Royal Ahold (NYSE:AHO), the international food retail and foodservice company, today announced it is strengthening its European buying process by establishing a formal business unit named Ahold European Sourcing (AES).
This unit will generate cost savings of tens of millions of Euros every year. It incorporates procurement specialists from all of Ahold’s European companies and will coordinate centralized buying strategy on the continent, where Ahold operates or services more than 6,600 stores in 11 countries with annualized sales of approximately Euro 22 billion.
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In a meeting of prominent European suppliers, Ahold explained that it intends to use centralized sourcing to improve buying conditions and lower costs through AES by leveraging the company’s European scale. Increased cooperation with suppliers will lead to new business opportunities, joint use of logistics systems and the exchange of best practices. Other advantages for suppliers are improved efficiency and access to new and larger markets with greater volume.
AES will operate as Ahold’s Central European buying desk, divided into four regional desks: The Netherlands, Northern Europe, Central Europe and Southern Europe. The organization is dedicated to centrally buying products from international A, B and C-brands as well as private label brands.
The sourcing of perishables will also take place centrally where appropriate. Non-resaleables such as refrigerators, shelf systems and office furniture will also be sourced centrally.
AES is the logical development of a long-standing Ahold initiative to achieve marketing and buying synergies in Europe. Ahold’s flagship Dutch supermarket chain Albert Heijn has been buying Euro Shopper products, now in excess of 300 items, for years through Associated Marketing Services (AMS, established in 1989). In addition, several Ahold companies in Europe source their coffee jointly.
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By GlobalDataRoyal Ahold
Royal Ahold operates approximately 8,500 supermarkets, hypermarkets and other store formats in the United States, Europe, Latin America and Asia with consolidated 2000 sales of close to USD 50 billion (Euro 52.5 billion). The company also has a significant presence in the foodservice sector and is swiftly developing its position in internet-based home delivery. Ahold employs almost 420,000 associates and serves the food needs of over 35 million customers and more than 200,000 foodservice accounts in 25 countries every week. Ahold’s website can be found at www.ahold.com.
This Royal Ahold press release contains ‘forward-looking’ statements. Actual results may differ from such statements as they may have been influenced by factors beyond the Company’s ability to control, as further discussed in Royal Ahold’s Form 20-F.
