PLEASANTON, Calif. — Analysts said Safeway here “has some big shoes to fill” in the wake of last week’s announcement that longtime Chairman and Chief Executive Officer Steve Burd plans to retire in May.
“Burd’s departure is, potentially, a significant loss for the company,” said John Heinbockel, an analyst at Guggenheim Securities, New York. “We rarely make this statement about a CEO, but Mr. Burd is unique for his longevity [20 years], attention to detail and forceful personality. Perhaps no non-apparel retailing CEO has put his stamp on a company to the same degree that he has.”
Safeway said Burd, 63, plans to step down at the company’s annual meeting on May 14. He is also retiring as director. Burd had relinquished the president post in 2012.
The company’s board of directors will begin a search for a successor, and will consider both internal and external candidates for the job. Safeway also said Burd will help with the search and will continue to assist the company after he transitions out of his leadership posts.
“I feel this is the right time to move forward with a transition plan,” said Burd in a prepared release. “The company is gaining market share with each passing quarter. We have developed the most sophisticated digital marketing platform in retail, we are implementing the most comprehensive and personalized fuel loyalty program, and we will be rolling out a wellness initiative that has the potential to transform the company.
“While I still have the high level of energy and enthusiasm I brought to the company 20 years ago,” he added, “I need more personal time and, given my extensive work in health care, I want to pursue that interest further.”
Several Major Initiatives
Safeway was in the midst of several major initiatives, including ramping up the use of its new Just For U personalized, digital market platform; introducing a new health care initiative, the details of which have yet to be disclosed; and preparing for the possible spin-off of its Blackhawk gift card business.
Heinbockel said he “does not see this transition meaningfully impacting the company’s strategic direction or actions,” although he and others did say the announcement caught them by surprise.
Deborah Weinswig, an analyst with Citigroup, New York, noted that Burd’s planned departure means that the company is searching for both a CEO and a chief financial officer. The current interim CFO, Robert Edwards, succeeded Burd as president last year and is considered a leading internal candidate to succeed him as CEO.
“Burd has helmed the company for two decades, and we are concerned that his departure creates a difficult gap to fill,” she said in a research note. “However, we believe he leaves Safeway well positioned to see accelerating top-line growth in 2013 as Just For U continues to gain traction.”
Other candidates to succeed Burd as CEO include Bill Tauscher, CEO of Blackhawk and “a very knowledgeable retailer,” said Heinbockel.
Safeway Lists Burd's Achievements
Safeway cited among Burd’s achievements in his two decades at the helm:
• Establishing a “culture of thrift and capital discipline.”
• Developing the “Lifestyle” store format.
• Forming a prepaid payment network — Blackhawk — that has become one of the largest distributors of gift cards in the world.
He also accelerated Safeway’s efforts in charitable giving and sustainability, the company said, and led Safeway to become “one of the nation’s most recognized leaders in health care” through its innovative insurance and wellness programs.
“Steve has been an iconic leader and is one of the industry’s most innovative CEOs,” said Gary Rogers, the company’s lead independent director. “He will be very difficult to replace. As he moves to the next phase of his career, we hope to continue to leverage his input and assistance as the company moves ahead with its exciting new programs.”
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