Cub Foods Splits Merchandising Duties

Discussion
Oct 27, 2003
George Anderson

By George Anderson

The Packer reports Cub Foods has plans to split its merchandising functions into two divisions in an attempt to be more responsive to the needs of local consumers.

Keith Horder, president, Business Visions in Phoenix, and former Safeway executive responsible for centralizing that company’s produce business said a number of companies are
finding a competitive advantage in decentralized operations.

“Certain parts of the country prefer different sizes of asparagus,” Horder said. “If you to sell jumbo (asparagus) in the Midwest, they don’t care for it. In the West, people
are almost the complete opposite, and each area thinks the size they prefer is better. . . You can and should cater your merchandising and procurement to get the kind of product
the people want.”

Moderator’s Comment: Is there more benefit to a centralized or decentralized operation in today’s competitive climate?

We’ve always thought it was less about the strategy and more about the execution.

Keith Horder’s former employer, Safeway, for example, derived great benefit from its move to a more centralized operation in the nineties. In recent years,
however, its lack of flexibility has led to unhappy customers in some of the markets it serves, most notably in the Chicago and Philadelphia metro areas.
[George
Anderson – Moderator
]

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