Ahold Delhaize USA proved to be up to the challenge when online grocery orders exploded following the coronavirus outbreak, according to JJ Fleeman, the company’s chief e-commerce officer and president of its Peapod Digital Labs unit.
As at other retailers, Ahold Delhaize USA — whose chains include Stop & Shop, Giant Food, Giant/Martin’s, Food Lion and Hannaford — has seen booming online grocery sales during the COVID-19 pandemic. Online sales rose 42% for the first quarter ended March 29 — which covered only the first couple of weeks of the pandemic — and then jumped 127% for the second quarter ended June 28. For the first half, online sales ended up growing 84%.
“Almost immediately, we saw e-commerce sales jump over 100% — really kind of overnight,” Fleeman said in an SN Off the Shelf podcast. “The biggest challenge we had, like many other retailers and manufacturers, was responding to the surge in demand. Our supply chain team did a great job in deploying innovative sourcing methods and new ways of procuring product, even standing up a temporary distribution center. And, obviously, we had to rapidly hire and on-board a lot of new people to keep the [supermarket] brands in stock through all those channels. Work continues today to stock up on the key items for winter and the busy holiday seasons, but we’ve made tremendous progress.”
The sharp e-commerce gains now have Ahold Delhaize USA projecting a more than 75% increase in U.S. online sales for fiscal 2020, up from its previous estimate of more than 50% and its initial forecast of over 30%.
That has led Ahold Delhaize USA to step up an already aggressive e-commerce expansion. In 2020, online grocery capacity is slated to grow by 70%. Plans call for same-day delivery to be added at over 600 Stop & Shop and Food Lion stores and the number of pickup sites across the company’s grocery brands to climb from 765 at the end of the second quarter to 1,100 by the fiscal 2020 year-end.
“What’s important to note is that we were in a really strong position when COVID-19 hit,” said Fleeman. “For the year or so prior, we had been doubling down on omnichannel, and the brands have been expanding with click-and-collect and delivery. We’d also just announced a major supply-chain investment and transformation. So we had the right efforts under way, but certainly it was a real acceleration.”
Fleeman has been Ahold Delhaize USA’s chief e-commerce officer and president of Peapod Digital Labs since May 2018. Peapod Digital Labs provides omnichannel solutions and services to Ahold Delhaize USA’s grocery chains. He previously served as executive vice president of commercial services and strategy for Retail Business Services (RBS), the company’s services arm. Before that, he was chief strategy and development officer at Delhaize America and served in a range of vice president roles at Food Lion.