Ahold Looks for Answers
By George Anderson
Royal Ahold said yesterday that it was going to abandon its financial targets for the year in light of the weak performance of its U.S. supermarket business.
Ahold CEO Anders Moberg said, “Competitive and operating cost pressures have been greater than expected, and the turnaround at certain businesses has been slower than planned.”
“Going forward, we’re very well aware . . . that we need to take further steps, more probably drastic steps [than] we’ve taken in the past,” he said.
Ahold plans to name a new CEO for its Stop & Shop and Giant-Landover operations next week in an attempt to right that ship. Former CEO Mark Smith who announced his retirement last month will stay on as the new chief executive transitions into the job.
According to a Washington Post report, Ahold plans to continue remodeling its Giant Food stores even if cost cuts are necessary. The company has had success at its Albert Heijn and ICA food chains after remodeling stores in Europe.
The company also plans to reduce price promotions to focus on every day values in its stores while pushing private labels, such as its Nature’s Promise organic line.
Moderator’s Comment: What challenges does Ahold face in turning around its U.S. businesses? What will it need to do if it is to compete successfully?
George Anderson – Moderator
- Ahold profits sink; competition cited – The Associated Press/Philadelphia Inquirer
- Royal Ahold Lowers Sales Forecast for Giant – Washington
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