Ahold Delhaize’s Leading Together Strategy Focuses on 3-Year Growth
Ahold Delhaize introduced its Leading Together strategy at the 2018 Capital Markets Day in New York City. Supported by its local banners, best-in-class cash generation and balanced approach to capital allocation, this comprehensive strategic program focuses on driving comparable-sales growth and market share gains over the next three years.
Frans Muller, president & CEO of Ahold Delhaize, said: “In an industry that’s undergoing rapid change, fueled by shifting customer behavior and preferences, we will focus on growth by investing in our stores, omnichannel offering and technological capabilities which will enrich the customer experience and increase efficiencies. Ultimately, this will drive growth by making everyday shopping easier, fresher and healthier for our customers.”
In the next three years, Ahold Delhaize expects to deliver comparable-sales growth and market share gains as well as a doubling of net consumer online sales to around €7 billion (US $7.88 billion) by 2021. While investing in growth, the company will maintain a disciplined approach to capital investment and allocation, supported by a €1.8 billion (US $2.03 billion) cumulative Save for Our Customers cost program through 2021 and free cash flow of around €2 billion (US $2.25 billion) per year from 2019 to 2021. Capital expenditure will be around 3 percent of annual sales during the coming three years.
In the United States, the retailer plans to reposition Stop & Shop, its largest U.S. brand with more than 400 locations, with a focus on the new tagline: Fresh Food & Value Made Easy… So you can enjoy what matters most. All stores will be repositioned in the next five years to focus on five key areas: Best in Fresh, Value for Money, Right-for-Me Assortment, Make It Easy and Emotionally Connected.
The new five-tier concept is being tested in 21 stores in the Hartford, Conn., market and results so far have shown increases in sales, transactions, volume and net promoter score (NPS), with a $70 million capital expenditure. The next market to be converted will be Long Island, N.Y., in spring 2019, with all stores scheduled for conversion by 2023 and a total capital expenditure of up to $2 billion.
Details for the five key areas are:
Best in Fresh
- Larger fresh footprint in stores
- Differentiation in produce and meat through freshness, quality, value and variety
- Expanding and innovating home meal solutions -- ready to eat, heat or complete
Value for Money
- Meaningful price investment
- Amped up value messaging and visual merchandising to improve price perception
- Fully integrated omnichannel commercial planning
- Building new tools and processes to develop assortments by category by store
- Optimizing assortment and space
- Creating experiences in the center store
Make It Easy
- Frictionless checkout with interactive kiosks, digital coupons and loyalty
- Click-and-collect at all stores
- Micro-fulfillment center partnering with Takeoff Technologies
- Stop & Shop ecommerce enabled through full Peapod integration
- Simplified layout for different trip missions
- Engaging and uncluttered store format
- Helping communities enjoy better food and better lives
- Building on legacy of caring for customers, communities and each other
- Growing NPS and associate engagement