Ahold USA COO Carl Schlicker To Retire; James McCann Will Oversee U.S. Retail

On November 1, Carl Schlicker announced his retirement as chief operating officer of AholdUSA, effective February 1, 2013. Ahold has named James McCann as his successor. In addition to his new role, McCann also will continue as a member of Ahold’s corporate executive board.

According to Amsterdam based Ahold, in the coming weeks and months, Schlicker will support a transition of leadership and help McCann to get to know the divisions, support offices, and introduce him to important stakeholders for Ahold USA. After his retirement, Schlicker, 61, will stay on in an advisory capacity to the corporate executive board.

Schlicker leaves a strong legacy in his 38 year grocery career that began in 1975 with Pathmark. He joined the Ahold organization as a store manager in 1986 at Connecticut-based First National Supermarkets (later Edwards Super Food Stores). In 1998, Schlicker transferred to Giant Food Stores in Carlisle, PA as executive VP-store operations. In 2000, he was promoted to executive VP-sales and marketing. In January 2007, Schlicker was named president and CEO of the Giant/Carlisle division, and in July 2008, he accepted the appointment as president and CEO of Stop & Shop-Giant Landover. He was promoted on November 5, 2009 to CEO of Ahold USA Retail, and on February 1, 2011, he was appointed to his current position as chief operating officer of AholdUSA.

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“Firstly, I would like to personally thank Carl for his immeasurable contribution to our company during the past 25 years. He is a true veteran of the supermarket industry, having started work in retail in 1975,” said Dick Boer, Ahold’s chief executive, who added, “For me, Carl is the consummate retailer and team leader. He always puts the common goal ahead of his own individual success – ”We” instead of “me” – leading people to deliver something together above and beyond their personal contribution. During the last few years, for example, he has built a highly skilled and diverse leadership team at Ahold USA he can be proud of. As a key member of the Ahold executive team, Carl has also been critical in helping define the overall ‘Ahold Reshaping Retail’ framework and helping to establish stronger bonds within the global organization. Under his leadership, innovations in customer loyalty and insight programs were possible, as well as far-reaching community support programs with a focus on fighting hunger and advocating for children. His legacy of creating growth and innovation, and his focus on delivering customer loyalty by delivering value, quality and service is something recognized throughout the Ahold family, but certainly also more broadly in the retail industry.

“With such an impressive track record, Carl certainly deserves a relaxing and enjoyable retirement. On behalf of all of us at Ahold, I wish him and his family all the best for this next chapter in their lives. While Carl is retiring, there are few leaders, in any industry, who have positioned their business so confidently for the future while staying true to local brands and legacies. We are fortunate to be inheriting an exceptional leadership team as well as employees who are the best in the business. James will build on the strong foundation Carl has laid and will operate closely within Ahold’s global operations.”

The British born McCann joined Ahold as chief commercial and development officer in September 2011 after spending more than 20 years with some ofEurope’s largest retailers. Prior to joining Ahold, McCann was executive director for Carrefour France and a member of Carrefour’s group executive board. During the previous seven years, he held leading roles at Tesco, including leadership of some of their most successful markets such as Hungary, Poland and Malaysia. Prior to that, he worked for Sainsbury, Mars and Shell.

Boer noted: “Since his arrival, McCann has focused on strengthening our e-commerce proposition and customer loyalty programs as part of the company’s robust growth strategy that was launched last year and is now being implemented. This appointment is a natural next step for James. With his strong track record in leading roles at global retailers, James is very well qualified to take on this important role within Ahold.”

McCann, 43, and his wife will be moving to the United States early next year, and he will be dividing his time between both the Quincy, MA and the Carlisle Ahold USA support offices, which will continue to play important roles in the future of the Ahold USA organization according to Boer. A search for a successor for McCann has begun, and more information will be shared as decisions are made.

In other Ahold news, the global Dutch retailer announced its third quarter earnings and sales, and while the results were solid there was some mild revenue slippage in theU.S.in what Boer said were continuing challenging market conditions.

In the quarter ended October 7, Ahold posted operating income of euro 289 ($367 million), a decline of 3.7 percent from the previous quarter. Total company sales were euro 7.6 billion (9.65 billion), an increase of 3.7 percent at constant exchange rates. Net income was euro 139 million ($176.5 million), down 45.9 percent (including a euro 90 millionICAtax charge ($114.3 million) and Ahold’s underlying operating margin was 4.1 percent.

Boer stated: “We continued to invest in competitiveness and gained market share in our major markets. Market conditions remained challenging, with consumers cautious in their spending and with ongoing high levels of promotional activity in both theUnited StatesandEurope. Sales growth in theUnited Stateswas modest, reflecting declining retail price inflation and a strong sales quarter last year. Through stringent cost control we were able to deliver a solid margin performance. In theNetherlandswe were pleased with a strong sales performance, as our value investments gained traction. Margins in theNetherlandswere impacted by these investments, which were not fully offset by cost savings and by the inclusion of bol.com for the full quarter. We remain cautious in our outlook and expect market conditions to continue to be difficult. We will closely monitor the potential impact of rising food commodity costs, particularly in theUnited States. We are confident that we are well on track to execute our strategy and we will continue to invest in growth. We are making progress on our Reshaping Retail strategy at Ahold and continue to focus on improving our competitive position through cost reductions and overall simplification of our processes. We are on target to deliver our euro 350 ($444.5 million) cost savings program for the years 2012-2014. We continue to invest in profitable growth and act when opportunities arise.”

Highlights of its third quarter, which ended October 7, include: Giant/Carlisle completed the first full quarter of operations for the 15 former Genuardi’s stores it acquired on July 13 for $113 million in the Philadelphia market; Peapod started piloting a pick-up service in the Chicago area; Albert Heijn converted the first 14 of the 82 stores acquired from Jumbo into Albert Heijn supermarkets; the company opened its first store in Germany, an “Albert Heijn to go” convenience store in the city center of Aachen; another two Albert Heijn supermarkets opened in Belgium. Year-to-date Ahold has added six stores bringing its total number of Belgian stores to eight; Bol.com opened a specialist health and beauty internet store, and made it possible for customers to search and order using their cell phones; and Albert.nl opened its third distribution center in theNetherlandsto extend its capacity.

Furthermore, Ahold announced in the third quarter that we are exploring strategic options regarding its 60 percent holding in ICA.

In theU.S., third quarter net sales were $5.9 billion, up 1.9 percent. Identical sales were down 0.2 percent (down 1.5 percent excluding gasoline), reflecting ongoing challenging market conditions, strong sales growth in the third quarter of last year, and the impact of a decline in pharmacy sales due to the conversion of brand-name drugs to generic versions.

Ahold said it achieved market share gains in both the supermarket and all outlets channel as sales benefited from our strong promotional activities. Underlying operating margin was 4.0 percent compared to 4.2 percent last year.

The big retailer declared it was able to largely offset the impact of both increased promotional activities, which it said were are necessary in the current economic downturn, and cost inflation in wages, pensions and insurance.

For the first three quarters, net sales were $19.7 billion, up 2.7 percent. Identical sales were up 1.2 percent (0.3 percent excluding gasoline). Underlying operating margin was 4.1percent compared to 4.3 percent last year.