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Ahold Delhaize unveils growth plan

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ZAANDAM, Netherlands — Ahold Delhaize has unveiled a new growth and investment plan that promises to generate an extra €10 billion ($11.31 billion) in sales by 2025 by strengthening the company’s omnichannel capabilities while supporting its vision of offering the “leading local food shopping experience for customers.”

Company president and chief executive officer Frans Muller said the company is doubling down on four strategic priorities over the next four years:

• Serving customers better through the development of deeper digital relationships.

• Accelerating the company’s omnichannel transformation while continuing to be the best local operator.

• Leading the transformation into a healthy and sustainable food system.

• Leveraging the company’s portfolio to create the ultimate ecosystem for smarter customer journeys.

“Our Leading Together strategy has proven to be strong in recent years, and is a great foundation as we head into the future,” Muller said. “The COVID-19 pandemic put our people and our strategic choices to the test, and through it all we were able to always deliver for our customers, our communities and our associates in all the brands and support companies.

“I cannot stress enough how proud I am of our achievements. The pandemic has accelerated the pace of change in the retail industry. It has also changed consumer behavior permanently, with people shopping more online, eating more at home and having a bigger interest in local and healthier food.”

Customers are looking for high-value, convenient and personalized solutions — and the ability to shop whenever and wherever they want, the company said. With that in mind, Ahold Delhaize said it will invest in its brands to provide shoppers relevant products and services, promotions, tailored customer experiences and premium subscription memberships. To enable customers to shop in this way, Ahold Delhaize will accelerate its investments in building scalable and repeatable operational capabilities, with a sharper focus on digital, online, data and automation.

In doing so, Ahold Delhaize expects to accelerate net sales growth with €10 billion in incremental sales from 2023 to 2025. Net consumer online sales are planned to double between 2021 and 2025. In addition, Ahold Delhaize plans to have e-commerce profitable on a fully allocated basis by 2025.

“To support these plans, the company will increase investment levels from 3% to 3.5% per annum to fuel growth,” Ahold Delhaize chief financial officer Natalie Knight said. “We will continue to be the best operator in the industry, underlined by our world-class operating margins. As part of our planning toward 2025, we are committing to even more ambitious Save for Our Customers targets: about €4 billion by 2025. We will also use our knowledge and experience to make e-commerce profitable by 2025, and I am pleased to announce a planned €1 billion share buyback for 2022.”

In the U.S., Ahold Delhaize plans to build on a supply chain transformation it began in 2019.

“With these changes, Ahold Delhaize USA will have full control of its supply chain and an optimized network at scale, which enables the local brands to better serve their customers, allows ADUSA to continue to invest in automation and digital capabilities to lower costs to serve, and ultimately enables direct to customer relationships as part of its omnichannel network,” Ahold Delhaize USA CEO Kevin Holt said. “The transformation will create one of the largest supply chain networks on the East Coast. It is scheduled to be finished in April 2024, with 26 facilities in the integrated self-distribution network.”

Ahold Delhaize said that the strong local presence of its brands is a key factor in their success, and pointed to the New York metro area as an example, where the company says its Stop & Shop and Fresh Direct units and their partners have formed an ecosystem to deliver fresh and healthy food wherever, however and whenever New Yorkers wish to shop.

Ahold Delhaize said it will also further invest in, sharpen and strengthen its initiatives that are designed to support a healthy and sustainable food retail system.

The company said it is committing to achieving net zero carbon emissions across its own operations no later than 2040 and to becoming a net zero business across its entire supply chain, products and services by 2050.


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