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Taking Stock

Rick Herring: The Right Man For The Carlisle Job 

At first blush you might think that choosing a chief financial officer to run a company where the credo is “selling more stuff” would be an ill-advised decision.

And it’s true that Rick Herring, the highly-intelligent, very hard working 47-year old Ahold executive, may lack the operational and merchandising experience that some would seek for the division president’s job. However, what he brings to the table along with his smarts and his 20 year career at Ahold is his ability to fit in with the current Ahold culture.

Take nothing away from departing Giant/Carlisle president and CEO Sander van der Laan. The Dutch native is a brilliant talent with fine people skills whose career path at Ahold is still on the rise. But at the end of the day he wasn’t part of the Giant culture, a team headed over the past decade by the retired Tony Schiano and Carl Schlicker, who left Carlisle in July 2008 to assume the chief executive post at Stop & Shop and Giant/Landover.

While some might want to blame van der Laan for Giant’s recent sales hiccup and as the key agent for a slight cultural change in Carlisle, that would be unfair.

On the revenue side, the challenging economy, food price deflation and the new improved Weis Markets were the primary reasons why Giant’s unbelievable streak of 56 consecutive quarters of positive identical sales came to an end in 2009. On the cultural side, van der Laan was a positive influence with a wonderful personality. Unfortunately, he wasn’t one of “them.”

Rick Herring is certainly one of “them,” an executive who first joined Ahold in 1989 and became CFO at Carlisle in 2003. Along with a strong skill set, Herring is liked and admired by his peers, and when looking at all potential candidates, both Carl Schlicker, now president of all of Ahold USA retail and his boss, Larry Benjamin, COO of all of Ahold USA and a member of the Amsterdam based retailer’s corporate executive board, knew that Herring’s experience within the organization, his age, his temperament and his roots in Carlisle, were very compelling reasons to offer him the top job.
We wish Herring all the best with the new gig.

Herring’s appointment completes the slate of division presidents that will form the nucleus of Ahold’s new organizational structure. He joins Robin Michel (Giant/Landover), Mike McGowan (Stop & Shop – New England) and Ron Onorato (at the newly formed Stop & Shop – Metro NY division) as the linchpins who will oversee Ahold’s $22 billion U.S. business.

And, just before presstime, Ahold USA retail made several other executive appointments. Jim Ferraro has been named chief real estate development officer, Peter Labbe was named chief information officer and Casper Meijer has been appointed to the post of chief acquisition laison officer. There will be more changes to come over the next few months as the company puts in place its plan to make Carlisle the merchandising headquarters for Ahold USA under the leadership of the very talented and popular Jeff Martin. In the past month, also, Bill Holmes, EVP-operations for Stop & Shop/Giant-Landover, announced his retirement after more than 40 years with the retailer.

And then, of course, there's the huge Ukrop's news. That story is detailed on page 1, but here are a few tidbits that you might be interested in. When the deal is consummated (probably in early February), expect Sunday openings to begin fairly soon after. However, don't expect the sale of beer and wine to follow anytime soon. Ahold has been extremely sensitive in understanding the unique culture that Ukrop's has formed over the past 72 years. It's likely you'll see alcohol sales occurring, but perhaps not until 2011. And when beer and wine are sold in the stores, there will be banner modification (perhaps something like Ukrop's by Martin's). Additionally, Giant/Carlisle will begin a significant capital improvement program in all 25 stores. Those upgrades and Sunday openings, along with the implementation of Martin's very successful modified EDLP program, should provide a significant instant boost to sales. As best we can ascertain, this process began last May and reportedly hit a snag in the late summer-early fall period of this year. We believe that Ahold did not change its original price offer significantly, but was able to gain more favorable terms and conditions that affected operational flexibility. Sources have told us that alleged bidders Harris Teeter and Alex Lee Inc. were eliminated reportedly because the former retailer would not agree to acquire enough stores and the latter could not gain the necessary financing required.

This is only part of Jeff Metzger's Taking Stock column. The complete, full-length version of Taking Stock is available only to subscribers of Food World and Food Trade News. Subscribe now to receive the the best analysis of the Mid-Atlantic grocery industry available only in Food World and Food Trade News.