Albertson’s Donald praises retail sector, touts organics

donalDuring an online Organic Produce Summit session, Jim Donald, Albertson’s co-chairman of the board, said that supermarket retailers and their suppliers have never operated better or been stronger than they are today as the industry has risen to the occasion during these challenging times.

He also talked about the attributes of a good leader, tips for both starting a career and improving retail sales, the importance of the front-line worker to any retailer, and the current pandemic.

He said that this COVID-19 pandemic has clearly emphasized the importance of brick-and-mortar retailers as they have been extremely essential in filling the needs of the communities. He noted that e-commerce has also proven its worth during these times. But Donald opined that these times have shown that a “a strong e-commerce platforms sits on top of a strong brick-and-mortar platform.”

He indicated that there is no better proof of the great job retailers and suppliers have done during this past four month than their ability to re-direct and absorb the 40 percent of food supplies that were previously being sold in the foodservice arena. Those supplies are now being purchased by consumers, who are eating the vast majority of their meals at home. “If anything, we have been reminded that our job is to serve the communities we are in,” he said.

The session was sponsored by the organic produce industry and Donald gave them their due. He said sales of organic produce products, and all organics for that matter, were trending up before the pandemic, have received a bump during this crisis, and will continue to rise after its over.

“Organic produce has seen major increases across all my (Albertson’s) 23 banners,” he said, noting that his produce executives are telling him that “anything green and organic now is just blowing out…the trend is going crazy across the country.”

He resisted the idea that a full-blown recession might negatively impact the typically higher-price organic products. Donald reiterated that the trend is here to stay, at one point noting that consumers are driving that trend for both the environment and their own health.

He did give suppliers one tip as he asked them to include GS1 labels on their organic produce so that they are rung up correctly at the checkstand. He noted that retailers are in a growth mode with many new hires, including new checkers that do not know the PLU codes. A properly placed label solves that issue.

It is these front line workers — including truck drivers and warehouse employees — that Donald said have done an amazing job during this time. He said for any retailer of any product, front line workers account for 95-98 percent of the positions in the company. These are the consumer-facing positions that he believed are critically important. The longtime senior executive said the hierarchical triangle should be reversed with the workers on top and the CEO on the bottom.

Lead from behind is his model. “Great leaders’ natural instincts,” he said, “are to support the front line. Never be bigger than the front line.”

He added that the front line is how a retailer separates itself from the competition and noted that this has never been more evident than during this pandemic.

Donald argued that the industry’s stellar performance during these times is indicative of the fact that there is always one crisis or another that must be managed by a retailer. He was conducting the session from the office of a small retailer on Orcas Island in the San Juan Islands of Washington where he has been holed up during this pandemic. He said Island Market’s latest crisis was having its delivery truck miss the ferry prior to the Fourth of July weekend. That’s a crisis, which the owners solved by arranging that the truck be put on a barge, so the store would be sufficiently supplied. Those supplies could easily have included lots of organic produce as Donald said that organic produce has a 40-50 percent market share of that produce department’s sales.

Another topic that Donald explored was what he called “freshman mentality.” He revealed that at a recent commencement address for college seniors, he told them that when they leave college and go back into the world, they once again must adopt a freshman attitude. He described that as being a little bit nervous and curious, a little scared, listening more than you talk, asking lots of questions and taking risks. He said that concept of being new and excited works well whether you are entering the workplace or merchandising organic produce. He said every SKU is special and should be treated as such — not as part of a group. He said if a retailer can capture that exciting feeling they felt when organics were brand new, they will cotinine to achieve success.

Further delving into the merchandising of organic produce, Donald said the category has come a long way since he was in retail several decades ago. At that time, it was non-existent or relegated to a small, forgotten section in the corner. Now, he said, retailers have an evolved go-to market strategy using a combination of co-mingling conventional and organics and utilizing specific organic sections. The end result is more retail space for the category and greater sales.

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