Convenience Is 'Here to Stay,' Says Walsh
Core-Mark president & CEO, retiring in January, reflects on industry, his time at helm
Published in CSP Daily News
SOUTH SAN FRANCISCO, Calif. -- As part of the convenience store distributor's succession plan, Core-Mark Holding Co. Inc. president and CEO J. Michael Walsh will retire on Jan. 18, 2013. Thomas B. Perkins, Core-Mark's senior vice president of resources, will succeed Walsh and will be appointed to the company's board. Walsh will remain on the board following his retirement from management.
Walsh has served as president and CEO since March 2003. During his tenure, Core-Mark reached many major financial and operational milestones, while also significantly expanding its corporate infrastructure (see Related Content below for previous coverage).
At the request of CSP Daily News, Walsh reflected on his time at Core-Mark and offered some insights into the c-store industry.
Q: Looking back, how would you describe your legacy in terms of the company and the industry at large? What did you feel were the company's major accomplishments during your tenure?
Walsh: As I look back on the past 10 years, I would say that convenience retailing has changed dramatically in response to the consumer. I would like to think that Core-Mark changed along with it and created solutions to the needs of the retailer. Think of the impact of "fresh" product, foodservice, healthier-for-you snacks, for example. In my opinion, the most important thing a CEO must do is to anticipate where the industry is headed and position his or her company to be relevant when it gets there. Some time ago, we made major commitments, both in terms of category management and investment in the cold supply chain, to support the leaders in retail as they migrated into the world of "Fresh."
I think about the last few years and the headwinds of the economic downturn. Convenience retailing not only survived, but continued to grow. Similarly, Core-Mark's success over the same timeframe I believe is evidence that we are in sync with the needs of our retailer customers.
Since 2005, our revenues have more than doubled, making us the fastest growing convenience distributor of scale. To be sure, we have expanded our infrastructure, with four acquisitions and two new ground-up distribution centers. More importantly, we sharpened our focus on specific, tailored, category management analyses and recommendations based on local demographics and comprehensive store surveys. We are completing about 3,000 store surveys a year and the results for the retailer have been astounding, both in terms of increased retail volume and profitability. This program requires substantial organizational bandwidth and expertise. We believe it is unmatched in the industry and represents one of the reasons we have enjoyed dramatic growth.
It has been an honor for me to have been part of an era where convenience made a bold statement that it is "here to stay." It has been fun and exciting to have been a part of this legacy.
Q: Where do you see c-stores and the supply chain going into the future? What are the challenges, the opportunities?
Walsh: Perhaps the single biggest, untapped opportunity for the convenience retailer today, particularly for the independents and smaller chains, is resolving the fragmentation of the supply chain. The relatively small-format convenience store is simply relying on too many vendors making too many deliveries. This legacy condition affects in-store-out-of-stocks, retail inventory investment, transaction costs, overall ability of the retailer to maximize the store offering and, in a very dramatic way, cost of goods.
We have worked with leading retailers in recent times on this issue and clearly see the economics of the opportunity. In the very near future, we predict that the supply chain for convenience will be substantially streamlined and vastly improved over the way it operates today. Transitioning to a more efficient model involves many factors. After a lot of hard work and creative thinking by a lot of people, I believe that Core-Mark is now ready to serve as a major player in accelerating the inevitable changes to the supply chain that the industry seeks and needs.
Q: What's next for you?
Walsh: In the future, I will continue to serve on Core-Mark's board and will be encouraging, supporting and assisting Tom Perkins, our incoming CEO, in any way that the company deems appropriate. Tom has enjoyed a very productive career at Core-Mark for the past 19 years, serving in multiple capacities and has a solid understanding of the business, our customers and our vision. Tom will continue driving our key strategies to deliver superior value for our customers.
On a personal note, I have been so very fortunate to have worked with great people throughout the company and the industry. People like Hank Armour, president of NACS, who has done such a fantastic job fostering better communications, education, best practices and representing the best interest of the industry on Capitol Hill. I will miss the frequent contact of all of my colleagues but take satisfaction in knowing the industry has never been stronger and the future has never looked brighter.
South San Francisco, Calif.-based Core-Mark offers a full range of products, marketing programs and technology solutions to approximately 29,000 customer locations in the United States and Canada through 27 distribution centers (excluding two distribution facilities the company operates as a third party logistics provider). Core-Mark services traditional convenience retailers, grocers, drug, liquor and specialty stores, and other stores that carry convenience products.