Ahold realigns U.S. ops in search of local focus

AMSTERDAM –A major realignment of Ahold’s supermarket empire in the United States could help revitalize the company’s ongoing campaign to add market share in the pharmacy and health arenas in New England and the Eastern Seaboard.

The Netherlands-based retail giant announced last month it was reorganizing its U.S. and European food- and combo-store operations to align itself more closely with local markets and local consumers. The move, said company leaders, will shift decision-making responsibilities down to each region to make each of Ahold’s U.S. supermarket divisions more responsive to local needs and growth opportunities.

To that end, Ahold is shifting its U.S. operations from two divisions currently—the Stop & Shop/ Giant-Landover division and the Giant-Carlisle division—to four. Those four newly reorganized divisions will be Stop & Shop New England, Stop & Shop Metro New York, Giant-Landover and Giant-Carlisle, the company revealed in November.

The change could yield a sharper focus for each of those chains, which together operate a total of 716 supermarkets, some 530 of which include in-store pharmacies and drug store departments. The restructuring also could build new competitive muscle from a diverse, multibranded retail operation that suffered from a lack of focus and resources through the middle of the last decade.

“The changes will ensure a sharper focus on local customer needs, [and] provide efficient and effective support functions in each continent,” the company noted in a statement. The realignment also will provide “a more robust approach to business development,” Ahold asserted, and “will further simplify and standardize processes and structure to ensure the company can integrate acquisitions more easily as it pursues its strategy for profitable growth.”

Commenting on the global reorganization, Ahold CEO John Rishton said, “We are further simplifying and streamlining our businesses, and will be able to provide even greater focus on our customers.”

In line with the changes, Ahold USA COO Larry Benjamin will continue to head up all U.S. operations, the company said. Benjamin, in turn, has named Carl Schlicker, who formerly oversaw the Stop & Shop/Giant Landover division, as CEO of the four U.S. operations. Giant-Carlisle’s current top manager, Sander van der Laan, will return to Europe to become general manager of Royal Ahold’s Albert Heijn division.

Ahold’s efforts to accelerate sales and earnings at its U.S. operations are critical to the company’s success. In third quarter 2009, the most recent fiscal period, the company’s 716 U.S. supermarkets generated nearly 59% of total company revenues and more than 61% of total operating income.

The reorganization plan comes in the wake of the Ahold USA’s Value Improvement Program at Stop & Shop and Giant-Landover. That overhaul, completed in fiscal 2008, “has gained momentum,” Rishton asserted in the company’s most recent annual report, and has helped “reinvigorate” those chains in New England, New York, New Jersey and the Mid-Atlantic states with “the introduction of new branding, a new store look and new logos,” he noted.