J., with his brother in 1946. It was a time when the economy was changing from war to peace time and retail competition in the area became fierce with the lifting of government price controls and the likes of A&P, Acme and Food Fair. Infusino recalled that retail prices on products at an Acme store directly across the street from his store were the same as the wholesale price he was paying for products. "That was the driving force behind Wakefern," he explained.

Wakefern was formed in 1946 by seven grocers -- Louis Weiss, Sam and Al Aidekman, Abe Kesselman, Dave Fern, Sam Garb and Albert Goldberg -- who began ordering as a group to get better prices.

Infusino joined Wakefern in the early days, and served on its board during a troublesome period in Wakefern's history. In 1966, Supermarkets General, which later named its stores Pathmark, was the cooperative's largest member. They decided to pull out of Wakefern due to contention among the membership over control of the organization.

At the time, it was decided to change the co-op structure to a democratic model that granted one vote to each member regardless of the company's size or number of stores. In 1971, Infusino was named chairman and chief executive officer of Wakefern. In his leadership position, Infusino strengthened and built the membership into a retailing and distribution force. Since 1995, 20 new members have joined the organization. In 2001, the retail subsidiary produced $7.3 billion in revenue and the wholesale/warehouse operation generated $5.9 billion in revenue. Today, Wakefern serves approximately 213 stores in New Jersey, New York, Connecticut, Pennsylvania, Delaware, Rhode Island and Massachusetts. Wakefern owns 35 stores.

According to Mark Laurenti, president of Laurenti Family Market's, a co-op member in Bethlehem, Penn., "As chairman of Wakefern's board, Infusion has been instrumental in going through very difficult times and still leading the cooperative in steady growth."

One of the best decisions the cooperative made in 1958, said Infusino, was to forego trading stamp programs that were popular at the time and become low-price leaders. "That philosophy has never changed, and it would not be possible without the structure of the cooperative." he said.

In a move that echoed the 1966 exit of its largest member, Wakefern was recently challenged by the potential pullout of another large, longtime member, Big V Supermarkets, Florida, N.Y., when it tried to switch suppliers and break its contract with Wakefern in a Chapter 11 reorganization. After a court battle, Wakefern emerged the winner with 27 Big V stores that it is in the process of upgrading.

Of that challenge, Infusino said, "Big V was very important to us because they probably represented $800 to $900 million of our volume. It was important not to lose it. Now we will run those stores. It's a challenge and an opportunity. There is no question in my mind we'll be successful. We have no other choice."



The history of food retailing in the United States is filled with larger-than-life personalities, but there's one that filled the entire Southeast with his presence.

George Jenkins, founder and chairman emeritus, Publix Super Markets, Lakeland, Fla., created a regional supermarket powerhouse by giving his employees a reason to care about the company and its customers.

"He was very thoughtful to his own personnel, and of course it filtered down to the customer," said Ken Olsen, a personal friend of Jenkins and the retired president and chief executive officer of Arcadia, Calif.-based Vons. He described Jenkins as "one of the real dynamos in our business."

Michael O'Connor, the former president of the Supermarket Institute who often called upon Jenkins' retailing expertise for industry initiatives around the globe, recalled Jenkins as "a great internal good citizen with his people."

From the time Jenkins opened his first Publix Food Store in Winter Haven, Fla., in 1930, he involved his employees as partners in the business, according to his nephew, Charles Jenkins Jr., the current chief executive officer.

"He believed in people who worked in the store having an ownership position in the company," said the younger Jenkins, who began his career with Publix in 1970. "At the time he opened his first store, he arranged for key people to each be able to buy one share of stock."

Jenkins instituted a profit-sharing plan in 1952, and formalized their ownership stake through the introduction of the employee stock ownership plan (ESOP) in 1975, well before ESOPs gained widespread popularity. Today the ESOP holds the largest single ownership stake in Publix. Full-time employees and members of the board of directors are the only people who can purchase stock in the company, which has more than 725 stores in five Southeastern states and annual revenues of more than $15 billion. It is the country's largest employee-owned supermarket company.

Jenkins also made sure that his employees had the right environment to please the chain's customers. When he opened a state-of-the-art supermarket in 1940, it contained a host of newfangled amenities that shoppers take for granted today, including automatic doors, air conditioning, fluorescent lighting, frozen-food cases and piped-in music. The art-deco store also included a doughnut counter and flower shop, along with wide aisles that helped support his motto that "The customer is Queen."

Like Stew Leonard, the founder of the eponymous grocery stores in the Northeast, Jenkins had two rules for customer service: No. 1, the customer is always right, and No. 2, see Rule No. 1. That approach, said Charles Jenkins, is reflected in the guarantee policy that the elder Jenkins introduced and is still used today: "No sale is complete until the meal is eaten and enjoyed," meaning that stores will refund a customer's money for any product, even if cooked and half-eaten.

George died in 1996 at age 88, and was said to be still visiting stores and talking with employees right up until the week of his death.

"His legacy is very much with us," said the younger Jenkins. "He's still popular with the associates."



The definition of a visionary to 82-year-old Ralph Ketner, the co-founder of Food Lion, Salisbury, N.C., is "someone who has ideas and the guts to do them."

Ketner not only had ideas and guts when it came to growing Food Lion, but he has the God-given talent of arithmetic. Said Everett Suddreth, executive vice president of the North Carolina Food Dealers Association, Charlotte, N.C., "He can add up a line of figures nine across and nine down in his head." These attributes served Ketner and Food Lion well. Ketner even wrote a book titled, "Five Fast Pennies," on how he grew the company. Ralph Ketner and his brother, Brown, and friend Wilson Smith started Food Town in 1957. The former Winn-Dixie employees raised enough money from 125 investors to buy Food Town's first store. Some bought into the company for as little as $50, recalled Ketner, adding that the $50 investment turned into $1.7 million.

Ketner's claim to retailing fame was instituting everyday low prices, or what he called LFPINC -- Lowest Food Prices in North Carolina. Partner Wilson Smith recalls that Ketner locked himself up in a motel room for several days to figure out the ramifications of reducing prices on about 5,000 items.

"I bet the company in 1967 with the low-price concept," said Ketner. He had to increase sales by 50% to break even or else go bankrupt. At the time, Food Town consisted of seven stores that generated $5 million in sales a year.

Ketner's LFPINC took off. Containing costs through centralized buying became the key to making the low-price strategy work. "Anytime you buy from a wholesaler, you buy their inefficiencies," Ketner told SN.

Sales increased rapidly, jumping from 35% in 1968 to 71% in 1969 and 46% in 1970 when the company went public and volume reached $22.4 million.

Said Ketner, "I kept cutting prices and one year I wondered what there was left to cut." Ketner found the cuts in states' sales tax of 3% to 4% in North and South Carolina and Virginia. He reduced the taxes to customers by 1% and paid the 1% that totaled $100,000 a week or $5.2 million a year. If sales increased 10%, Ketner would break even on the sales tax promotion. While the tax reduction boosted sales, it was short-lived. State officials cited it as illegal. Other incentives Ketner came up with were drug prescriptions filled at cost and gasoline pumped at cost if customers showed proof of Food Town patronage.

In 1974 the stock market was on a slide and Food Town stock was at $13 a share. Ketner received a letter from a company asking him if he'd be interested in selling a third of his investment in the company. The Brussels-based Delhaize Group paid Ketner $26 a share for a 34.5% stake in Food Town, making Ketner a millionaire.

In 1976 Delhaize increased its stake in the company to 51%, gaining control of the corporation.

"I never had an argument the entire time I ran the company," said Ketner, who resigned from the board in 1993 at a time when the company was under fire from ABC's "PrimeTime Live" broadcast on unsanitary practices.

Food Town was renamed Food Lion in 1983, said Smith, when Ketner ran into competition with retailers in other states using the same banner. At the time, Ketner told associates they could change the name and only have to change two letters. It was that devotion to efficiency combined with risk taking that made Ketner a food retailing leader.

During his tenure with the company Ketner served as president of Food Lion from 1957 to 1981, as chief executive officer from 1981 to 1985, as chairman of the board from 1957 to 1990 and as a director since 1957.

"No company has ever grown like Food Lion and never will because you need to start with a zero base, which is what we did," said Ketner.



Robert Magowan came to Safeway as chairman and chief executive officer in 1955 with a mandate to restore profitability to the chain.

He fulfilled the mandate, primarily by decentralizing operations and cutting costs.

One of Magowan's first moves was to give division managers full responsibility for merchandising, pricing and advertising -- a radical idea at Safeway then.

"I don't know anything about the grocery business, but you fellows do," he said at the company's first management meeting. "From now on, you're running your division as if it were your own business. You don't take orders from anyone but me, and I'm not going to give you orders. I'm just going to hold you responsible."

Speaking with SN, Peter Magowan, Robert Magowan's son -- who served as Safeway CEO from 1980 through 1993 and is currently president and managing general partner of the San Francisco Giants -- said, "My father always cared a lot about the views of store managers -- and produce managers and meat managers, for that matter -- because he believed in decentralized management, with as much power as possible going down as low as possible, because he felt store managers were closest to customers and should have as much authority as possible.

"Instead of relying on what people told him at staff meetings, he liked to visit the stores to talk to the managers for himself and find out what they were concerned about -- whether it was late deliveries or the quality of the produce they were selling -- and when he found something wrong, he raised hell about it at the next staff meeting."

Magowan also reversed many longstanding Safeway policies, including the following:

Freeing divisions from meeting every single competitor's price and allowing them simply to offer competitive prices.

Leaving it up to the divisions whether or not they stocked or ignored Safeway private-label items. "Our job is to give the customer what she wants, not try to tell her what she should want," Magowan explained.

Allowing divisions to obtain national brands from existing channels other than Safeway's central distribution system, which had been adding a handling charge to deliveries from the warehouse to the divisions.

Incentivizing managers with bonuses based on the results they produced.

In addition, Magowan oversaw the combining and consolidation of 14 supply divisions down to seven; the reduction of manufacturing and processing companies from 50 to 29; and the reduction of 225 private-label brands down to 100.

The result of his reforms was that Safeway profits began to grow. In 1954, the year before Magowan joined Safeway, net profits were 0.8% -- the lowest return of any major food chain that year. However, by 1958 Safeway had earnings of 1.5%, the highest among the major chains, and Safeway remained among the industry leaders until Magowan's retirement in 1971.

Magowan took an active part in operations by having one Safeway division -- the Washington, D.C., division -- report directly to him "as a way to keep his fingers directly in the decision-making process," Peter Magowan recalled.

He also liked calling his executives at any time the whim struck him. "You just can't operate in an orderly fashion around this man," one executive told Forbes in 1963. "He'll pop into your office at any time and ask what you think about this problem [or] what we should do about that problem.

"[But] he never tells you what to do. He just tells you to do something. And you have to be prepared to lay aside whatever you are working on and do it."

Magowan was also in the habit of sending letters to managers for positive or negative accomplishments, which he typed himself on an electric typewriter at his desk. Accompanying each letter of praise was one share of Safeway stock.

It was during Magowan's tenure that Safeway became the first and only U.S. food retailer to open stores outside the United States -- in the United Kingdom, West Germany and Australia.

According to Peter Magowan, his father helped promote American supermarket methods abroad, particularly to the United Kingdom. "Safeway introduced a lot of concepts that are now accepted there, including refrigerated produce racking, checkout procedures, meat wrapping, the introduction of general merchandise and health and beauty aids, and centralized distribution," he said.

Robert Magowan died in 1985 at the age of 82.



In 1962, Hendrik Meijer and his son Fred opened a store in Grand Rapids, Mich., that would alter the course of American retailing. Offering both food and general merchandise, Thrifty Acres was a pioneer supercenter, one of the first U.S. stores to successfully offer such a wide range of goods.

In a recent interview with SN, Fred Meijer, now the chairman emeritus of the company that bears his family's name (his sons, Doug and Hank, are the company's co-chairmen), made it clear he and his father were constantly reinventing their new format in its early years of operation.

"It's a whole series of almost accidents," he said, "but that's kind of the way it evolved.

Hendrik, a barber turned grocer, had opened Meijer's Grocery in 1934 in Greenville, Mich. Fred was with him from the start, originally as a bagger. In the early 1960s, the Meijers had 14 food stores in western Michigan. They also had their eyes on developments in the retail business. "We saw all this turning in the industry, and we thought, 'Somebody's going to be successful,"' Fred recalled.

That success, however, did not come immediately. Meijer said he asked a consultant if the combined grocery-general merchandise could work. "I have a five-page handwritten document from him," Meijer noted. "He said, 'No way you're going to make it work."'

Meijer explained that the way many of the discount stores operated then was by leasing departments.

"You had the building and you could run whatever you wanted, the grocery store, the drug store, but you could lease out all the soft goods," he said.

So the Meijers ran the grocery and drug store operations, along with the front-end checkout. The leaseholders ran the other departments.

"The people in the leased departments didn't work for us, but the customer didn't know the difference," Meijer said. "We could see we weren't getting anywhere at all, and we could see that the customers weren't being treated right."

Finally, one day Meijer saw a man trying to return a gallon of paint to one of the leased departments. The sales clerk asked the man if he had bought the paint. When the man replied that his wife had made the purchase, the clerk told him then his wife would have come back to the store to return it.

"By the end of 1963, we had taken over several departments," Meijer said. "We had a clause in the lease that said if we paid for their merchandise and for the depreciated value of the fixtures, we could buy out the leaseholders.

"That was a very fortunate clause, because if we hadn't been able to buy them out we would have been out of business."

Today, Meijer -- the company, not the man -- operates 156 stores, some as large as 250,000 square feet. Typically, these units have 40 departments featuring more than 120,000 items. Last year, the company racked up an estimated $10.6 billion in sales.

Meijer attributed his success to good customer service. Remembering the discount stores he competed with in the early 1960s, he said the reason nearly all of them have vanished from the retail scene was "the way they were treating their customers. You don't have to have much brains to know when your customers aren't getting treated right. My competitors weren't honoring their ads. They had shoddy merchandise. They ran out of stock.

"Anybody could have done it better."

Perhaps, but few did, and one of those few was Meijer.



TAGS: Kroger News