McCann To Replace Retiring Schlicker At AUSA; Retailer Prepared For Acquisitions

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Jeff Carr, Ahold’s chief financial officer, addressed the group after Boer and emphasized there were more savings and efficiencies to be gained by optimizing processes and systems; driving their “own brand” penny profits; improving labor efficiency and reducing shrink; improving “not for resale” sourcing; further optimizing U.S. and EU supply chain and cap-ex; and reducing information management and general and administrative costs.

The British born Carr added that simplification of certain functions including transportation, packaging and promotional effectiveness will also drive down costs.

In closing, Carr noted that Ahold’s financial strengths lie in its ability to generate significant cash as well as its balanced approached to capital allocation while being focused on continuing to return capital in the top quartile of its peer group sector.

The business sessions resumed the next morning with Sander van der Laan, COO of Ahold’s European operations. Van der Laan, who had a brief stint in the U.S. as CEO of Giant/Carlisle in 2008-2009, detailed Albert Heijn’s expansion into Belgium where it now operates 10 stores and its recent entry intoGermanywhere it now has two stores open. He also told the audience that Albert Heijn has more potential for growth in theNetherlandsand that Ahold is repositioning its retail banner in the Czech Republic, Albert, to create more value.

In what is likely to be his last public speech, Carl Schlicker summarized the strong market positions of its fourU.S.divisions which he claimed continue to post strong results because of solid execution from its 119,000 associates.

Currently there are 772 Giant/Carlisle, Martin’s, Giant/Landover and Stop & Shop units in the Northeast serving a trading area of about 38 million people and producing more than $25 billion in annual sales. Except for its number three ranking in the Metro NY market, all other Ahold USA banners rank first in market share in their core markets. Peapod, its Internet model, also ranks first among its peers.

Schlicker also stressed the flexibility of Ahold USA, noting that the company’s four U.S. divisions are able to act locally while still being able to leverage its combined scale. Also aiding growth is AUSA’s support structure – finance, legal, supply chain, marketing and merchandising, and human resources – and the talent level of its executives who supervise those functions.

He addressed the volume shifts that have been occurring at U.S. retail where other channels have been growing faster than the grocery segment, but noted grocery (supermarket) still controls two out of every three dollars spent on food.

Schlicker also emphasized that measuring unit sales provides him with the truest evaluation of growth and that Ahold USA has continued to increase unit sales performance despite the intense and diverse competitive landscape that it now faces.

In concluding, the veteran of nearly 40 years in the business summarized that each of AUSA divisions has targeted activities to ensure that it is well positioned to hold and grow their leading positions and that has helped produce continuing market share gains. He added that AUSA is executing on the “reshaping retail” framework to drive growth and that the company’s leading presence in its 10 state (plus Washington, DC) region has consistently delivered a healthy bottom line.