As he gears up for a new challenge in Spain, Carlos Criado-Perez tells Julian Hunt what his fondest and proudest memories will be of his time at Safeway
Former Safeway chief executive Carlos Criado-Perez has been a busy man since he left the business earlier this year following its takeover by Morrisons. He took a month-long holiday in Argentina to “clear the cobwebs”, then he set up a wine business and formed a consultancy to help South American exporters exploit opportunities in the UK. But those who thought the charismatic Argentinian was going plural, think again: he will soon be fully focused again on retail.
As we revealed in our October 23 issue (p14), Criado-Perez has been lined up by private equity firm Permira as executive chairman of the former Ahold supermarkets business in Spain which it is buying for E685m. It’s not a done deal, says Criado-Perez: there still needs to be an audit of the business, the EU must approve the takeover and his contract needs to be agreed.
But it seems likely that within a month these details will be finalised. And Criado-Perez was on a flying visit to London this week to attend the British Retail Consortium dinner as a guest of Permira.
Criado-Perez has been working with Boston Consulting on a turnaround plan for the 600-store business and he is now spending all his time in Madrid putting the finishing touches to its commercial strategy. He is no stranger to Spain. After all, it’s where he started his career in retail. And while he says that the market is not as polarised as the UK, there are some formidable competitors around. It means he will have to come up with a pretty creative plan not only because the business has many disadvantages, and needs to redefine its position in the market, but also because it has been through a traumatic 12 months or so of takeover speculation.
This is familiar territory for Criado-Perez. His time at Safeway began with a strategy to kickstart growth at the number four player and ended with a 14-month-long takeover battle that he says completely paralysed the business.“We had to keep a very talented team of people coming back each day. We had to keep suppliers supporting us, when they could see the end coming closer and could see that we had little credentials for them to keep them supporting us.”
Inevitably, Safeway became less competitive. Criado-Perez says that its promotions became bland, its high:low basket was focused mostly on the high, and there was a dramatic downturn in traffic. “We were caught in this loop,” he says.
“A deal that should have taken three to six months took 14 months but that built a lot of relationships and has left me with wonderful memories of people who did great things. Above all, I think that Safeway had a lot of talent. It was a complex business to run with a complex portfolio and they did a very good job.”
He adds: “There was something in the format that was of our time. We stimulated customers with things that were not just abut price but about getting people excited and motivated. Also, I think there is some merit in how we tried to compete without scale. We managed to grow our sales and our profits for three years.”
But could Safeway have stayed independent? Not without having bought stores, says Criado-Perez. “Scale demanded that we did something and we did. Selling would clearly not have been my first choice. I would have liked to have made acquisitions and grow in scale. If I had had the choice we would have done that in year two or three of the turnaround. If we could have bought 100 stores then I do believe it could have remained independent. I honestly believe that.”
Ask Criado-Perez about how he thinks he will be remembered, and he is sanguine about his legacy. “I will be remembered as someone who took a company at £1.80 a share and sold at £3.25. And that’s the end result. Did the strategy work? Was it good enough? Were the people good? All these things will eventually melt into the big numbers. But our creativity and our ideas will be there for those that scratch beneath the surface.”
Former Safeway chief executive Carlos Criado-Perez has been a busy man since he left the business earlier this year following its takeover by Morrisons. He took a month-long holiday in Argentina to “clear the cobwebs”, then he set up a wine business and formed a consultancy to help South American exporters exploit opportunities in the UK. But those who thought the charismatic Argentinian was going plural, think again: he will soon be fully focused again on retail.
As we revealed in our October 23 issue (p14), Criado-Perez has been lined up by private equity firm Permira as executive chairman of the former Ahold supermarkets business in Spain which it is buying for E685m. It’s not a done deal, says Criado-Perez: there still needs to be an audit of the business, the EU must approve the takeover and his contract needs to be agreed.
But it seems likely that within a month these details will be finalised. And Criado-Perez was on a flying visit to London this week to attend the British Retail Consortium dinner as a guest of Permira.
Criado-Perez has been working with Boston Consulting on a turnaround plan for the 600-store business and he is now spending all his time in Madrid putting the finishing touches to its commercial strategy. He is no stranger to Spain. After all, it’s where he started his career in retail. And while he says that the market is not as polarised as the UK, there are some formidable competitors around. It means he will have to come up with a pretty creative plan not only because the business has many disadvantages, and needs to redefine its position in the market, but also because it has been through a traumatic 12 months or so of takeover speculation.
This is familiar territory for Criado-Perez. His time at Safeway began with a strategy to kickstart growth at the number four player and ended with a 14-month-long takeover battle that he says completely paralysed the business.“We had to keep a very talented team of people coming back each day. We had to keep suppliers supporting us, when they could see the end coming closer and could see that we had little credentials for them to keep them supporting us.”
Inevitably, Safeway became less competitive. Criado-Perez says that its promotions became bland, its high:low basket was focused mostly on the high, and there was a dramatic downturn in traffic. “We were caught in this loop,” he says.
“A deal that should have taken three to six months took 14 months but that built a lot of relationships and has left me with wonderful memories of people who did great things. Above all, I think that Safeway had a lot of talent. It was a complex business to run with a complex portfolio and they did a very good job.”
He adds: “There was something in the format that was of our time. We stimulated customers with things that were not just abut price but about getting people excited and motivated. Also, I think there is some merit in how we tried to compete without scale. We managed to grow our sales and our profits for three years.”
But could Safeway have stayed independent? Not without having bought stores, says Criado-Perez. “Scale demanded that we did something and we did. Selling would clearly not have been my first choice. I would have liked to have made acquisitions and grow in scale. If I had had the choice we would have done that in year two or three of the turnaround. If we could have bought 100 stores then I do believe it could have remained independent. I honestly believe that.”
Ask Criado-Perez about how he thinks he will be remembered, and he is sanguine about his legacy. “I will be remembered as someone who took a company at £1.80 a share and sold at £3.25. And that’s the end result. Did the strategy work? Was it good enough? Were the people good? All these things will eventually melt into the big numbers. But our creativity and our ideas will be there for those that scratch beneath the surface.”
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