Ahold Delhaize aims to revamp U.S. grocery business

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Ahold Delhaize aims to revamp U.S. grocery business

By Gina Acosta - 08/08/2018
Netherlands-based Ahold Delhaize, which owns Peapod, formed in July 2016 from the merger of Ahold and Delhaize Group,

The new CEO of Ahold Delhaize plans to reignite sales growth in the United States with a slew of digital initiatives.

On the same day that Ahold reported sales declines and profit increases for the second quarter, CEO Frans Muller told Bloomberg that the company is not satisfied with its current online growth in the U.S., which is why the company announced plans to set up a center called Peapod Digital Labs in Chicago to redevelop its U.S. online strategy. He told Bloomberg the project aims to boost online growth in the market to more than 10 percent by next year.  

Muller also told Bloomberg that Ahold Delhaize would take an “active role” if consolidation opportunities arise in existing markets.

In the second quarter, sales at Ahold declined 3.7 percent from a year earlier to 15.5 billion euros ($18 billion), while net profit rose to 410 million euros from 355 million euros as underlying margins improved fractionally in the United States. U.S. same store sales were essentially flat.

The company said the numbers were impacted by the inclusion of Easter holiday in the second quarter of 2017, and sales would have risen 2.4 percent if adjusted for currency and other changes.

"We had a strong quarter and the quarter was positive on sales but, at the same time, slightly impacted by the different timing of Easter," Muller told CNBC's Squawk Box Europe on Wednesday.

Muller, a former Delhaize executive, took the top job from Dick Boer, who retired in April.

"I think it is clear that the U.S. market is very competitive, both from an online perspective but also from a store perspective … And this quarter we did not lose market share, we gained market share or we were flat in market share so I think we did the right things to compete.

"We continue to innovate and improve our offering, focusing on health and convenience. During the quarter, various initiatives were deployed both in the United States and in Europe, offering our customers choices for a more healthy lifestyle. These initiatives included the launch of the My Nutritional Value online tool to help Albert Heijn customers gain more insight into the nutritional value of their groceries. Throughout our network, we continue to make shopping more convenient in our stores, by expanding our range of meal kits and freshly made meals, providing an easy solution for time-constrained customers, and by piloting and rolling out seamless checkout options for customers," Muller said.

 

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