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In the wake of the pending merger between international supermarket giants Ahold and Delhaize Group, Progressive Grocer spoke with Dick Boer and Frans Muller, respective CEOs of each company, to discuss the prevailing and future opportunities they foresee as they embark on what promises to be a complex, albiet fortifying, integration.
When asked about the first order of business that will be tackled on their massive to-do list once the deal closes in mid-2016, Boer said a key element of a smooth integration will be ample "pre-work and preparation about what, how, and where to start the process," which will focus "first and foremost on [collective] synergies and private label programs." The second element, he continued, will concentrate carefully on "creating a culture and strategy that everyone feels a part of," which he said will be a key part of a strategic planning "through 2020, and even 2025" as it "evolves on both sides of the ocean."
The third element the dual company leaders will work to support closely in the early stages is "keeping our brands and banners much more focused on delivering value to our customers" while retaining the "strong heritage" of both companies. "Our [retail] brands are assets which we would like to preserve."
For his part, Muller said: "I think we can do quite a bit of work and planning between signing and closing, as allowed by law, to announce key positions" while aiming to create "a very clear plan to work with our vendors [to enhance collective] merchandising synergies at the first stage of the supply chain. Furthermore," Muller continued, "I think one of the most important things between now and closing is our [mutual goal] of running the process" with a keen eye to create a better shopping experience, both in stores and online.
Having just wrapped up its internal road shows with associates from both organizations to share their "vision and how we are thinking" about the combined company, Boer believes the events "were well appreciated," as a result of providing "an understanding and [heightened] confidence level" about the many "good things" yet to come.
Doing Their Homework
While both companies were close to combining a few times previously, Muller said the timing of the agreement was right, in light of the rate of consolidation in the U.S. retail sector, "but more importantly" [because it involves] two strong companies talking to each other." Guided by the "support of both companies' boards," Muller said, "We have two companies which are well positioned with healthy financials and strong associates, and we did the [necessary] homework on the strategy" prior to commencing. "Time-wise," he added, "it's a perfect proactive move."
When asked about potentially creating a new moniker for the soon-to-be new Ahold Delhaize, Muller said, "We respect the heritage of both companies, and we have no plans to change to a new name."
Looking ahead, Boer said the merger between the two international retailers, the integration process for which is expected to take two, but more than likely, three years, will, "Give us even more power at the end of the day to combine assets and capabilities as we continue to learn from each other" to reach new levels of service and success.