Ahold USA Names Tom Lenkevich New Giant/Carlisle President

Ahold USA announced earlier this month that Tom Lenkevich has joined the Giant/Carlisle division as president, effective March 4, 2014. He will report to Bhavdeep Singh, executive VP-operations, Ahold USA. Singh recently served in the role of Giant/Carlisle division president on an interim basis following Rick Herring’s retirement.

Lenkevich will manage all aspects of the division, with responsibility for Giant/Carlisle sales, operating profits, organization and people. The Giant/Carlisle division, headquartered in Carlisle, PA, operates nearly 200 supermarkets in Pennsylvania, Maryland, Virginia and West Virginia under the banners of Giant Food Stores and Martin’s Food Markets. The division employs approximately 31,000 associates.

Lenkevich comes to Giant/Carlisle with a strong record of retail experience, most recently with Save-A-Lot Food Stores as chief operating officer and before that as senior vice president of retail operations for the Earth City, MO-based extreme value discounter. While at Save-A-Lot, he was responsible for all aspects of retail operations, merchandising, marketing and procurement for the national and international chain of corporate and licensed stores for the Supervalu owned entity.

Lenkevich has also held a number of leadership positions of progressive responsibility with other large retailers as well, including: market director for Meijer, Inc.; divisional vice president of operations and vice president, merchandising and sales for A&P as well as several other positions of leadership in functions across the retail business.

In the Mid-Atlantic region, Lenkevich has served as president of the former Leedmark hypermarket store in Glen Burnie, MD. He worked for wholesaler Louis Lehrman & Son (Super Rite Foods) in Harrisburg and also was VP-operations for former independent retailer Foodtown and held the same post for B. Green’s corporate stores in Baltimore. He began his retail career working his way through college as a clerk at Pantry Pride in Central Pennsylvania.

“Tom’s decades of grocery experience combined with his Central Pennsylvanian roots makes him a great addition to the Giant/Carlisle division and the Ahold USA leadership team,” said James McCann, chief operating officer, Ahold USA. “In addition to leading the division, Tom will be driving activities to achieve sales results and working with the Giant/Carlisle team to preserve the heritage of the local brand while at the same time reshaping retail with a strong focus on reinvesting in value and quality, and offering customers an omnichannel shopping experience to meet their needs both today and in the future.”

Lenkevich was raised in New Cumberland, PA, and still has strong ties to the area. He is a graduate of PennState.

Last month, the large international retailer announced that its sales and earnings for its fourth quarter ended December 29 were both down.

For the second consecutive quarter Ahold struggled with its sales and earnings both in Europe and the U.S., this time in its busiest fourth period.

Ahold USA sales, which were originally released in January included an overall sales decline of 2.1 percent and identical store 2 percent (excluding gas). Moreover, U.S. share of market dropped slightly, the first time that has occurred in many years. On the earnings front, underlying operating income dropped from $262 million (4.3 percent of sales) to $243 million (4.0 percent of sales). At the end of 2013, Ahold USA operated 767 stores, five fewer than the previous year. That number included nine stores that were either opened or acquired and 14 units that closed.

Corporately, the parent Ahold organization, based in Amsterdam, experienced a 1.1 volume decrease (based on constant exchange rates). In January, Ahold also restructured parts of its European operation with CEO Dick Boer assuming more direct responsibility for several divisions.

In regards to the company’s financial report, Boer said: “In the fourth quarter our sales remained broadly flat at constant exchange rates, adjusted for the impact of Hurricane Sandy in 2012 and VAT (Value Added Tax) from tobacco sales in the Netherlands in 2013, reflecting a low level of inflation and pressure on volumes. Our underlying operating margin was somewhat under pressure, while our free cash flow remained strong at 0.5 billion euros. In a challenging environment customers remained focused on value and were cautious in their spending, particularly in the second half of the year. For the year we grew sales by 2.0 percent at constant exchange rates and slightly increased market share in all our major markets. Supported by good progress on our cost savings program, underlying operating income remained almost flat at constant exchange rates. Free cash flow exceeded last year’s record at 1.1 billion euros. As a result, the board has proposed a 7 percent increase in our dividend to 0.47 euros, reflecting a payout of 51 percent, slightly above the top end of our dividend policy range. In 2013, we continued to implement our ‘Reshaping Retail’ strategy, leveraging changing consumer needs and pursuing growth opportunities in both existing and new markets. We also continued to rapidly expand our online businesses, achieving strong double-digit sales growth.

“After the successful divestment of our stake in ICA, our shareholders approved a 1 billion euros capital repayment and reverse stock split in an Extraordinary General Meeting on January 21, 2014. We expect to complete the transaction by the end of the first quarter. This is in addition to our 2 billion euros share buyback program that is to be completed by December 2014.

“We remain committed to our financial guidelines for leverage, liquidity and credit rating. Going forward we aim to maintain a balance between investing in profitable growth, returning cash to our shareholders and reducing debt, and we will continue to move toward a more efficient capital structure.

“While we expect economic conditions to gradually improve, we remain cautious in our outlook for the food retail sector in 2014. Our ongoing focus on expanding our online businesses is expected to continue to result in strong sales growth. We will continue to look for ways to simplify our business in order to reduce costs so that we can invest in our value proposition and offer customers a better shopping experience every day.”