Dive Brief:

• Southeastern Grocers announced that Ian McLeod will be stepping down as CEO of the company on June 30th to pursue other opportunities, according to a company release.
• Southeastern’s COO, Anthony Hucker, will assume the CEO position on an interim basis beginning July 1st while the company searches for McLeod’s successor. Hucker previously served as president and COO of Schnucks, president of Giant Food and head of Walmart's strategy and business development division.
• "Under Ian's direction, Southeastern Grocers has made substantial progress on our transformation plan and established great momentum,” Southeastern Grocers noted in the release. 

Dive Insight:

Back in 2015, fresh off a canceled $500 million IPO and with sales struggling throughout its nearly 700 stores, Southeastern Grocers looked to be a likely acquisition target. Instead, the company surprised everyone by hiring McLeod, a Scotsman whose illustrious career included the turnaround of an Australian grocer and a brief stint as chief executive of one of Europe’s most storied soccer clubs.

McLeod immediately got to work addressing the many problems he saw in the company, which owns Winn-Dixie, Bi-Lo and Harvey’s Market stores. He instituted chain-wide efficiency measures aimed at saving $70 million, which were then used to fund a sweeping price cuts program known as “Down Down.” McLeod also initiated much-needed store remodels; introduced a new fresh-focused Winn-Dixie format; and began converting certain Bi-Lo and Winn-Dixie stores to either its low-price format, Harvey’s Supermarket, or its Hispanic format, Fresco Y Mas, depending on the locations.

Earlier this year, McLeod and Southeastern Grocers unveiled a revamped private label lineup comprised of three tiers — an everyday SE Grocers Essentials brand, mid-tier SE Grocers and premium label Prestige. Far from a rebranding exercise, the company had combed through its more than 2,300 store brands and decided to reformulate the vast majority of them. Many of the products contain no artificial flavors, MSG, trans fats or high-fructose corn syrup.

Despite this progress, Southeastern’s stores continued to lose out to strong competitors in the markets where it operated. In its home state of Florida, Winn-Dixie faced off against Publix, while Bi-Lo went head to head against Kroger and Harris Teeter on the east coast. Deflation also took a toll on company sales. Last year, according to Supermarket News, the privately held company posted a 7% sales loss and 3.6% declines in same-store sales.

Things aren’t going to get any easier for the company in the months and years ahead. In addition to Publix and Kroger, Southeastern can add Walmart, Aldi and Lidl to its growing list of competitors. The company’s traditional stores are laboring to improve their pricing and assortments, but they’ll have a hard time matching the price advantages of Walmart and the hard discounters. Southeastern Grocers is going to have to make some dramatic changes to keep pace, and it’s going to have to do so without McLeod.