Ahold is in talks to buy the US’ Alliant Foodservice for $2.2 billion.

If Ahold is able to take Alliant Foodservice over, it will become the second largest retail operation in the world, overtaking Carrefour. Its recent strong interim results show that the firm’s multi-channel strategy seems to be working well, tapping into both supply chain synergies and consumer trends. However, its real strength lies in the long term.







Company Profile:

Ahold



Ahold’s multi-channel strategy, which covers online and offline retail, as well as foodservice has had its critics, but recent interim results that beat expectations highlight that Ahold is delivering on its aims at present.


The potential Alliant purchase, believed to be for $2.2 billion in cash and debt, would not only boost Ahold’s overall revenues, but would also strengthen its foodservice operations in the US, following the purchases of PYA/Monarch and US Foodservice.


The firm is expecting to gain $160 million in synergy benefits from these deals by the end of 2002, $100 million of which is expected by the end of fiscal 2001. These forecasts show that Ahold is confident that it can deliver synergies that many thought were unachievable when it originally purchased the two US foodservice operations. Given this success, it seems likely that Ahold will be able to deliver even more synergy benefits if the Alliant deal goes ahead.


These results may look good now, but Ahold is playing a long-term game, seeking to be best placed to cover consumer trends in the future, such as increased eating out. It is also diversifying its business into areas where cost savings can be made. This means Ahold is making significant progress towards being best placed to meet all consumers’ food needs in the future, with an efficient operation.


Ahold has been one of the most innovative retailers, testing new ideas and sharing best practice knowledge across the company. By testing new ideas, and by having a clear picture of what consumers will want both now and in the future, Ahold is well placed for future growth. Its competitors might be well served by developing a similarly clear strategy based on what consumers will be wanting in the future.


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