Albertsons 2011 Annual Report Download - page 14

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(1) Craig R. Herkert was appointed Chief Executive Officer in May 2009 and President in August 2009. Prior
to joining the Company, Mr. Herkert served as President and CEO of the Americas for Wal-Mart Stores,
Inc., from 2004 to 2009.
(2) Julie Dexter Berg was appointed Executive Vice President, Chief Marketing Officer in March 2010. Prior
to joining the Company, Ms. Dexter Berg was the Managing Partner at Brandmaking LLC, a marketing
strategy consulting company from 2004 to 2010.
(3) Wayne R. Shurts was appointed Executive Vice President and Chief Information Officer in November
2010. Prior to joining the Company, Mr. Shurts was the Global Chief Information Officer for Cadbury plc
from 2008 to 2010 and the Senior Vice President of Cadbury Schweppes Americas from 2006 to 2008.
The term of office of each executive officer is from one annual meeting of the Board of Directors until the
next annual meeting of Board of Directors or until a successor is elected. There are no arrangements or
understandings between any executive officer of the Company and any other person pursuant to which any
executive officer was selected as an officer of the Company. There are no family relationships between or
among any of the executive officers of the Company.
Each of the executive officers of the Company has been in the employ of the Company or its subsidiaries for
more than five consecutive years, except for Craig R. Herkert, Julie Dexter Berg and Wayne R. Shurts.
ITEM 1A. RISK FACTORS
Various risks and uncertainties may affect the Company’s business. Any of the risks described below or
elsewhere in this Annual Report on Form 10-K or the Company’s other SEC filings may have a material
impact on the Company’s business, financial condition or results of operations.
Current economic conditions
The global economy and financial markets have experienced volatility in recent years due to uncertainties
related to energy costs, availability of credit, difficulties in the banking and financial sectors, the decline in
the housing market, falling consumer confidence and rising unemployment rates. These factors have all
contributed to the decline in consumer spending and to consumers trading down to a less expensive mix of
products or to consumers trading down to discounters for grocery items. In addition, in fiscal 2011, the
Company experienced low levels of inflation. In this uncertain economy, it is difficult to forecast whether
fiscal 2012 will be a period of inflation or deflation. Food deflation could reduce sales growth and earnings,
while food inflation, combined with reduced consumer spending, could reduce gross profit margins. If these
consumer spending patterns continue or worsen, along with an ongoing soft economy, the Company’s financial
condition and results of operations may be adversely affected.
Execution of initiatives
The Company is positioned in the retail food industry as the only traditional food retailer with multiple
formats and ownership models that can be used to address differing customer needs across the United States.
Management believes that this diversity of go-to-market options differentiates the Company and is part of its
vision of becoming “America’s Neighborhood Grocer.” The Company has launched certain business
transformation initiatives to achieve this vision of enhanced performance through greater focus on the
customer, driving increased sales and reducing its overall cost structure. The Company plans to increase the
number of hard-discount stores and to reinvest in its existing store base through remodels and merchandising
initiatives tailored to the unique needs of each particular store’s neighborhood. If the Company is unable to
execute on these initiatives, the Company’s financial condition and results of operations may be adversely
affected.
Competition in the Retail food and Supply chain services businesses
The Company’s Retail food business faces competition for customers, employees, store sites, products and in
other important areas from traditional grocery retailers, including regional and national chains and independent
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