In May 2024, Ahold Delhaize introduced the “Growing Together” strategy, establishing ambitious growth and investment horizons aimed for 2028. This initiative emphasizes a multi-stakeholder approach, aligning the needs of customers, employees, and societal expectations, as outlined by CEO Frans Muller during the strategy’s launch at the company’s headquarters in Zaandam, Netherlands.
The “Growing Together” strategy focuses on six core priorities:
1. Thriving People: A commitment to creating an inclusive workplace that values everyone, promoting collaboration and personal growth.
2. Healthy Communities and Planet: Initiatives aimed at fostering a sustainable food system, enhancing the health of the communities served.
3. Vibrant Customer Experiences: A move towards offering a more integrated ecosystem of products, services, and data, enhancing customer engagement across all touchpoints.
4. Trusted Products: Assurance of healthy, fresh, and affordable items for customers.
5. Driving Customer Innovation: Investment in new business avenues and innovation, aimed at meeting evolving consumer demands.
6. Portfolio and Operational Excellence: Utilizing technology and data for efficient operations, ultimately passing savings on to customers.
One significant aspect of this strategy is the decision to close underperforming Stop & Shop locations in several Northeastern states. Out of nearly 400 locations, 32 stores will be shuttered by November, which is part of a broader revitalization strategy. Gordon Reid, president of Stop & Shop, emphasized the commitment to enhancing customer value through multi-year price investments and continuous savings efforts.
While these store closures highlight necessary recalibrations within the business, the “Growing Together” initiative lays out an expansive growth roadmap across Ahold Delhaize’s various brands, especially in the U.S. market. Ahold Delhaize USA, which comprises popular stores such as Food Lion, Giant Food, and Hannaford, operates as the largest retail group on the East Coast.
Strategic Growth Across Brands
JJ Fleeman, CEO of Ahold Delhaize USA, emphasized that each brand’s unique local heritage and strengths will be crucial as the company cultivates relationships with existing and new customers. Each brand aims to deliver seamless, omnichannel shopping experiences, enhancing customer loyalty across various channels.
The upcoming four years will see these brands remodel and/or add over 1,000 stores, investing more than $1 billion in price initiatives and digital capabilities. This financial commitment is designed to elevate customer engagement and provide tailored experiences. According to Fleeman, this period represents a chance to improve core brand value, aligning products more closely with customer needs leveraging economies of scale.
Brand-Level Initiatives
– Food Lion: With over 1,000 locations in the Southeast, this brand plans to accelerate growth through market expansion and an enhanced omnichannel remodel program. In response to changing consumer needs, Food Lion prioritizes both fresh produce and meal solutions, tapping into local supplier networks to provide unique offerings.
– Hannaford: This brand aims to harness its positive market reputation to implement targeted remodels and expand into high-growth areas, further solidifying its footprint.
– The GIANT Company and Giant Food: Both brands intend to fortify their leading market positions through strategic investments and remodeling efforts. The GIANT Company’s successful Choice Rewards loyalty program underscores its customer-centric focus, as nearly 90% of transactions involve loyalty card holders.
Innovative Customer Engagement
At the heart of Ahold Delhaize’s strategy lies its own-brand offerings. Observing that 95% of U.S. shopping baskets contain own-brand items, Fleeman noted the intent to further these offerings significantly. Over the next four years, a planned $1 billion investment in own-brand products aims to provide exceptional value amidst rising consumer price sensitivity.
Additionally, the company plans to enhance customer relationships through personalized pricing and promotions, targeting more than 50% digital customer engagement by 2028. The strategic pivot to utilizing technology, data, and AI underpins these customer engagement efforts, aimed at refining personalization and creating seamless shopping experiences.
Operational Efficiency and Community Engagement
Ahold Delhaize recognizes the importance of operational efficiency to support its ambitious growth trajectories. Streamlining operations, enhancing supply chain efficiency, and fostering cost-effective e-commerce fulfillment are key strategies to ensure customer satisfaction and loyalty.
Moreover, Ahold Delhaize remains deeply committed to community engagement, emphasizing the importance of local connections. The company has already donated over one billion meals since 2020, reflecting its ongoing commitment to corporate social responsibility.
In summary, Ahold Delhaize’s “Growing Together” strategy marks a pivotal moment for the company as it charts a course for substantial growth in the retail landscape. By investing in its people, enhancing customer experiences, and optimizing operations, it seeks not just to navigate challenges but to thrive in a competitive business environment over the next four years.
