Ten years after the merger: “Strong local brands make Ahold Delhaize unique”

Nearly ten years ago, the merger between the Dutch company Royal Ahold and the Belgian Delhaize Group was finalized. CEO Frans Muller sees the strength of as many as 17 local brands as a key factor in the company’s success.

The secret sauce

A phone call from Frans Muller, then CEO of Delhaize Group, to Dick Boer, CEO of Ahold, in the spring of 2015 set in motion a process that ultimately led to the completion of the merger between the two companies on July 24, 2016. At the time, it was the largest cross-border merger ever in the food retail sector. Nearly ten years later, Muller—who will step down as CEO later this year—looks back and ahead in an interview on the Ahold Delhaize website.

Ahold Delhaize is a company with great local brands that have a high degree of autonomy, responsibility, and ownership, and that are close to the communities and the people, he says. “Our brands deeply understand the needs of local customers and communities. I think that’s the secret sauce of our company, and, among retailers of our size, it makes us unique.”

Retail is local

“We sometimes get questions about whether it makes sense to operate our 17 great local brands. People wonder if it’s less efficient compared to having only one banner. But I’m convinced that retail is very local, and our great local brands enable us to be closely connected to our communities and understand local customers, farmers and vendors – a very important element in our strategy. Being close to communities and being that trusted partner for customers has only become increasingly important over the past 10 years.”

The group’s omnichannel strategy is also a key to success, the CEO believes. “While I believe that share of e-commerce will rise, people will still like to see what we have to offer, shop for themselves and get inspiration, new ideas and new recipes. Our convenient network of close to 10,000 stores not only provides that shopping experience but also has an important function in the community and society.”

“No more irrelevant promotions”

He expects the retail network in Europe to focus more on smaller, higher-density stores. The “center store” assortment will shrink, while the selection of fruits, vegetables, and fresh products will continue to expand. “We will also have a higher own-brand participation, and it will be increasingly important to pursue efficiency in the supply chain that makes high-quality groceries more affordable to customers.”

Personalization is also becoming more important: “Our customers expect us to understand them very well. They want to be addressed in a way that is relevant to them when it comes to promotions, inspiration, and recipes. This will only become more important – in the future, consumers will no longer accept irrelevant or middle-of-the road promotions.”