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Interesting piece in the Cincinnati Post rating Kroger CEO David Dillon’s first year in that job as a “trial by fire” marked by labor disputes and heightened competition that nonetheless has been “a smooth leadership transition in a tumultuous industry.”

Dillon took over the CEO’s job from Joseph Pichler a year ago; Pichler retired as chairman yesterday, and Dillon now has added that title to his job description.

According to the paper, “Dillon's ability promises to be tested to the limit here in Kroger's hometown where the company does about $1 billion worth of business and still controls almost 45 percent of the market,” but where competitive threats from the likes of Wal-Mart are expected to increase even as Kroger enters into labor negotiations with some 9,000 unionized employees at 74 stores.

Still, Dillon is characterized as “a meticulous manager who keeps his nose to the grindstone” and as “well educated, analytical, detail-oriented, but not flashy.”

In other Kroger news, shareholders at the company’s annual meeting yesterday voted against proposals to establish annual board elections and to separate the posts of chairman and chief executive.
KC's View:
While the Pichler-Dillon transition has been painless, Kroger faces numerous challenges. It has to find ways to reduce costs so it can remain price-competitive with Wal-Mart…and it has to find new ways to create compelling shopping experiences for consumers.

Not an easy series of tasks.

It seems to us, the more we think about these issues, that one of the central challenges to retailers like Kroger is to define themselves in new and unique ways that are relevant to consumers…and not just a response to competition.