Ahold Delhaize seeks growth in online and acquisitions

Ahold Delhaize is hoping to profit from e-commerce in the near future, but today gaining a larger share of the market is more important, says CEO Frans Muller. In the United States, the Belgo-Dutch group also intends to grow through acquisitions.

Catching up

E-commerce plays a key role in Ahold Delhaize’s growth ambitions, the retailer told journalists and financial analysts in New York: online turnover should be doubled by 2021. In order to achieve that goal, Ahold Delhaize is committing to robotisation, data analysis and automated warehouses that allow for fast delivery from stores. In the United States, 600 pickup points will be added next year. Those investments are necessary to compete with Amazon, Walmart and Kroger. 

In Europe the group is also shifting into a higher gear: bol.com‘s distribution centre is expanding, Albert Heijn is testing a smart door lock to deliver groceries when customers are away from home and in Belgium Delhaize and bol.com are planning to work together more closely.

The group has some catching up to do online, even though e-commerce is not (yet) profitable on its own. In an interview with Belgian newspaper De Tijd, Muller clarifies that we should not look at online activities separately: web shops support the supermarkets, and without investments in e-commerce customers simply go to the competition. In addition, online can turn a profit in densely populated, large cities: Muller explained to CNBC that the future of e-commerce is in a blend of various logistical models: same day delivery, next day delivery and click & collect.

Consolidation in the US

Ahold Delhaize does not just want to grow online, but also in terms of physical stores. Its largest American chain, Stop & Shop, will be thoroughly repositioned and all stores will be renovated. In the US, the group also intends to play a driving part in a further consolidation of the food retail industry. A lot of small and large food retailers are currently struggling, and Ahold Delhaize has got its fair share of capital to include acquisitions or mergers in the battle plan.

Muller does not care much for reducing the number of his chains in the US (currently five): food retail is local, according to the CEO: “It is a misconception that we would be able to save a fortune that way. Our local brands are close to their communities. They understand the local needs. They have a strong history and they appeal to our customers.”