Zaandam, the Netherlands, November 15th, 2021 – At its 2021 Investor Day, Ahold Delhaize BB #:130192 today announces the next chapter of its Leading Together strategy, which outlines key plans and targets towards 2025.
Powered by its great local brands, this growth and investment plan underpins Ahold Delhaize’s vision to deliver the leading local food shopping experience for customers, placing value and convenience at the heart of its strategy.
In addition, the company announced its intention to significantly step-up investments in digital and automation, to explore a subsidiary-IPO for bol.com, and increase focus and attention on accelerating its health and sustainability agenda.
Frans Muller, President & CEO of Ahold Delhaize, said: “Our Leading Together strategy has proven to be strong in recent years, and is a great foundation as we head into the future. The COVID-19 pandemic put our people and our strategic choices to the test, and through it all we were able to always deliver for our customers, our communities and our associates in all the brands and support companies. I cannot stress enough how proud I am of our achievements. The pandemic has accelerated the pace of change in the retail industry. It has also changed consumer behavior permanently with people shopping more online, eating more at home and having a bigger interest in local and healthier food.”
Building on the Leading Together strategy, the company has identified four priorities to double down on between now and 2025:
- Serve customers through deeper digital relationships across our omnichannel Customer Value Proposition (CVP)
- Accelerate development of/investments in omnichannel capabilities and continue to be the best local operators
- Lead the transformation into a healthy and sustainable food retail system
- Leverage the portfolio to create the ultimate ecosystem for smarter local customer journeys
- Investing in Digital proposition
Ahold Delhaize and its great local brands exist to help people eat well, save time and live better. Customers are looking for high value, convenient and personalized solutions – and shop whenever and wherever they want. Ahold Delhaize will invest in its brands to provide shoppers relevant products and services, promotions, tailored customer experiences and premium subscription memberships. To enable customers to shop in this way, Ahold Delhaize will accelerate its investments in building scalable and repeatable operational capabilities, with a sharper focus on digital, online, data and automation.
In doing so, Ahold Delhaize expects to accelerate net sales growth with €10 billion in incremental sales from 2023-2025. Net consumer online sales are planned to double between 2021 and 2025. In addition, Ahold Delhaize plans to have eCommerce profitable on a fully allocated basis by 2025.
Natalie Knight, CFO Ahold Delhaize: “To support these plans, the company will increase investment levels from 3% to 3.5% per annum to fuel growth. We will continue to be the best operator in the industry, underlined by our world-class operating margins. As part of our planning toward 2025, we are committing to even more ambitious Save for Our Customers targets: ~ €4 billion by 2025. We will also use our knowledge and experience to make eCommerce profitable by 2025, and I am pleased to announce a planned €1 billion share buyback* for 2022.”
Establishing one of the largest supply chain networks on the U.S. East Coast
In 2019, Ahold Delhaize USA BB #:138251 launched its supply chain transformation, focused on bringing back its supply chain as it builds out its omnichannel network and adding new facilities in key geographies.
Kevin Holt, CEO, Ahold Delhaize USA said: “With these changes, Ahold Delhaize USA will have full control of its supply chain and an optimized network at scale, which enables the local brands to better serve their customers, allows ADUSA to continue to invest in automation and digital capabilities to lower costs to serve, and ultimately enables direct to customer relationships as part of its omnichannel network. The transformation will create one of the largest supply chain networks on the East Coast. It is scheduled to be finished in April 2024, with 26 facilities in the integrated self-distribution network.”
First-of-a-kind customer ecosystem
The strong local presence of the Ahold Delhaize brands is a key factor in their success. This is illustrated by the New York metro area where Stop & Shop and Fresh Direct and their partners form an ecosystem to deliver fresh and healthy food wherever, however and whenever New Yorkers wish to shop.
In the Benelux, Ahold Delhaize has a unique position with its renowned supermarket brands Albert Heijn and Delhaize, online marketplace bol.com as well as Gall & Gall and Etos. Ahold Delhaize announces its first-of-a-kind customer ecosystem in which the Benelux brands will work closely together to connect shopping experiences across food and non-food, offering customers more convenience, value and relevance.
“Time is a precious commodity for our customers. Retailers who can simplify the customer journey will be most relevant in the long term, and powered by bol.com we believe we can be one of them. With the combined strengths of all the brands in the Benelux, we have a one-of-a-kind opportunity to create a truly comprehensive customer ecosystem”, said Wouter Kolk, CEO Ahold Delhaize Europe & Indonesia.
Explore subsidiary IPO of bol.com
After an extensive and thorough review considering the strategic opportunities for bol.com, during the past year, Ahold Delhaize has decided to build on the remarkable success, customer loyalty and leadership position of bol.com as a retail tech platform and explore a subsidiary Initial Public Offering (sub-IPO) for bol.com.
The rationale for this decision is to fully activate the opportunities for bol.com, to fuel its tremendous growth potential and to provide further funding for Ahold Delhaize to execute on its winning strategy. Bol.com will continue to play an important role in the strategic partnership with other brands of Ahold Delhaize in the Benelux.
It is envisaged that the sub-IPO will entail a listing of a limited interest on Euronext Amsterdam, and that Ahold Delhaize will retain significant control over bol.com in the long term to ensure its growth and development.
The sub-IPO is expected to happen in the second half of 2022, subject to multiple internal and external factors, including market conditions. Further details will be provided in due course.
Increasing focus on health and sustainability
Ahold Delhaize will further invest in, sharpen and strengthen its initiatives towards a healthy and sustainable food retail system. Amongst other sharpened ambitions, the company is bringing forward its scope 1 and 2 targets by committing to reach net-zero carbon emissions across its own operations no later than 2040 and to becoming a net-zero business across its entire supply chain, products and services by 2050 (scope 3).
Further, Ahold Delhaize has joined the Business Ambition for 1.5°C, a global coalition of UN agencies, business and industry leaders, in partnership with the Science Based Targets initiative (SBTi) and the UN led campaign ‘Race to Zero’. These and other ESG metrics will make up a bigger part of executive incentive programs going forward and will be supported by increased transparency going forward.
Frans Muller commented: “We realize that these are ambitious targets which require a lot of work over the coming years, and we feel encouraged by our double AA rating upgrade by MSCI and recently confirmed DJSI leadership position. But most importantly we are confident that these and the other targets included in today’s strategy update are achievable because of our highly engaged and committed associates.”
