Retailer of the Year/Food Industry Hall of Fame

Withers: Miller Balances Autonomy and Accountability

Mike Withers, EVP of retail operations, has been with Albertsons 42 years, starting his career in 1976. He has the distinction of having worked in the company’s 16th and State Street store in Boise—the original store. He started as a courtesy clerk.

He moved up the ranks to store director, then relocated to Florida to be a store director and then a district manager. He next moved to Spokane, Washington, as a district manager. His next assignment—running his own division for the first time—was in the Big Sky division, with responsibility for store operations in Montana and North Dakota. During that time, Albertsons bought the Buttrey’s stores. He later ran the Florida and Portland divisions. In 2006, he was named VP of marketing and merchandising for the Florida and Southern divisions, then president of the Southern and Jewel-Osco divisions. He was named EVP of retail operations in April 2017.

Though he knew of Bob Miller earlier, 2006 was when Withers began working directly with him. Withers had actually left the company after the Supervalu acquisition of 1,100 Albertsons stores, and Bob Butler (Albertsons COO at the time) called and asked if he had any interest in coming back.

After talking to John Sheehan, who was running the Florida division at the time, “I was excited about what they were doing and what they were talking about in the business model; it sounded like something I wanted to do,” Withers says, adding that he had washed his hands of the industry, throwing out everything he had that was related to retail grocery. He had started a new career in real estate.

“But it was the model, or what John articulated to me that this is what we’re focused on, this is what we’re doing, here’s where we’re going…I had worked in the Florida market two times, I knew the market fairly well, I also knew the stores they bought and the challenges they faced—the new company did—and was very upfront about it. He told me, ‘I don’t know what’s going to happen, but we think we have a good shot at this. Two years from now, maybe we’ll be here, maybe we won’t, but we’re going to go out swinging.’”

Withers went down to Florida to visit with Sheehan, and “it was all that he said it was. I guess if there was anything that was energizing, it was all the naysayers, especially in the beginning. We were the has-beens, the retreads. That was probably a catalyst for the energy of all of us in the six divisions to succeed.”

Miller made it clear to everyone, Withers says: “Our destiny was in our hands. Bob knew where he wanted us to go: We’re going to run good stores, we’re going to treat people right, we’re going to compete fiercely. But he wasn’t telling you how to do it. We were decentralized, and the strategies we took and the opportunities we would see were different by market. He trusted us to go down the right path.”

That might mean making an investment in pricing in a certain market to keep market share, for instance.

Miller mixes accountability and autonomy well, Withers says.

“That’s Bob’s way. There’s certainly a level of accountability but also a high level of autonomy and high expectations. He will stay out of your way, but he’s never too far from you, either.”

Miller is known to call his executive team members periodically just to say, “Hey, what’s happening? Tell me what’s going on.”

He may have seen news about a new competitor or offer some operational advice, but he also may just be calling to check in to see how you’re doing, Withers says, adding that he considers Miller “a people person.”

Withers credits Miller’s leadership as the key to Albertsons coming back to a place of growth and success.

“There’s no way we would have made it without Bob’s leadership; the odds were stacked against us,” he says. “You see where we’ve come today, but you still hear the naysayers. I heard about it when we came together with the old company, the naysayers saying that’s not going to work, it’ll never work. With Safeway it’s not going to work, it’ll never work, well guess what? It’s working. Our future’s bright, it’s been a great run for all of us. There’s no way in hell we’d be here were it not for Bob’s leadership, his vision and his commitment to not going from ditch to ditch, not changing course. We’ve stayed pretty true to what brought us to the dance and what’s going to take us home.”

We grew—bought up a lot of companies—but we’ve tried to keep that culture where the executives have their door open and people are free to walk in.

There were times at Albertsons when the executive section was sealed off and you couldn’t get in unless you had a pass. We don’t want that; we want an open culture where people can say things, do what they need to do to run their business; they are charged with keeping the people they report to involved. We always have certain meetings that you have to go to—you can’t get rid of those damn things—but I want them to run their business and communicate. That, to me, is the way to run a big company.

I was at Kroger for a year, and that was not the way they were running in those days. The executive floor was the executive floor.

Do you want to share with me a little bit about the acquisition of Safeway? I know how it all worked out, but what I’m saying is that must have been very complicated.

It was. The nice thing about it is this month we will finish our major integration with Safeway. Three and a half years. We are converting our last stores to the Safeway system in the next week or so, if you can imagine that. That’s been very costly, lots of unimaginable hours to do that. It’s been a distraction.

That’s one reason I think it’s the right time for me to step aside (as CEO) and get somebody else in here because we’re positioned now to do things we couldn’t do the last three and a half years.

We are all going to be on the same system; we won’t be closing and consolidating warehouses. It was really unbelievable how well our people have done. Think about changing over a store: You close that night, you change every piece of electronic equipment, telephones, everything—you retag the whole store and you open the next morning by 9 o’clock. And think about doing that 900 times.

And the cost—think about it. Throwing away all the equipment or selling it for nothing or whatever and getting all new equipment in every store. It’s been an unbelievable amount of work and that’s behind us. It’s a good time for me to get out of the way.

Plus, we didn’t merge with Rite Aid, so we’re just going to grow our own company.

And our company’s doing great. We are going to spend about $1.4 billion in capital this year and generate $400,000$500,000 of free cash flow, and we have significant liquidity—including nothing drawn on our $4 billion revolver—so all of this stuff about “overleveraged” (is inaccurate). We own $9 billion worth of real estate, so this company is in really great shape going forward. The wind’s going to be at the back of this company because of all the stuff we had to do to integrate Safeway and Albertsons together that’s done. I couldn’t be more excited about what’s going to happen going forward.

Probably help morale a little bit, too.

Oh, I think so. People have worked so darned hard it’s hard to believe. A team of 50 to 75 people have been working every night helping convert these stores for three and a half