Small format plot thickens with exec departure

Santiago Roces left Walmart with little fanfare or the issuance of a press release last month, which isn’t uncommon for executives at the SVP level at the company the size of Walmart. Nevertheless, the timing of the departure certainly seems curious given that Roces was the guy with the words “small format” in his title and Walmart is about to open the first of its Walmart Express stores and rebrand Neighborhood Market as Walmart Market.

Even more curious is the fact that just yesterday Supervalu, where former Walmart Americas president and CEO Craig Herkert serves as president and CEO, announced that Roces would serves as CEO of Supervalu’s small format, low-price Sav-A-Lot division.

Doubling the size of the 1,200-unit division by the end of 2015 is a key growth initiative at Supervalu.

What makes the hiring of Roces intriguing is that he is assuming a role at a direct competitor who has ambitious growth plans for an already established small format. When former Walmart operations executive Hank Mullaney left Walmart to join CVS in a senior leadership capacity Walmart sued and successfully blocked the hiring by arguing that Mullaney possessed knowledge of Walmart’s small-format plans. Roces would appear to be in a similar position, although Walmart has told financial analysts that he did not oversee the Express format despite having the title of SVP small formats.

Roces spent 13 years at Walmart where he held a wide variety of roles internationally and domestically. Before serving as SVP of Walmart’s small format division, he was SVP new business development and store experience and prior to that he was president and CEO of Walmart Koreo before Walmart divested the operation. He also served as chief merchandising officer of Walmart Argentina and held leadership positions at PepsiCo and Carrefour.

“[Roces] is a very talented leader with a wonderfully diverse business background,” Herkert said. “His leadership, energy, and enthusiasm will be critical as we continue our journey to open more than a 1,000 Save-A-Lot stores in the next several years.”

Walmart is looking to achieve a similar objective of its own in the coming years in part because of operators such as Sav-A-Lot, Aldi, Dollar General and Family Dollar. All are expanding aggressively and with their no-frills, low price value proposition and convenient locations they have been siphoning trips and sales away from Walmart’s supercenters.

The addition of Roces was made possible by the departure of 27 year Supervalu veteran Bill Shaner who led the division the past few years.

“We wish Bill well in all his future endeavors and appreciate his commitment to Supervalu for the past 27 years and more recently his leadership and guidance as we laid out an aggressive growth strategy for Save-A-Lot,” Herkert said.