Corporate Governance at Albertson's
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Case Details:
Case Code : CGOX008
Case Length : 9 Pages
Period : 2003
Pub Date : 2003
Teaching Note :Not Available
Organization : Albertson's Super Market Chain
Industry : Supermarket chain
Countries : United States
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Introduction1
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Albertson's, the #2 US supermarket chain behind Kroger, operated nearly 2,300 stores in 31 states under names such as Albertson's, Acme Markets, and Jewel.
More than half were combination food stores and drugstores (most with floral, bakery, and video departments), and about 200 had gas stations. Some 700 outlets were stand-alone drugstores operating under the Osco Drug and Sav-on flags.
Albertson's also ran discount warehouse stores under the Super Saver and Max Foods banners. In 2003, Albertson's recorded revenues of $35,626.0 million and a net income of $485.0 million.
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Albertson's had announced plans to spend $4 billion by the end of 2001 to launch more than 500 new food-and-drug combination stores, stand-alone drugstores, and fuel centers. But these plans were reversed when new CEO Larry Johnston announced a restructuring plan that would close about 165 under performing stores and cut 15-20% of non-store jobs.
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In addition to expanding in Arizona, Colorado, Nevada, Oklahoma, and Texas, Albertson's planned to invest $1 billion to remodel stores and build new ones in California.
Albertson's finalized a deal with Toys R Us, which became the exclusive toy supplier to all of Albertson's stores and a joint venture with Office Depot which provided office and school supplies to 18 stores in Chicago, Los Angeles, and Phoenix.
Albertson's was also stepping up promotions and cutting prices to win back grocery sales from Wal-Mart super centers, against which one in four Albertson's stores competed... |
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