Despite continuing economic challenges and the hurdles of dealing with a massive corporate restructuring, Jeff Martin remains bullish about the future of the $24 billion organization where he supervises all merchandising, marketing and procurement.
Martin, who 11 months ago was named EVP of Ahold’s U.S. business, which includes four divisions – Giant/Carlisle, Giant/Landover, Stop & Shop/Metro New York and Stop & Shop/New England – told approximately 150 reps and brokers at the AMR/MAFTO meeting at the Sheraton in Harrisburg, PA, that despite some slight improvement in consumer indicators, “we have not noticed much change in spending.”
‘We lost eight million jobs between 2008 and 2009 and that resulted in spending cutbacks and a reduction of trips to our stores,” he said. “There hasn’t been much of rebound; many people who have hit the floor are not moving from the position. There still is a very conservative attitude toward discretionary spending. Our challenge is how to effectively appeal to people who are really dealing with less.”
Still, Martin was optimistic about how AUSA has positioned itself with the consumer in this economy. Internally, however, the company was not maximizing the efficiencies of size and scale it had at its disposal. That was the catalyst for the corporate reorganization which was first announced last November 5.
The process actually began in January 2010 and nine months later Martin said about 70 percent of the goal has been reached.
“There are still big initiatives head of us, but by the end of October, we should have all the merchandising teams seated and in place in Carlisle,” he asserted. “The majority of people who have agreed to relocate from Quincy have moved and there will be a ‘single stop/one category manager to call on’ system in place shortly.”
He added that the last big hurdle towards completion is deployment of the chain’s systems and IT platform.
“It’s taken longer than we thought,” admitted Martin. “We found a lot of ghosts in our systems, but our people have worked extremely hard to get it right and we should be online with our systems in late 2010 or early next year.”
Once the components of the reorganization are fully completed, Martin is very optimistic about AUSA’s 2011 initiatives and believes his company is well positioned to grow over the next few years. Fueling that big picture attitude is the profitability of the entire Ahold organization and the fact that the Amsterdam based retailer has 3 billion euros to invest towards future acquisitions.
He noted that despite the economic challenges and internal changes, all banners remained very profitable and all achieved identical sales gains of at least two percent, which placed the chain at the top end of its peer group. Martin also expressed excitement about AUSA’s progress with its consumer intimacy platform, adding that “getting better connected” with the consumer is a major objective of the company during the next 12 months.
“This is a big initiative with us,” Martin stated. “We believe we have the systems and technology to better understand our customers. It’s no longer about mass marketing, it’s how effectively can you reach your target audience in all areas.”
One key focal point is mobile technology where Martin believes AUSA is close to “cracking the code” (he believes that in the not too distant future, all weekly ads will be delivered via mobile applications, not through newspapers).
The veteran grocery executive also told the audience about the importance of corporate responsibility and AUSA’s priority on healthy living.
“How we handle social responsibility will be a game changer. It is vitally important,” Martin declared. “Part of that responsibility is to create tools and find ways for our customers to eat better every day. We truly do want to sell more stuff and better understand the consumer. But in the end, it is truly about people, be they associates, children or friends. It is important to try to influence people positively. If you can do that you can change the world.”