Ahold Delhaize on track to hit over $8bn in online sales in 2020

By Mary Ellen Shoup

- Last updated on GMT

Photo: Ahold Delhaize USA
Photo: Ahold Delhaize USA

Related tags ahold delhaize omnichannel Online grocery e-commerce

Ahold Delhaize – whose store brands in the US include Food Lion, Giant, Hannaford, and Stop & Shop – is accelerating its omnichannel business model with dozens of new stores and nearly 1,400 new Click & Collect locations planned for 2021, as well as the introduction of a digital ‘endless aisle’ solution offering customers thousands more products online.

In 2020 and 2021 cumulatively, the retailer will have increased its online capacity by 100% in the US, and today reaches approximately 90% of US households with home delivery and Click & Collect shopping options.

Ahold Delhaize registered a 6.8% net sales increase to approximately US$21bn (€17.8bn) across its European and US retail businesses for Q3 2021.

“Our results reflected our ability to leverage our leading local digital and omnichannel platform, which generated nearly 115% net consumer online sales growth in the US and nearly 50% growth in Europe in the quarter, at constant exchanges rates,”​ said Frans Muller, president and CEO of Ahold Delhaize.

“We continue to adapt to changes we are seeing in consumer shopping patterns and behavior. Over the coming years, we will invest in our business to solidify our position as an industry-leading local omnichannel retailer and increase our share of the consumer wallet.”

Advancing value proposition

Specifics of the grocery retailer’s omnichannel strategy designed to better serve its US customers will include moving to a fully-integrated, self-distribution model beginning in 2023. Muller commented that the company is ahead of schedule on this plan and that its first integrated distribution center will go live in 2021.

At the same time, the company will be testing a new subscription offer under the GIANT Company brand in Q1 2021. The annual membership fee will be under $100 and will provide customers with an improved value proposition and preferential delivery time slots to drive increased loyalty and engagement.

The company will also launch 1,500 to 2,000 more own-brand items in 2021, adding on to its existing selection of 15,000 private label products.

“In October, the US announced its target for at least 54% of own-brand food sales to be from products that achieve one, two, or three stars through the Guiding Stars nutrition guidance program​ by 2025; starting in 2020, they will also disclose annually the percentage of food sales generated from all products that achieve one, two, or three stars,”​ said Muller.

The retailer will also significantly increase the number of products sold online by up 100,000 additional items spanning several food and beverage and general merchandise categories.

Outlook for 2021

Despite continued uncertainty over the uncontrolled pandemic, Ahold Delhaize said it will reach its consumer online sales goal of US$8.27 (€7bn) by the end of 2020, one year ahead of schedule.

“We will find ways to improve our online productivity and are on track to achieve the €1.9bn cumulative cost savings target by 2021,” ​said Muller.

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