ZAANDAM, Netherlands -- Ahold here said last week it will convert its 75 Edwards stores in New York and New Jersey to the Stop & Shop banner by the end of this year.
Edwards has been operating as a division of Giant Food Stores, Carlisle, Pa., since mid-1996 but will be switched to the Stop & Shop banner beginning this summer "because the Edwards format is closer to Stop & Shop's high-low format than to the everyday-low-pricing format under which Giant operates," an Ahold official told SN.
Both Giant and Stop & Shop are divisions of Ahold USA, Chantilly, Va.
Ahold also announced a series of executive changes last week intended to strengthen the company's growing U.S. operations. Chief among those changes was the appointment of Bob Tobin to the new post of chairman of Ahold USA, effective in September.
Succeeding Tobin as president and chief executive officer of Ahold's U.S. operation will be William Grize, Tobin's successor two years ago as president and CEO of Quincy, Mass.-based Stop & Shop.
In other executive-level changes:
Steve Odland, president and CEO of Tops Markets, Buffalo, N.Y., will become chief operating officer of Ahold USA, a new position, effective next month. The company said his primary focus in that post will be on future growth opportunities across all companies in such areas as marketing, information technology, e-commerce and new ventures, including transitioning new channels of trade into Ahold USA.
Marc Smith, chief operating officer of Stop & Shop, will succeed Grize as president and CEO of Stop & Shop, effective in September.
Frank Curci, chief operating officer of Tops, will succeed Odland as president and CEO of Tops, effective in June.
The company said Marsh Collins will continue as president and CEO of Ahold USA Support Services, where he oversees direction of all supply-chain activities, synergy initiatives and development and implementation of integration plans.
It also said Jim Miller will continue as president and CEO of U.S. Foodservice, Columbia, Md., which Ahold acquired in April.
Meredith Adler, a securities analyst with Lehman Bros., New York, told SN the planned conversion of Edwards to Stop & Shop "is an interesting and positive development.
"Edwards has struggled as an EDLP operator -- a format that works well for Giant of Carlisle but hasn't worked for Edwards -- and, given the demographics and target markets where Edwards operates, it probably makes more sense to operate with Stop & Shop's high-low approach to pricing."
Adler said she believes the stores might have a difficult transition period as Ahold changes the name and format. "There could be some disruptions in the customer base, but eventually it should make the operation stronger," she said.
Ahold had originally contemplated folding Edwards into Pathmark Stores, the Carteret, N.J.-based chain it had hoped to acquire; that deal was called off at the end of 1999.
According to Adler, "Ahold would have preferred to fold Edwards into Pathmark, which is a bigger, stronger entity in the region than Stop & Shop, but Stop & Shop's success in the Connecticut suburbs should translate into success in the New Jersey and Long Island suburbs that serve the same kind of clientele."
Jonathan Ziegler, San Francisco-based managing director for Deutsche Banc Alex. Brown, New York, said Edwards has a very low market share in the New York metropolitan area and has had difficulties in New Jersey competing with ShopRite, the region's EDLP leader, "so it makes sense for the company to take a different approach."
Commenting on the personnel changes, another analyst, who asked not to be identified, said Tobin has done "a remarkable job, considering that he was supposed to retire three years ago. But Ahold talked him into staying on, at least until Giant Food [of Landover, Md.] was integrated, and that has proved to be a resounding success.
"In his new position perhaps Tobin intends to take things a bit easier, though there's little sign of that happening.
"There's also been a question as to who would succeed Tobin, and that has been answered with Grize's promotion. But Grize had some things to finish off at Stop & Shop, including launching its Internet business with Peapod. Now that that's happened, and Ahold is in the process of acquiring Peapod, Grize is in a great position to continue growing the company."
Commenting on Tobin's elevation, Cees van der Hoeven, president and CEO of Ahold, said, "The appointment recognizes the considerable contribution Bob has made to the growth of our U.S. operations in a short period of time.
"Under his leadership Ahold USA has grown from $14.3 billion in sales to a multichannel food provider with annual sales of over $30 billion. The success is also reflected in autonomous annual growth of over 7%, significant top- and bottom-line contributions from acquisitions and synergies and the rapid increase in customers shopping Ahold stores."
Speaking of Grize, van der Hoeven said, "He is a seasoned executive [whose] track record at Stop & Shop and credibility within the industry will serve him well in leading Ahold USA to even greater achievements."
According to Tobin, "Ahold USA has experienced spectacular growth in the past three years -- a joint accomplishment [shared with] the seasoned and well-experienced executives who played a vital role in Ahold's success.
"My task when I became president and CEO of Ahold USA in the summer of 1998 was not only to grow our company but also to build an organization capable of driving our business into the future. While we have doubled volume and returns, we also developed an extremely talented group of executives.