Noddle: In past visits to the New York Stock Exchange, there was always an offer on the table to ring the bell. In light of our 135th anniversary, we felt it was time. We tied it in with our earnings release for the third quarter. It was also a good time to meet with our investor community and to recognize the staying power of a company that has been around for 135 years.
It was a celebration for the whole company. There were not only a number of senior officers, but also people who represent different aspects of the company. We had a bakery employee [Connie Ballard] from a Cub Foods store in St. Paul, MN; a Save-A-Lot retail associate [Joetta Woodrum], fromTampa, FL; and a warehouse employee [Randy Endsley] from our DC in Champaign-Urbana, IL. We truly made it a celebration for the whole company. I was fortunate to be able to represent the 55,000 people who work at Supervalu.
You've been with Supervalu for almost 30 years, much of that time spent on the retail side. What changes have you seen over the years throughout the grocery industry?
Noodle: The demographics of the United States continue to change, so how we appeal to customers and go to market has had to change at the same pace. There's been a growth of supercenters and alternative formats, and almost all of these retail formats sell the same highly consumable goods that were traditionally only sold by supermarkets.
Obviously, the supply chain and logistics that serve this varied environment have changed. It's vastly different and requires an enormous investment in technology. Also, the number of items that go through these systems is probably tenfold what they were.
What logistical challenges do you see coming along for the food industry in the next five to 10 years?
Noddle: All of us who work in the supply chain business have been faced with a number of factors over the years that have been a real challenge. There are rising pension costs, rising healthcare costs. We are heavily dependent on our employees, but you have to depend heavily also on technology and automation to remain competitive with the supply chain pressures we see coming into the food industry from companies outside the food industry, such as Wal-Mart.
Each person in the supply chain must be more efficient this year than he was last year and that incremental productivity growth is difficult to achieve and sustain, but it is absolutely critical because of the need for improved customer service. An effective supply chain can be a competitive advantage. If you don't have an effective supply chain before you open the doors in the morning, you are at a significant disadvantage. Our job is to give our customers a competitive supply chain so their merchandising and marketing competencies can win.
What are your expectations for Supervalu and what kind of role will the TLC acquisition play?
Noddle: We see logistics and the supply chain as key. We have substantially grown in the retail and distribution business and third-party logistics allows us to take our competitiveness, our processes and systems to the next level. That applies not only in our industry but outside the food industry as well.
We've said for some time that we would likely make an acquisition when we find one company that fits all our criteria. We are excited to be closing that acquisition and to make Total Logistics part of our company.
What kinds of things keep you up at night?
Noddle: I think about having a company with continuous improvements and a continuous ability to be more efficient every year. I worry about the growth of non-traditional competitors and what is required to compete effectively against that kind of competition. I worry that we invest our capital wisely and effectively to support the long-term growth and stability of our company. I wake up to world events--and not all of them are pleasant--and I think about what effect they will have on our world and our economy. And lastly, I worry about inflation.-Leonard Klie
Jeff Noddle - Chairman and CEO Supervalu Inc. Minneapolis. Experience: Joined Supervalu in 1976 as director of retail operations for its JM Jones division. Became president and COO in 2000 and elected CEO in 2001. Added the title of chairman of the board to his resume in 2002.