Mr. McDonald, senior VP-marketing & communications, says he had never heard of the chain before a headhunter called six years ago to interest him in the job. At the time, he was engineering a turnaround at Payless Shoe Stores.
Still, he drove three hours to visit a store in Omaha, Neb., and was struck by the store's tidy appearance. He signed on as the chain's top marketing executive and set to work developing a neat, clean marketing plan to match the retailer's merchandising.
The stores dropped departments, such as automotive, crafts and men's dress shirts, in favor of a few categories it could dominate, such as ready-to-assemble furniture.
Mr. McDonald improved the quality of the chain's circulars by upgrading the quality of paper and bringing uniformity to what he calls "the engine of our business."
He hired a new ad agency, Campbell-Ewald, Warren, Mich., and came up with a new tag line, "Neat stuff. Neat store," showing off the ShopKo experience.
ShopKo reports five consecutive years of growth in its earnings and sales at stores that have been opened for more than one year.
Although ShopKo competes with Kmart Corp., Target Stores and Wal-Mart Stores, it is carving its own niche to compete with the big three.
"If you try to be mini-versions of them, you're going to lose," says Mr. McDonald.