Ask about Bob Miller in the halls of Boise’s Albertsons Companies, and you might get a reaction similar to the reverence for company founder Joe Albertson. In reporting on the company over the past few years, Miller stands almost as a second company founder: knitting together a few stores left for dead in a blockbuster Wall St. transaction and turning it into the nation’s second-largest grocer.
In a quiet filing with the Securities and Exchange Commission last week, Albertsons noted that Miller formally left his role on the board of directors. He served as chairman emeritus until late last month when the company went public. Miller, now in his mid-70s, will still retain the right to attend board meetings as a non-voting “observer,” according to the filing.
Started sorting glass
Miller’s career at Albertsons is about as long as one could imagine, starting 50 years ago as a teenager as a clerk in one of the company’s California stores. A survivor of polio, he sorted glass bottles in his first weeks with the company. But he started to climb the ladder, first in the stock room, then as a checker. He stayed with Albertsons until the early 1990s, when he left for Fred Meyer where he eventually took the CEO job before the company merged with Kroger. He then headed pharmacy chain Rite Aid, before retiring in 2003.
But he left retirement a few years later, and the actions he took cemented his role in the Albertsons history book.
In the early 2000s, former GE executive Larry Johnston took the reigns of Albertsons and over a period of four years, saw 39% of the company’s value evaporate. Johnston landed himself on the list of “Most Outrageously Overpaid CEOs and ended his time by selling off the company for parts in 2006. One tranche of stores went to Supervalu, Inc. The standalone pharmacies went to CVS. And a group of about 650 so-called underperforming stores went to a coalition led by Cerberus Capital Management.
Cerberus started Albertsons, LLC – but needed someone to lead the new, smaller entity.
Miller took the stores, and over the next nearly 15 years, helped guide the grocer from a small player, back near the top of the list of largest grocers.
“We bought the most distressed stores,” Miller told the Wall Street Journal in 2017. “The struggling stores were in areas where we competed with Wal-Mart. We bought them for the real estate value. Over the next six years, we sold and closed stores, paid back debt.”
Miller sums up that first phase, started from a few offices in the old Albertsons Inc. HQ in Boise.
“We had taken stuff nobody wanted and turned it into a nice little company.”
In 2013, that nice little company took another big step. It bought back the original Albertsons Inc. stores owned by Supervalu, remerging most of the company back together. It also ended an odd circumstance that confounded many locals: While Albertsons LLC had its headquarters in Boise, the stores in the area were owned by Supervalu. Now, the chain was whole again.
As it worked to move the now-underperforming Supervalu stores toward its way of business, the company still relied on the Minnesota company for many back-office functions – like IT and store support systems.
So Miller made another big move.
Safeway and Boise
Albertsons purchased the larger Safeway chain, based in the San Francisco Bay area. Safeway, which also started in Idaho, cost $9.4 billion and brought the number of stores owned by the company to more than 2,300.
The Safeway deal, announced in March 2014, made some in the Boise-area nervous. The city mostly lost the company, and its high-paying jobs, when Supervalu purchased the bulk of those stores in 2006. While some positions remained in Boise, most shifted to Supervalu’s headquarters in Eden Prarie, MN. Now, after a few years with the formal headquarters for the growing company back in Boise, the Safeway merger announcement left a funny note: the company would keep corporate offices in Pleasanton, CA, Phoenix, AZ, and Boise.
But a few months later, Miller signaled a big commitment to the City of Trees – by ponying up $12.5 million for a 15-year deal to put its name on Bronco Stadium – now called Albertsons Stadium. Miller didn’t mince words on where the company’s geographic home base would stay.
“We’re anxious to let people know we’re here to stay,” Miller said according to the Idaho Business Review. “It’s our corporate headquarters, it’s going to be, and this is a good way to reinforce that message.”
As we wrote in 2016, Albertsons in many ways morphed into Safeway – with the company’s systems, marketing, and technology leading the way. But the top executives remained in Boise. Over time, the number of jobs in the area continues to grow, while the company keeps some operations in California.
End of a 14 year process
The initial public offering last month finally brings Albertsons to a long-sought cash out for that group of 2006 investors.
“From day one, I’ve had five partners. All good partners,” Miller told the WSJ several years ago. “They’ve been here 11 years (as of 2017). And at some point, they’re gong to have to monetize their investment.”
The company tried several paths to give the investors the monetization – including an earlier, failed IPO in 2015 and a proposed merger with Rite Aid that didn’t go through.
Now, with Albertsons again a public company, Miller can again retire. But he told the Journal one thing he learned as a stocker in his teenage years stuck with him over many roles and years.
“If you are really nice to customers, they are usually nice to you. That was an early lesson that taught me what it means to be really good with customers.”