-By Deborah A. Garbato

In July 2008, Giant-Carlisle president and CEO Sander van der Laan left The Netherlands for central Pennsylvania. The executive, a 10-year Royal Ahold veteran, arrived with his wife, Ingeborg; three young sons; and, in his words, "a few pets."

But van der Laan brought more than his family to the United States. He brought almost two decades of operations expertise on both the fresh food and CPG sides of retailing. In The Netherlands, he worked with Unilever's shampoo and Lipton Tea brands. At Dutch retail giant Albert Heijn, his team moved market share from 24 percent to 33 percent via an aggressive pricing strategy and development of private brands and multiple formats. Both Albert Heijn and Carlisle, Pa.-based Giant are part of the 25.7 billion-euro Royal Ahold.

Today, van der Laan and his family are melding Dutch and U.S. lifestyles — the kids are in public school and the executive enjoys local hockey games. At the same time, van der Laan is applying Albert Heijn initiatives to the U.S. market. "Format diversity, along with augmenting our corporate-brand portfolio, is a key growth driver," says van der Laan, who succeeded Carl Schlicker in September 2008 (Schlicker was named CEO of Ahold USA's Stop & Shop and Giant-Landover stores).

Van der Laan acknowledges that the U.S. grocery market is different from the Dutch food segment. "Yes and no," he says when asked if he plans to replicate his accomplishments at Albert Heijn. "From a business perspective, the U.S. retail food market is still unconsolidated and regional. In The Netherlands, Albert Heijn has a 33 percent share. Even with Wal-Mart, no U.S. player is that dominant. And the European mix of private label is always much higher."

In both countries, van der Laan views development of associates as pivotal. "I believe in strengthening people. I don't mind people having different opinions. I try to stimulate debate and challenge conventions — although you need to be aware of why the convention was created."

Van der Laan was named EVP, marketing & merchandising, of Albert Heijn in 2003. His team helped grow the Albert Heijn To Go convenience store chain to 45 stores and developed a 30,000-to-40,000-square-foot (large by European standards) compact hypermarket. Today, Albert Heijn operates 30 hypermarkets (820-plus stores in total). Annual sales are about 9 billion euros.

"We had been losing market share. We had negative sales and EBITDA was under pressure. We repositioned Albert Heijn from a supermarket to a multi-format organization. While all formats carry the name Albert Heijn, we distinguish among them."

Van der Laan moved Albert Heijn's pricing from the high to the middle end of the spectrum. "We tried to create a price, value and quality perspective, which is similar to what Giant-Carlisle offers." At Giant, his team lowered prices on 5,000 SKUs this past June.

He concedes that lowering prices "puts pressure on margins" in certain categories. Losses can be offset by beefing up private brands. Private brands can generate higher margins for Giant and lower prices for consumers.

"There is a lot of pressure on our channel," he adds. "Last year, we had hyper-inflation in food retailing; this year, we are looking at a deflationary environment. But people have to eat, and the pressure is different than in the real estate or auto industry. From that perspective, it is a good industry to be in. People are trying to save money and are spending in traditional retail channels."

Private brands comprise more than 50 percent of Albert Heijn's offerings — the norm for a European retailer. Van der Laan acknowledges that Giant can't go that high. Still, he believes, there are untapped opportunities.

"In business school, I was taught that Americans don't like 'corporate' brands. But I think this is largely due to the lack of priority given to developing these brands." Van der Laan, who has worked on both the national (Unilever) and private label (Albert Heijn) sides, says he has no plans to displace national brands at Giant. "It is up to consumers to choose."

Giant, Deliberate Steps

Van der Laan does not want to completely reinvent how Giant does business. Much of his expertise is being applied to plans whose development preceded his appointment. Initiatives include Giant To Go, which opened in Manheim Township, Pa., in April 2009. The 4,200-square-foot test concept is the company's first convenience store. A second is slated for 2010.

Before the end of the year, the company will also open its third Super Giant near Harrisburg, Pa. At 98,000 square feet, this larger-footprint format includes expanded and specialized departments as well as babysitting and an in-store nutritionist. Giant is also developing a smaller-footprint supermarket. Van der Laan didn't divulge the timetable or other details. Giant's traditional supermarkets average 65,000 square feet.

Another 2010 plan calls for a store in the city of Philadelphia. This will mark a radical shift for Giant, whose 150 Giant and Martin's stores are mainly in culturally homogenous areas of Pennsylvania, Maryland, Virginia and West Virginia.

"We have some urban stores, but they are in our traditional areas like York, Allentown and Harrisburg," says van der Laan. "Philadelphia is a big opportunity." Giant, he adds, has 45 locations in Philadelphia's suburbs. It has operated in the area for 25 years and is a market leader in many communities.

Historically, Giant has moved slowly when it comes to expansion and new concepts. Super Giant, for example, was launched in 2005 and involves only two stores. But the fact that Giant is opening new stores at all is a dichotomy in today's sluggish economy. In late August, Giant opened its 150th location, in Culpeper, Va.

"Many grocery competitors are not building stores and have announced major cutbacks," admits van der Laan. "That does not apply to Giant-Carlisle or Stop & Shop. We continue to invest, which should create opportunities in the years ahead." Most traditional food retailers, he adds, are also emphasizing smaller stores. "While we will expand Giant Superstore, it will be at a slower pace." Giant will also continue to build traditional-sized supermarkets.

As a parent company, Netherlands-based Royal Ahold is in a good position to invest in its U.S. operations. Worldwide, second-quarter sales were 6.4 billion euros, an increase of 11.5 percent. Operating income was 295 million euros, up 25.5 percent.

In the United States, Giant-Carlisle's second-quarter net sales decreased 0.4 percent to $1.1 billion. Operating income was $48 million (or 4.3 percent of net sales), down $3 million compared with the same period last year. Giant-Carlisle’s annual sales are about $4.7 billion.

"Sales did slow this year [at Giant]. But I think we're doing a proper job and are continuing to invest in our store network." Van der Laan adds that Giant commands a 30 percent to 40 percent market share in many of its core central Pennsylvania markets.

While Wegmans is a "tough competitor" in some areas, van der Laan says the chains occupy different niches. Wegmans targets upscale shoppers and foodies; Giant's focus is broader in both product mix and target customers. Wegmans has a well-recognized private label business.

Giant-Carlisle — along with Giant-Landover and Stop & Shop — also continues to invest in technology. In 2007, Ahold USA signed an agreement with Oracle for a broad suite of retail applications. Products will provide visibility across an entire set of business operations. Areas of focus include planning, merchandising and in-store initiatives. Oracle Retail replaces a less flexible legacy system. Van der Laan notes that Oracle Retail, along with other technologies, should facilitate operation of multiple formats.

Oracle — along with improved pricing strategies, new store formats and private brands — is just part of van der Laan's long-term vision. A methodical planner, he works in measured steps to achieve specific goals. Communication, development of associates and teamwork are essential. "I want to make sure that the company and its key leaders know where we want to be as we continue to invest in the supply chain and optimize and renew current store prototypes. We are only at the beginning."