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Will Safeway come calling on Walmart

Top food executives at Walmart are presumably in the crosshairs of Safeway recruiters now that longtime chairman and CEO Steve Burd has announced his retirement.

Burd intends to step down at Safeway’s May 14 shareholders’ meeting so the company has time to locate a successor from internal as well as external candidates. When it comes to external prospects, Walmart is often a source retail competitors turn to for senior leadership and the challenge of leading Safeway could be appealing and potentially lucrative. The company is one of the nation’s largest food retailers with 1,644 stores and annual sales of roughly $43.6 billion.

"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," Burd said.

According to the company, under Burd’s leadership Safeway established a culture of thrift and capital discipline, created an industry-leading customer service program, developed a "Lifestyle" store format that introduced a never before seen level of perishable product quality and formed a leading prepaid payment network that is among the world’s largest distributors of gift cards.

If Safeway does poach an executive from the ranks of Walmart’s senior leadership they will learn, as have others before them, that success at Walmart doesn’t always translate to the new organization. Countless examples of this phenomenon exist, but the most recent one involves former Walmart international executive Craig Herkert who left to become CEO at Supervalu only to leave the company after being unable to execute a turnaround.

Safeway is in better shape that Supervalu, but whoever takes the top job is going to have their hands full managing a unionized labor force, a moderately declining store base and market share that is under relentless attached from conventional supermarket retailers and unconventional competitors. The company is marginally profitable, it has long term debt of $6.4 billion and its share price has been in steady decline for the past decade.