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LONDON - Netherlands-based Royal Ahold is expected to overtake French retailer Carrefour as the world's No. 2 grocery retailer during 2002, a new report from the Institute of Grocery Distribution (IGD) suggests.
In 2001, Ahold achieved sales of euro 66.6 billion ($64.3 billion), up 29 percent on 2000, and has virtually doubled its sales over the past two years, according to the report. In turnover terms, Ahold is currently the world's third largest grocery retailer after Wal-Mart and Carrefour. Having moved up the global turnover league from number five in 1999 to number three in 2000, Ahold benefits from a number of strengths which will enable it to overtake Carrefour in 2002, including:
-- Local knowledge: Ahold tends to maintain the local retail brand of its acquired companies, so that stores remain familiar to the consumer. It benchmarks performance internally and against newly acquired companies, giving it the best local knowledge and customer-oriented operations.
-- Acquisition record: Ahold is more successful at making and integrating acquisitions than any of its retail peers, giving it a key competitive advantage and making it well placed to succeed in a consolidating retail environment.
-- Multi-format and multi-channel approach: Although its principal format is the supermarket, Ahold has shown an ability to adapt to specific market requirements and has developed a hypermarket concept in Central Europe and a discount format in Latin America and Scandinavia. Ahold's operations in both retail and foodservice channels enable it to maximize synergies and benefit from new growth streams, including e-commerce opportunities.
-- Regional strength in the US: Ahold is ranked number five in the US, with six retail chains operating on the eastern seaboard. This strong position is a key advantage over Carrefour, Metro and Tesco, which lack retail operations in the US, although Tesco has a joint e-commerce venture with Safeway Inc.
-- Global and regional sourcing and global promotion management: Ahold has a unique position in being the only global retailer with access to an internet trading platform (WWRE), a buying/marketing alliance (AMS) and its own in-house global and regional sourcing structure, which can be combined to create the best procurement solution.
-- Strong management: Cees van der Hoeven has been chief executive since 1993 and has led Ahold through a period of rapid international expansion. Regional support teams and the Ahold Networking Intranet facilitate the global exchange of ideas and best practice, while the retention of local managers in acquired companies ensures that operations are oriented towards local consumer requirements.
However, as the report points out, Ahold still remains relatively marginalized in Europe and is ranked ninth in the European turnover league. It lags behind Carrefour in Europe, generating only euro 21.8 billion sales in the European region, compared to Carrefour, which generates euro 56.5 billion in Europe. Ahold also tends to be located in the smaller, more peripheral European markets.