Ahold Delhaize Presents Better Together Strategy, Gives Update on Integration and Finance
LONDON, UK and ZAANDAM, THE NETHERLANDS – Ahold Delhaize unveiled its Better Together strategy this morning, giving an update on integration and the state of the company’s financial framework. The announcement follows the completion of the merger between Ahold and Delhaize Group in July 2016.
"We are excited to share our Better Together strategy, which builds naturally on our combined strong performance as well as the strong foundations of the local brands in our group,” Dick Boer, CEO of Ahold Delhaize, said in a company release. “Guided by this common compass, we will continue to improve our family of brands to be a better place to shop, a better place to work, and a better neighbor, every day. We are meeting the needs of customers today and anticipating those of tomorrow, by providing more value, quality, and convenience.”
The company announced three key pillars of the Better Together strategy at its Capital Markets Day in London:
- Save for its customers: Buy better, Operate smarter, Waste less
- Invest in its customer propositions: Affordable for all, Best own brands, fresher & Healthier, Most local & personal service
- Funding growth in key channels: supermarkets, e-commerce, and smaller formats
According to a company release, Ahold Delhaize’s Better Together strategy will drive profitable growth and deliver the benefits of international scale, combine strong local brands and experienced local associates while driving savings and investments to benefit customers and create value for shareholders.
Growing supermarkets is a priority for the company, stating the strategy offered a number of specifics goals, including:
- Delivering €80 million (approximately $85.98 million) in savings in 2018 for Delhaize Belgium through a Transformation Plan and New Store Organization at its 128 company-operated stores.
- Adding 160 additional Food Lion stores in 2017, bringing the total number of stores to 540 as part of the company’s Easy, Fresh, and Affordable strategy.
- Continuing Ahold USA’s “Heading Northeast” strategy with investments in pricing, service, and quality that the company thinks will pay off in gains in customer perception and sales volume increases.
Additionally, the company is looking to double its e-commerce sales of €2.3 billion (approx. $2.47 billion) by 2020, looking to build e-commerce platforms in the Netherlands and Belgium.
The company also weighed in on the progress of integrating operations after a merger earlier this year.
"Our integration is on track and we have a clear plan to deliver €500 million (approx. $537.46 million) in net synergies in 2019,” said Boer. “We are convinced more than ever that our merger is the right combination at the right time. Driven by our purpose 'Together, we build great local brands, bringing fresh inspiration every day,' we will continue to shape a stronger future for Ahold Delhaize, providing fuel for the brands to grow to the benefit of customers, associates, communities and shareholders."
The company remains committed to delivering net synergies of €500 million (approx. $537.46 million) in 2019 and incremental to operating income, the press release states. Ahold Delhaize also confirmed integration costs will total €350 million (approx. $376.22 million) for 2015-2019.
For more on the company’s strategy going forward, and continuing developments as the recently-merged company continues to streamline and thrive, check in with AndNowUKnow.