Ahold, the Dutch parent group of Albert Heijn, has announced disappointing results for the second quarter. As a counter-measure, the holding plans to invade Germany through “AH to go”, a convenience concept focussing on immediate food consumption.
Small stores, huge possibilities
Ahold believes convenience stores to be the sector with the fastest possible growth, explains Gino Van Ossel, professor at Vlerick management school. “AH to go is actually more like a food service, not unlike Exki (just less expensive): more aimed at immediate consumption than ‘real’ convenience stores like Carrefour Express or Delhaize Shop&Go”.
An AH to go has three main parts: food “for now” (immediate consumption), food “for later” (still the same day though) and about a 1000 other articles like coffee or tooth paste. Due to the locations where AH to go is already present, like train stations or Schiphol airport, most of the purchases are in the “for now” department.
Easy to expand
The average surface of a Dutch AH to go is 125 m², meaning that it is an easy concept to expand – exactly why Ahold chose this concept to use for its invasion in the German market. Van Ossel: “Locations of that size are relatively easy to acquire in Germany, as opposed to supermarkets. If you want to find good locations for supermarkets, you simply have to buy an existing one. Besides, in a market so controlled by hard discounters, there is simply no place for a chain like Albert Heijn. They have to find another way – like this service concept – to avoid entering a price war in Germany.”
The investments needed for the introduction of AH to go in Germany would be rather small: “there is no need for a huge number of folders or a customer card system in what is essentially a large sandwich shop. Just a small number of small, strategically well chosen shops can be enough.”
Soon also in Belgium?
Much like their Belgian strategy, Ahold first looks for cities close to the Dutch border – like Düsseldorf or Cologne. Despite having only recently been discovered by AH’s “normal” stores, the Belgian market might be the next target for AH to go as well. “The concept is over ten years old and has proven its worth in the Netherlands. It is time to go abroad: there has been an experiment in the US and there still is one in Sweden, with ICA to go – administered by our joint-venture with Hakon Invest. We can not deny being interested in expanding to Belgium as well”, says PR responsible Jochem van Laarsschot.