Ahold Delhaize Moving To More Decentralized U.S. Merch Model

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Ahold USA and Delhaize America, the U.S. units of recently merged retailer Ahold Delhaize, announced on February 6 another major step in the integration of efficiencies for the two companies. Last month, the large global merchant began operating its newly created Retail Business Services (RBS) unit led by Roger Wheeler.

RBS was designed to drivAe synergies and best practices as well as provide expertise, insights and analytics to the Ahold USA and Delhaize America brands to support their respective strategies. In addition to commercial support, the responsibilities supervised by RBS include financial services, not-for-resale procurement, legal services, information technology, and people systems and services.

That would leave the merchandising, marketing and store operations of the Stop & Shop, Giant/Landover, Giant/Martin’s, Peapod, Food Lion and Hannaford banners/brands to fully focus on building their positions in their respective markets and potentially delivering more for their customers.

With its announcement earlier this month, the retailer shed more light on what improving its individual banners/brands really means.

Each of the “brands” will have distinctive commercial strategies that are tailored to local markets with dedicated resources, including category merchandising, assortment, pricing, promotions, marketing and format teams. This brand-centric structure, which is expected to be completed by early 2018, will better position the Ahold USA and Delhaize America brands to be even more closely connected to their customers and communities, the retailer stated.

“Positioning the Ahold USA brands to be even closer to their customers will not only help them deepen their connection in their local communities and win in their markets, it will ensure that associates have exciting and rewarding opportunities to make meaningful contributions to each brand’s success,” said Kevin Holt, chief operating officer of Ahold USA.

“Today’s announcements will further strengthen Food Lion and Hannaford’s strong brands,” said Frans Muller, acting chief operating officer of Delhaize America and deputy CEO of parent Royal Ahold Delhaize. “The brand-centric structure will enable our Food Lion and Hannaford associates to build even stronger relationships with existing customers and communities in the markets they serve, and win new customers to grow their businesses.”

Ahold USA also announced that its Stop & Shop New York Metro and Stop & Shop New England divisions will be consolidated into one brand organization (last month former Stop & Shop-New York Metro president Don Sussman was moved to the EVP-merchandising post at Ahold USA in Carlisle following the resignation of former AUSA chief merchant Andrew Iacobucci). The company noted that having a single-banner organizational structure dedicated to Stop & Shop will strengthen the division and will ensure it can better leverage its brand to serve the unique needs of customers in the different markets that Stop & Shop serves. The company’s Fresh Formats LLC unit, which currently includes three 10,000 square foot bfresh specialty stores, will now become part of Stop & Shop’s management structure, too.

Delhaize America and Ahold USA brands will maintain their current respective office locations in: Quincy, MA (Stop & Shop); Salisbury, NC (Food Lion); Carlisle, PA (Giant/Martin’s); Scarborough, ME (Hannaford); Landover, MD (Giant/Landover); and Skokie, IL (Peapod). Ahold USA brands and Delhaize America brands that have regional support offices now will continue to have brand support offices throughout their market areas.

In addition, the supermarket chain announced that the banner/brand leadership team will remain in place including: Mark McGowan, president, Stop & Shop; Tom Lenkevich, president, Giant/Martin’s; Gordon Reid, president, Giant/Landover; Jennifer Carr-Smith, president, Peapod; Meg Ham, president, Food Lion and Mike Vail, president, Hannaford.

“I’m very excited about the brand-centric model at Ahold USA and its brands, which puts the customer at the center of all we do,” said Holt of his Ahold USA team. “Mark, Tom, Gordon and

Jennifer all have proven track records and they are the right leaders for our great local brands.”

Muller also expressed support for the leaders at Food Lion and Hannaford: “I am extremely pleased that Meg and Mike will continue to lead and drive the successful strategies of Food Lion and Hannaford. We have every confidence in the continued success of Food Lion and Hannaford under their leadership.”

In addition, the following executive appointments in the U.S. will become effective when the brand-centric organization is complete, which is expected by early 2018, and will report to Royal Ahold Delhaize in Amsterdam: Greg Amoroso, executive VP, U.S. CFO; and Linn Evans, executive VP, U.S. chief legal officer.

The following executives will report to Retail Business Service when the brand-centric organization is complete: Kathy Russell, executive VP – people systems and services; JJ Fleeman, executive VP-commercial services and strategy; Chris Lewis, executive VP-supply chain; and Paul Scorza, executive VP-CIO.

The Ahold USA and Delhaize America brands will continue to operate as independent companies in the U.S. and will continue to serve their local customers’ needs and be strong community partners in their respective markets. While this is the second key announcement to be made in the last eight weeks, expect several more waves of details in the new few months. Some related topics of interest to the more decentralized “brands” focus includes the deployment of individual merchandiser/category managers at each AUSA banner and what will be the new protocol between the banners/brands and the current centralized merchandising platform that has existed in Carlisle since 2009.

Other potential synergy/integration initiatives are explored in this month’s “Taking Stock” column on page 6.