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If we based our Retailer of the Year selection strictly on the financial performance of a given candidate, Ahold USA wouldn’t be an obvious choice. As it happens, however, our publication’s highest annual honor is based on far more than Wall Street metrics and uninterrupted executive teams, and instead on the overall merits of a multistate U.S. food retailer’s entire oeuvre, inclusive of its stance as a tough competitor; vendor feedback attesting to its equitable, productive trading partner relationships; its ability to create and foster a great place to work; and, above all, the measurable — and immeasurable — support provided by its stores and associates to their local communities.
With this the case, we found the collective assessments of Ahold USA and its divisions — Stop & Shop New England, Stop & Shop New York Metro, Giant Landover and Giant/Martin’s, many of whose stores have been enduring fixtures in their respective markets — well deserving of our top prize. Recognized by PG for its Better Neighbor promise carried out daily by an extended family of 120,000 associates throughout its 14-state marketing territory — hefty pockets of which are punctuated by competitive pressures of cosmic proportions — Ahold’s four retail divisions have undoubtedly been put the test in the years leading up to the present. It’s been no easy task for the midmarket retail banners, whose obligations have become all the more formidable when competing for today’s hybrid consumers shopping at both ends of the value/quality spectrum — in hard discounters for staples, and at upscale retailers for experiential products.
The sister retail divisions’ big constant, however, has been stellar associates, many of whom have worked at its four different companies “for many, many years. They followed in the footsteps of other generations,” as Kathy Russello, EVP, human resources, noted during our recent sit-down at the company’s Carlisle, Pa., headquarters. “Our heritage is truly about our associates. We have centuries of experience, and our people are driving us forward.”
Our Ahold USA/Retailer of the Year coverage, which begins on page 24, provides a full retrospective of the multidivisional grocer’s Better Neighbor pledge, part of the parent company’s larger Reshaping Retail blueprint, which we’ve been covering on our website in recent months, and which aims to support enhancements with improved fresh offerings, expanded private label penetration, heightened service levels and targeted price reductions. Funded largely by its concurrent Simplicity cost savings campaign, the program is currently in place at some 320 stores, and will be rolled out to more than half of all stores by year’s end.
Meanwhile, Ahold USA’s e-grocery operation, Peapod, is sprouting double-digit sales growth while consolidating its leading online grocer status with a new warehouse in New Jersey that has doubled capacity. Further fortified by 200 pickup points and a Chicago digital innovation hub, Peapod is reportedly aiming to triple its online food sales by 2016. “The retail world is changing fast, and fulfilling the needs of the connected customer is a crucial part of future growth,” as well as a linchpin of Ahold USA’s Reshaping Retail ambitions, COO James McCann affirmed during our recent interview.
“While we’re a little bit ahead” in the e-grocery derby, McCann foresees “revolutionary industry change in the next four years, particularly as it relates to the devices that we all carry now. Everybody’s online all the time, but as we transition from touchscreens to wearable devices, our shopping environment is going to change exponentially. We truly believe that,” he asserted, “and we’re planning for it, by making investments in infrastructure and logistics, as well as in our stores, to make it possible. But we’ve got to be really clear, and make really good choices over the coming months and years,” he adds, citing a recent revelation that one of the “foremost reasons people like Google Glass is [for] finding products in grocery stores.”
Drawing a comparison with yesteryear’s difficulties navigating roadways without a GPS, McCann observed: “We’re coming up on the same scenario in the grocery world with digital devices. That’s what we’re positioning for, and placing our bets on.”
It sounds like a safe wager to me, and a futuristically neighborly one to boot.