Ahold is expected to overtake Carrefour as the world’s No 2 grocery retailer during 2002 and is forecast to extend a €10bn (US$9.8bn) lead over Carrefour by 2004, according to new research from IGD.
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In 2001, Ahold achieved sales of €66.6bn, up 29% on 2000 and has virtually doubled its sales over the past two years from €32.8bn in 1999.
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.
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By GlobalDataMulti-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 maximise 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. Ahold has demonstrated its ability to manage global high-impact promotions over the past three years.
Strong management
Cees van der Hoeven has been CEO 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, Ahold still remains relatively marginalised in Europe and is ranked ninth in the European turnover league and lags behind Carrefour in Europe, generating only €21.8bn sales in the European region, compared to Carrefour, which generates €56.5bn in Europe.
Ahold also tends to be located in the smaller, more peripheral European markets.
The five largest markets in Europe account for nearly 70% of the European grocery market and while Carrefour is active in three of these largest markets, Ahold is present in just one, Spain.
Top 5 European Grocery Markets (2001)
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% of Total European
Country Grocery Market (€bn) Grocery Market
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Germany 204 19%
France 176 16%
United Kingdom 162 15%
Italy 134 12%
Spain 66 6%
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Total Europe
(exc. Russia) 1,099 100%
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Source: IGD
IGD CEO Joanne Denney OBE said: “Ahold is strengthening its position globally but it is likely to be some time before it will fill its European gap, after its strong acquisition programme of the past few years seemingly overshadowed its organic growth achievements. In the medium term, however, the attraction to at least some of these large markets, particularly to France and Italy is likely to prove irresistible.”
