A Year Later

Ahold and Delhaize merged just over a year ago. The changes are more obvious in Europe, though Roy White notes there are significant shifts stateside as well.

Roy White
A Year Later
February 2018
 
Ahold and Delhaize have been merged for little over a year. In Europe, there’s a new Global Office Services HQ group, stores have been sold off to satisfy regulations, and management has undergone some shake-ups. Sales and underlying operating income have risen substantially on a proforma basis.
 
In the US, results from new programming are still to come. Top management at Ahold Delhaize has decided to consolidate its US operations into a single company, Ahold Delhaize USA. It had been creating a highly decentralized operation with Ahold USA and Delhaize America operating as separate entities. A Retail Business Services group had been formed to handle own brands, digital, HR, IT and supply chain.
 
Now, however, the brands – Stop & Shop, Giant, Food Lion and Hannaford, along with Peapod and the Retail Business Services group – will directly report to the new parent entity.
 
Ahold Delhaize continues to work towards a “brand-centric” organization. The store groups, along with Peapod, handle marketing, merchandising, category management and pricing designed for local customer bases, and the Retail Business Services group will provide support just as before. 
 
Ahold Delhaize continues to ramp up online activities. Stop & Shop and Giant have increased the number of digital coupons, created new websites, set up a new recipe center and has improved its mobile apps. The result has been record digital customer engagement, activation, and redemption. There are over 1 million new digital users, a 20% web traffic growth rate, and 70% more monthly mobile app users. At Food Lion and Hannaford, a personalized digital loyalty program is being instituted.
 
Peapod, too, is getting more attention and is growing. Investment in Podpass memberships – which provides free delivery at a fixed fee – has produced improved renewal rates. This is a key issue, since Podpass members tend to spend more.
 
Stores are being upgraded. At Stop & Shop and Giant, the roll-out of new bakery and produce layouts is pretty much completed, pricing has been made more competitive, and a deli grab-and-go program is being installed across the chains. At Food Lion, the Easy-Fresh-&-Affordable program continues to be rolled out with remodels covering nearly half the stores. 164 units were converted in the third quarter.
 
Ahold Delhaize USA, with nearly 2,000 units stretching from Maine to Georgia, is a potential supermarket powerhouse. However, the new programs and brand-centric philosophy apparently still have a ways to go before producing a highly dynamic, rapidly growing operation. The next year will show if the consolidation of top US management is the answer.
 
For PLMALive, I am Roy White.
 
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