It’s been a busy month for Ahold, the Northeast’s largest supermarket chain. On November 1, the company announced announced that its current top man in the U.S., Carl Schlicker, will be retiring on February 1, 2013. He will be replaced by James McCann, currently executive VP and chief commercial and development officer for the Amsterdam based retail organization. He will shortly be relocating to the U.S and be based in Carlisle, PA. In addition to his new role, McCann also will continue as a member of Ahold’s corporate executive board.
Later that month, on November 28-29, the global retailer held its annual “Capital Markets Days” at the Westin Hotel in Philadelphia.
The two day business session, which was attended by European and U.S. financial analysts and a handful of journalists, provided a snapshot of Ahold’s accomplishments in 2012 while also revealing plans for fiscal 2013 and beyond.
Opening the meeting was Ahold’s CEO, Dick Boer, who updated the group on the retailer’s “reshaping retail” platform, the cornerstone of its growth initiative. “We are very pleased with the progress we are making on our strategy, for Ahold to remain successful and at the forefront of the food retail industry, Boer said.
“In the next two days, we are providing an update on the progress we have made. We will present a number of initiatives for the near future, including acceleration of our multi-channel offering and expansion of our online and offline reach. We continue to improve our competitiveness, drive sales, gain market share and control costs. By performing in the top quartile of our peers in food retail, we want to continue to provide attractive, sustainable returns for shareholders,” Boer noted.
He added that Ahold has taken many steps to enable and create growth since the previous Capital Markets Day in the Netherlands 12 months ago. “We expanded our geographic reach with store openings and acquisitions in existing and adjacent markets in the United States and Europe. Our online retail operations continued to achieve double-digit sales growth. We have introduced pick-up points in our major markets to allow customers to order online and collect their groceries at designated locations, and we have also created bol.com pick-up points in 59 Albert Heijn stores.
“Meanwhile, we continue to refresh and update our existing store base. We have remodeled 50 Giant/Landover and Stop & Shop stores and converted nine Albert Compact Hyper stores in theCzechRepublic. We are also redesigning the Albert Heijn to go convenience format in theNetherlands.”
Boer also told the group of about 125 that going forward Ahold “will convert the majority of 82 C1000 /Jumbo stores to Albert Heijn in 2013; double our Albert Heijn store base in Belgium in 2013, where we are on track to operate a minimum of 50 supermarkets by 2016; further invest in our online offering to boost growth at Peapod, albert.nl and bol.com, expanding our home delivery service with increased assortment and an improved proposition; significantly increase test pick-up points in our major markets in 2013 and expand the option for customers to pick up their bol.com products in almost all Albert Heijn stores; and increase our existing cost savings program from €350 million ($455 million) to €600 million ($780 million) by including sourcing and promotional expenditures, to fuel investments in a better offering and value for customers.”
In the U.S., which represents more than 60 percent of Ahold’s total sales, Boer asserted that the company would escalate its existing cost savings programs while continuing to improve efficiency in fiercely competitive markets that have impacted Ahold USA’s gross margins.
Boer addressed Ahold’s continued priority to accelerate its online growth, noting that online shopping has resulted in the biggest shift in a fast changing retail landscape.
He pointed to increased capital expenditures dedicated to improving Ahold’s online offering (including mobile applications), significant new investment in its Peapod division and its acquisition last year of bol.com, the Netherlands-based Internet sales organization which Ahold acquired earlier this year.
“People want to shop online, and more and more are selecting the products in the store and shopping online for them. That dramatic shift brings us clearly to a new era, and a big change in our industry. And we are ready for that,” Boer said.
The 55 year old Dutch chief executive also offered three promises that the company will work diligently to focus upon: being a better place to shop, being a better place to work, and being a better neighbor.
“These promises are may be simple, but they should be simple so we can use them for all of our stores. They are simple words, but they are so important, because if we can deliver on these words in our stores that will make us very successful,” Boer said.