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Jim Donald, the former CEO of Starbucks as well as president/CEO of Pathmark Stores, president of Safeway’s eastern division and vice president of food merchandising at Walmart, was named yesterday to be the new president/CEO of Haggen Inc., the 33-store Pacific Northwest supermarket chain that generates about $844 million a year in sales.

Donald is scheduled to begin his new duties next week. He succeeds Dale C. Henley, who has been serving as president/CEO since 1996 and who announced his retirement earlier this year. Henley now becomes a non-executive chairman of the board of Haggen and will continue as president/CEO of Briar Development Co., a Haggen real estate affiliate.

“Haggen has led the industry in innovation, quality and service and I am proud to join its 3,700 associates in continuing this trend,” Donald said in a prepared statement. “Joining Haggen brings me back to my roots in the supermarket industry, a business that I have always had a passion for.”

Don Haggen, co-owner of the company with his brother Rick Haggen, released the following statement: “We are extremely pleased to attract an executive with Jim Donald’s skills and record of success to lead our Haggen Food & Pharmacy and TOP Food & Drug stores. He has the experience of leading large companies, but understands the importance of visiting stores and building strong relationships within the many communities we serve.”
KC's View:
I suspect that another possible matter on Jim Donald’s plate will be to get Haggen ready to eventually be sold, but that’s just a guess on my part. More and more people tell me that they suspect there will a lot of consolidation on the retail side of the food industry over the next few years, with companies like Haggen increasingly vulnerable because of competitive pressures; the smart ones will position themselves to get the best possible price through a canny mix of efficiency and effectiveness, while the less smart ones (how’s that for diplomatic language?) will ignore the economic and competitive realities until it is too late.

Here’s the great thing for Haggen. The best way to get a company ready to be sold is to make it more effective for customers and a better place to work for employees – which happens to be two of the things that, from my experience, Jim Donald is best at. So whether the company is sold down the road, or this is just the next chapter in a decades-long history as an independent-minded regional chain, this is a smart strategy.

I like this move a lot, from both points of view. Haggen gets a seasoned and dynamic retailer to run the company, someone who can see the world both from 30,000 feet and from ground level…and that’s a critical combination of insights. As for Jim Donald, he may be taking over a much smaller company than what he’s used to, but this move allows him to stay in the Seattle area, which he loves, and it allows him to flex some retailing muscles that may have gone unused in the two years or so since he was ousted from Starbucks.

Almost nobody I know blames Donald for the problems that Starbucks has been experiencing – he was doing what Howard Schultz and the board wanted him to do, and he was just a convenient fall guy when Schultz wanted to retake control. And pretty much everybody I’ve talked to in Starbucks management loved working with him and thought it was a sad day when he left the company.

Haggen is about to get very interesting…