Stop & Shop Divisions to Consolidate

Part of Ahold Delhaize’s strategy to strengthen brands

February 6, 2017, 01:00 pm By Bridget Goldschmidt, Stagnito Business Information

In the wake of their parent companies’ merger, Ahold USA and Delhaize America have unveiled plans to further strengthen their brands to ensure they remain customer-focused, community-centered and positioned to win in their markets. The latest development in this strategy is the consolidation of the Stop & Shop New York Metro and Stop & Shop New England divisions into one brand organization.

“Having a single brand organizational structure dedicated to Stop & Shop will strengthen the brand and will ensure it can better leverage its brand to serve the unique needs of customers in the different markets that Stop & Shop serves,” Ahold Delhaize noted.

Delhaize America and Ahold USA brands will maintain their respective office locations as follows: Stop & Shop, Quincy, Mass.; Food Lion, Salisbury, N.C.; Giant/Martin’s, Carlisle, Pa.; Hannaford, Scarborough, Maine; Giant Food, Landover, Md.; and Peapod, Skokie, Ill.

Kevin Holt, COO of Quincy, Mass.-based Ahold USA, told Progressive Grocer that Stop & Shop will retain its “district-centric teams” at various sites, including the Purchase, N.Y., facility serving as the New York Metro center of operations, with no current plans to close offices or cut non-store staff, although he noted that “as the teams come together, they would [ultimately] make the best decisions [as to] locations.” The move, he explained, would provide the opportunity “to be razor-focused’ on the Stop & Shop brand, enabling the teams to better determine the best design for each individual store, as the banner’s locations often have radically different demographics despite being geographically close.

Further, the following Ahold USA and Delhaize America brand executives will continue in their roles: Mark McGowan, president, Stop & Shop; Tom Lenkevich, president, Giant/Martin’s; Gordon Reid, president, Giant Food; Jennifer Carr-Smith, president, Peapod; Meg Ham, president, Food Lion; and Mike Vail, president, Hannaford.

Creation of Retail Business Services

Also as part of the brand-strengthening strategy, Ahold USA and Delhaize America in December revealed the creation of Retail Business Services LLC (RBS), a separate entity headed by President Roger Wheeler. The company will leverage its scale to drive synergies and best practices, as well as offer expertise, insights and analytics to the divisions’ brands to support their respective strategies. Along with commercial support, Retail Business Services will offer financial services, not-for-resale procurement, legal services, information technology, and people systems and services, among others.

With RBS, the Stop & Shop, Giant Foods, Giant/Martin’s, Peapod, Food Lion and Hannaford banners can fully focus on building on their leading positions in their respective markets and delivering more for their customers. Each banner will have seperate commercial strategies tailored to local markets with such dedicated resources as category merchandising, assortment, pricing, promotions, marketing and format teams. The brand-centric structure is expected to be complete by early next year.

“Positioning the Ahold USA brands to be even closer to their customers will not only help them deepen their connection in their local communities and win in their markets, it will ensure that associates have exciting and rewarding opportunities to make meaningful contributions to each brand’s success,” noted Holt.

“The brand-centric structure will enable our Food Lion and Hannaford associates to build even stronger relationships with existing customers and communities in the markets they serve, and win new customers to grow their businesses,” said Frans Muller, acting COO of Salisbury, N.C.-based Delhaize America.

Muller and Holt told PG that RBS will permit Ahold USA and Delhaize America banners to leverage economies of scale in twice-yearly negotiations for such centrally procured items as the items listed above, while allowing the “great local brands” to take advantage of category management and merchandising opportunities within their respective market areas. This will free the various banners to “really focus on the markets they serve,” Muller said, while Holt added that the divisions could also concentrate on “developing culture and team members.”