AMSTERDAM — Ahold will look toward further cost reductions to fund investment in stronger brands and generate higher sales, officials at the company’s Capital Markets Day event here said Monday.
Ahold’s strategy includes boosting private-brand penetration, growing online sales and benefiting from common processes and systems worldwide, Dick Boer, chief executive officer, said.
In the U.S., a restructuring of the company creating four local operating groups under central Ahold USA control generated savings in excess of targeted levels and inspired a new plan to reduce costs companywide by around $471 million over the next three years, said Carl Schlicker, chief operating officer of Ahold USA. Savings will be derived by applying the global business model; focusing on savings in store expenses, supply chain and overhead; and driving “transformational” changes in the way the company does business, he said.
In crafting its U.S. businesses under four local groups (Stop & Shop New England, Stop & Shop-New York Metro, Giant-Carlisle and Giant-Landover), Ahold also moved to a common system for point of sale throughout the U.S. and crafted an organization that mirrors Ahold’s European businesses. Businesses on both continents today use a common alignment, Schlicker explained, helping the company to use fewer IT vendors.
The company said it would look to triple sales from its Peapod (U.S.) and Albert (Netherlands) online businesses, citing explosive growth of mobile devices. James McCann, Ahold’s chief commercial and development director, said the company would experiment with broadening its online offering including testing curbside and store pick-up options in 2012 to spark a 2013 rollout and help reduce costs.
Jeff Martin, executive vice president of merchandising and marketing, said the company would look to grow identical sales by 1% to 2% through customer loyalty initiatives, saying Ahold has developed programs to target promotions relevant to the frequency and style of its shoppers.
