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ZAANDAM, Netherlands — With fiscal 2024 off to a solid start, Ahold Delhaize is setting its sights on accelerating growth across the 16 brick-and-mortar retail and e-commerce brands that it operates in Europe, the United States and Asia. “Further simplifying our organization and maintaining a strong cadence in our Save for Our Customers program to sustain growth investments and drive innovation are key focus areas,” said president and chief executive officer Frans Muller.
Looking ahead to the company’s annual Strategy Day on May 23, Muller expressed satisfaction with what he characterized as a stable first quarter. Despite having to deal with ongoing concerns about food inflation, and reverberations from the divesture of FreshDirect in the U.S. and implementation of the Belgium Future Plan — which saw the conversion of all company-owned stores in the nation into affiliates — Ahold Delhaize generated sales of 21.7 billion euros, a 1.3% increase over the prior year at constant exchange rates, and an operating margin of 4%. Diluted earnings per share slipped 2.9%.
The company — whose U.S. holdings include the Stop & Shop, Food Lion, Hannaford, Giant Food and the Giant Co. supermarket chains — stayed on track by maintaining an intense focus on value, quality and savings, all through the lens of the customer. “We operate under 16 names because we believe the grocery business is best when it’s local and, over the years, our brands have built up a lot of trust in the communities we serve,” noted Muller during an interview following the earnings release. “We want all consumers to find the right mix in our stores for their wallet. With household budgets under pressure, we’ve invested heavily in our private label offerings. The other thing that is fundamental for us is that we believe in an omnichannel format. Each of our brands offers in-store and online sales because people have different customer journeys at different times.”
Ahold Delhaize’s unwavering concern for the customer is reflected in its capital expenditures program, which totals some 2.2 billion euros in the current fiscal year. Tools designed to help the retailer deliver on the promise of personalization have received a lot of attention in recent years.
“We invested heavily in digital, in data and in loyalty programs,” Muller said. “We can now clearly see that more personalized loyalty programs are very important to our customers; they want offers, promotions and savings focused on their specific needs. And those are things that our vendors also like, because then you have much stronger conversion for the invested promotional dollars.”
The strategy is paying off. In 2023, 71% of the company’s volume came through its loyalty programs. Impressive as that figure is, it’s only the beginning, according to Muller.
“We have quite a lot of rich data insights,” he said. “That doesn’t guarantee success. You must be able to work with the data insights effectively; you need a secured digital landscape, algorithms and category managers who know how to utilize the information to build stronger bonds with customers.
“At the same time, apart from using the data insights in personalized offers for our shoppers, we also see our retail media business as an additional source of revenue.”
Ahold Delhaize’s determination to leverage emerging opportunities and think outside the box will go a long way toward keeping the retailer at the forefront of the supermarket business. Examples of innovation abound. In addition to the Belgium Future Plan (which triggered a 17-day strike in 2023 before winning the acceptance and eventual backing of employees), the company is experimenting with plant-based food products and labels intended to encourage a reduction in carbon emissions. Ahold Delhaize recently launched a technology innovation center in Bucharest, and it has established a joint venture fund with four other notable global retailers — Shoprite from South Africa, Sobeys from Canada, Tesco from the United Kingdom, and Woolworths from Australia.
Muller stressed that “innovation will remain a priority going forward. Our customers can count on us to continually test new ideas. It’s in our DNA.”
