Safeway CEO Steve Burd, seen in this 2008 file photo, will retire in May. (Doug Duran/Contra Costa Times archives)
Safeway CEO Steve Burd, seen in this 2008 file photo, will retire in May. (Doug Duran/Contra Costa Times archives)
CORRECTION (Published 1/4/2013)
Due to incorrect information from Safeway, a story about CEO Steve Burd's retirement misstated his age. He is 63. And because of incomplete information from the company, the story also misstated his undergraduate degree and the location of the college he attended. His bachelor of science in economics is from Carroll College, now called Carroll University, in Wisconsin.

PLEASANTON -- Safeway CEO Steve Burd, who elevated the company's brand and beat back steep industry competition while also taking a national role in health care reform, will retire in May after two decades leading the nation's second-largest supermarket chain.

Pleasanton-based Safeway announced Wednesday that Burd will officially step down at the annual Safeway stockholders meeting on May 14, nearly two decades to the day after he was tapped as the company's chief executive. He leaves on the heels of some of the most tumultuous years in the grocery industry, which saw stiff competition from niche grocers like Trader Joe's and big-box stores such as Target and Walmart, which expanded their grocery offerings while keeping labor costs low. They were challenges that Burd responded to with innovation in new products and marketing, and an eye on improving the health of Safeway employees -- and customers.

"He's certainly one of the leaders of this industry, and we need more people like that," said Phil Lempert, industry analyst and editor of SupermarketGuru.com.

Burd's departure shakes up the industry and kicks off what experts expect will be a turbulent year in the supermarket world. Fresh & Easy Neighborhood Market stores may be sold off by British supermarket giant Tesco and the expected sale of Albertsons continues to send shock waves through the industry. Walmart's grocery service, which offers same-day delivery in the Bay Area, has kicked the competition up a notch.

"I think it will be a transformative year in the industry, especially in California," Lempert said.

The board of directors will immediately begin a search for Burd's successor, and will look at internal and external candidates, although a Safeway spokeswoman declined to name any potential replacements.

Burd, 62, made his first move toward the door back in April, when he stepped down as president. He was replaced by Chief Financial Officer Robert Edwards.

Those who know him said Burd played a large role in improving the quality of Safeway's groceries and in the company's culture of health and wellness. While competitors were cutting costs and slashing employee benefits, Burd found innovative ways to encourage health and fitness in his stores while keeping health care costs down, according to Dave Heylen, vice president of communications for the California Grocers Association.

In a June 2009 op-ed in the Wall Street Journal, Burd wrote that Safeway's health-care plan, which awarded healthy behavior like exercising and not smoking, could be a model for the nation. He was involved in national health care reform discussions, and was a lead voice for the industry in talks around the Affordable Care Act.

"He definitely was a mover and shaker in the industry," Heylen said.

Burd, who joined Safeway in October 1992, declined a request for an interview, but said in a news release that he is leaving the company in part to pursue work in health care.

"While I still have the high level of energy and enthusiasm I brought to the company 20 years ago," he said, "I need more personal time and, given my extensive work in health care, I want to pursue that interest further."

As Burd tried to navigate the increasingly competitive grocery store landscape, he faced a number of battles with labor unions.

"The relationship (with Burd) was a little bit rocky at first," said Mike Henneberry, spokesman for United Food and Commercial Workers Union Local 5. "We had some pretty contentious back and forth."

Union leaders recently signed a new contract with Safeway after 15 months of negotiations, and have locked in pay and benefits for the next three years. Henneberry said that negotiations with Burd at the helm were consistently professional and often more productive than sessions with Safeway's competitors, and Burd never tried to lowball union members on their benefits.

"To Burd's credit, he kind of led the way on the health and wellness lifestyle" for employees, Henneberry said.

Burd also poured money into health research while establishing the company as an industry leader in philanthropy. He has been credited with raising more than $2 billion for charity, with $200 million for cancer research.

Contact Heather Somerville at 925-977-8418. Follow her at Twitter.com/heathersomervil.

steve burd
Age: 62
Residence: Alamo
Employment: Safeway president, 1992-2012; Safeway chairman of the board and chief executive officer: 1993-2013
Before joining Safeway: general management consultant for more than a dozen companies in various industries, including retail, consumer products, agriculture and oil and gas
Education: Bachelor of Arts in economics from Carroll College in Montana; Master of Economics from the University of Wisconsin