Ahold Delhaize says it launched a "Growing Together" strategy at its 2024 Strategy Day, outlining key plans and ambitions towards 2028.
This growth and investment plan underpins Ahold Delhaize's vision to be the trusted local food retailer, placing vibrant customer experiences and trusted products at the heart of its brands' customer value propositions, according to a news release.
“We have taken a multi-stakeholder approach to developing this new strategy, ensuring we balance the needs of our customers, the people we work with, and broader societal dimensions. 'Growing Together' ensures we will stay at the forefront of innovation in healthy foods, omnichannel experiences and supply chain transformation, serving customer needs through a well invested and future focused foundation," Ahold Delhaize President and CEO Frans Muller said in the release.
"I am encouraged by the numerous avenues we have across our great local brands to realize our growth potential. By focusing on the things we do exceptionally well, we are together committed to fulfill these ambitions. By taking bigger steps, investing in our people and leveraging technologies, we are excited to unlock our purpose,” Muller said.
The company said the levers of its growth model will be powered by six strategic priorities at a brand and functional level.
Image courtesy of Ahold Delhaize
According to the release, an omnichannel shopper spends 1 1/2 to 3 times more with the company in its most mature markets. Ahold Delhaize said by transforming its loyalty programs to lead with digital-first content, it aims to drive up omnichannel loyalty sales penetration to over 80% by 2028. Along the way, the company said it intends to funnel loyalty customers from physical cards to its digital apps, which should yield a rapid increase in monthly active users where we target 30 million by 2028.
Invest in the customer value proposition
The company said loyalty and membership programs are at the heart of its offering and provide it with relevant insights so it can help customers make the right choices and access more affordable options. These include increasing own-brand share toward 45% of total store sales, moving healthy sales from solely own-brand assortment to full-store sales and taking effective actions on assortments and promotions to enhance price perception, according to the release.
Densify and grow markets
Portfolio excellence is a big part of this refreshed plan, which will have both organic and inorganic components, the company said. Optimizing its portfolio and making necessary interventions when brands are facing challenges will also be an important contributor to elevating the quality of its sales.
Returning to more pronounced organic store growth in the U.S. is a key highlight of this plan, particularly with the acceleration of its brands, Food Lion and Hannaford, according to the release. Ahold Delhaize said it will take decisive and deliberate actions to ensure a stable and thriving future for Stop & Shop. In Europe, further leveraging its Benelux stronghold through Albert Heijn, Delhaize and Bol and capturing new growth opportunities in the central and southeastern regions, especially with complementary footprint opportunities such as Profi in Romania, and organically with new store openings, the company said.
Innovate for growth and efficiency
By leveraging its data to drive retail media, data and insights, partnering with other industry leaders to develop strategic capabilities and scaling new business models in the business-to-business and business-to-consumer areas, Ahold Delhaize said its ambition is to grow complementary income streams to around 3 billion euros by 2028. The company has identified additional medium- and long-term opportunities and is refining and increasing the scope of its ambition in complementary income streams, as it sees more areas to lift, shift and scale ideas commercially around its markets, the release said.
Leverage and lower cost base
The company said a key driver of its margins is its Save for our Customers program. Between 2025 and 2028, the company said it's raising the bar to 5 billion euros in cumulative savings by stepping up its efforts in areas like joint sourcing, infusing artificial intelligence and automation in logistics, distribution, store operations and back office and by simplifying and refining its operating model to enable it to operate more efficiently and sustainably.
"I am excited by our growth plan, as it plays to the strengths of our company. Our ambition is to create sustainable value and deliver predictable returns to our shareholders," Ahold Delhaize Chief Financial Officer Jolanda Poots-Bijl said in the release. “We are a 4% margin company, and to ensure this we continue to be laser focused on operational efficiency, enabling us to drive growth by investing in our brands' customer value propositions, digital solutions and sustainability ambitions. We are confident that we are doing the right things to get our new strategic plan off to the right start, through which we expect to return to diluted underlying earnings growth for 2025.”
During the 2024 Strategy Day, JJ Fleeman, CEO of Ahold Delhaize USA, and Wouter Kolk, CEO of Ahold Delhaize Europe & Indonesia, detailed how the "Growing Together" strategy translates into activation across their markets and is brought to life by local brands. C
hief Human Resources Officer Natalia Wallenberg and Chief Technology Officer Ben Wishart detailed how the company is focusing its resources on creating the future of grocery retail. In particular, the company highlighted how its future-proofing its foundation by leveraging the talent, experience and deep industry knowledge of its people by applying and deploying the latest advances in technology and AI throughout the group's ecosystems.
“As the largest grocery retailer on the East Coast, Ahold Delhaize USA and its local brands have a rich heritage in the markets they serve, with loyal customer bases, trusted products, and a reputation for being an integral part of their local communities," Fleeman said. "Over the next several years, we will strengthen the market position for each of our brands, including the revitalization of Stop & Shop.
"We will improve value for customers through price investments and enhance the customer experience through 1,000 targeted remodels and new stores," Fleeman added. "We will lead, grow and differentiate in own brands, build digital relationships through more personalized value, and improve operational efficiency at every level. With these moves, underpinned by strong talent and innovation, our brands are well positioned to lead in the grocery industry for years to come."