The turnaround at Ahold — particularly at its U.S. operating companies Stop & Shop and Giant-Landover — is progressing just as John Rishton said it would. The British-born chief executive officer at Ahold is building on a reputation as a man who can deliver on promises.
“When you reflect on what John says,” one analyst told SN, “you understand he doesn’t say anything without meaning he can execute on it too.”
In that sense, the strong rebounds at Stop & Shop and Giant come as no surprise. The most recent financial reports from Amsterdam-based Ahold showed the sister chains posting improvements in almost every metric, ranging from same-store sales to gross profit margins to store traffic and unit sales. These figures followed years of performance declines after a rocky integration and financial scandal under previous regimes at Ahold.
Their rebound came at a time when a deteriorating economy has made it difficult for consumers — and for many of Ahold’s competitors. But this, too, is an opportunity for Ahold, Rishton said. With improving operations providing a strong cash position and a clean balance sheet, Ahold can afford to keep the pressure on competitors, grow by acquisition, and develop new concepts, Rishton said.
“In this kind of environment, the inevitable is that the strong get relatively stronger and the weak get relatively weaker and that creates opportunities for the strong,” including Ahold, Rishton said during a conference call in late May. “So, we will obviously continue to look at opportunities both within our existing market areas and outside of our existing market areas, where we believe that with the capabilities and the skills that we have, we can generate profitable growth for the future.”
That future could include different kinds of stores, Rishton said, noting that until Ahold’s Giant of Carlisle division opened an experimental convenience-gasoline concept this spring, the company basically operated a single concept in the U.S. but multiple formats in Europe. The new focus on simplicity is allowing for smaller stores in the U.S.
— Jon Springer