Having a “value proposition and a pricing structure that is not strong enough,” Ahold Delhaize USA CEO JJ Fleeman said that Stop & Shop would be closing an unspecified number of stores (we’re hearing about 30 supermarkets) in the near future while investing aggressively in price at the remainder of the brand’s stores (397 supermarkets currently) that operate in Massachusetts (125 stores), Rhode Island (27), Connecticut (88), New Jersey (57) and New York (100).
Fleeman’s announcement was made at annual Ahold Delhaize’s annual investor strategy meeting held on May 23 in Zaandam, The Netherlands.
About Stop & Shop’s future, the Delhaize alumnus, who was promoted to the top U.S. job in April 2023, noted that the Quincy, MA-based brand would focus on its most important markets including those where the brand has “strong density, holds a strong market position or has stores that are performing well.”
During the four-hour presentation, Ahold Delhaize senior leaders updated investors, both attending in person and globally through a streaming webcast, on current projects as well important future priorities for the $95.6 billion retailer which has $59 billion of its annual sales accrued in the U.S. at its 2,040 supermarkets.
In launching its new “Growing Together” program, Frans Muller, president and chief executive of Ahold Delhaize said: “We have taken a multi-stakeholder approach to developing this new strategy, ensuring we balance the needs of our customers, the people we work with, and broader societal dimensions. ‘Growing Together’ ensures we will stay at the forefront of innovation in healthy foods, omnichannel experiences and supply chain transformation, serving customer needs through a well invested and future focused foundation. I am encouraged by the numerous avenues we have across our great local brands to realize our growth potential. By focusing on the things we do exceptionally well, we are together committed to fulfill these ambitions. By taking bigger steps, investing in our people and leveraging technologies, we are excited to unlock our purpose.”
When Fleeman spoke about 40 minutes into the proceedings, he explained, “As the largest grocery retailer on the East Coast, Ahold Delhaize USA and its local brands have a rich heritage in the markets they serve, with loyal customer bases, trusted products, and a reputation for being an integral part of their local communities. Over the next several years, we will strengthen the market position for each of our brands, including the revitalization of Stop & Shop. We will improve value for customers through price investments and enhance the customer experience through 1,000 targeted remodels and new stores. We will lead, grow and differentiate in ‘own brands,” build digital relationships through more personalized value, and improve operational efficiency at every level. With these moves, underpinned by strong talent and innovation, our brands are well positioned to lead in the grocery industry for years to come.”
Specifically, he added that more than $1 billion will be spent on price investments to improve its U.S. banners – Giant Food, The Giant Company, Food Lion, Hannaford and Stop & Shop. In growing its own brands’ share to potentially reach 45 percent of all U.S. sales in the next four years, the company noted that 95 percent of all customers’ baskets now already contain at least one private label product and that annual own label sales reached $14 billion last year.
Fleeman then recapped the areas of priority for all of the company’s U.S. brands.
At Food Lion, which the youthful chief executive called a “powerhouse brand” (with 46 consecutive quarters of increased comp store sales), growth will be accelerated through focused market expansion including an enhanced omnichannel remodeling program, building density with new stores in key markets and expanding its outer edge reach.
At the Giant Company and Hannaford, growth will come through price investments and market expansion.
At Giant Food, ADUSA will look to build on the 88-year heritage of the B-W market leader by investing in price and remodels.
In closing, Fleeman stated one thing of which he was certain: “We’re going to grow and we’re going to win.”
