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Ahold Key Facts. 30 million customers every week Sales approaching $65 USD billion 4,500 stores in 25 countries on 4 continents 350,000 associates. THE EMERGING RETAIL LANDSCAPE. WINNERS & LOSERS. U.S. Retailing: competition from several channels…. Research Design. - PowerPoint PPT Presentation

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  • Mission

    ...To be the worlds best and most successful food provider

    Our mission is to become the best and most successful food provider. Strategic shift in the chase of the food dollar, which increasingly is spend out of home. Ahold wants to be part of every meal, at home, in restaurants, at work, in the hospital, yes, even in prison.

    Best reflects excellence in many ways. Ill address that later.

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  • Ahold Key Facts

    30 million customers every weekSales approaching $65 USD billion4,500 stores in 25 countries on 4 continents350,000 associates

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    Ahold Key Facts

    30 million customers every weekSales approaching $65 USD billion4,500 stores in 25 countries on 4 continents350,000 associates

  • Ahold Store Banners

    North America Europe Asia

    South America Central America

    SupermarketsHypermarketsConvenience storesSpecialty storesFood serviceE-commerce

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  • Strategy

    Multi-Channel Food ProviderGlobal Network of Regional Market Leaders Industry LeadershipProfitable Growth

    Share of stomach / Multichannel approachFormat differentiation:supermarkets, hypermarkets, convenience storesNew channels: Institutional food supply and foodservice, E-commerceGlobal Network: building up regional market leadersIndustry LeadershipInnovationExchange of Best PracticesExcellenceProfitable GrowthOrganicInvestment in existing brandsFormat and channel differentiationProduct innovation and line extension (Category management, Micro merchandising, Specialty, non-food,Meal solutions)External GrowthSound acquisition criteriaTrack record of enhanced returns and growthGlobal network with regional support

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  • Multi-Channel Food Provider

    RetailContinued investmentImproving marginsFoodserviceU.S. Foodservice, PYA / MonarchAbundant synergiesE-CommercePeapod, Inc.

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    THE EMERGING RETAIL LANDSCAPEWINNERS & LOSERS

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    U.S. Retailing: competition from several channels

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    Research DesignDate Source: 61,500 member ACNielsen Homescan Consumer PanelPrimary ChannelsGrocery (excluding Supercenters)Mass Merchandiser (excluding Supercenters)Supercenters*DrugstoresWarehouse ClubsDollar StoresConvenience/Gas* Includes Kmart, Target & Wal-Mart Supercenters

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    Warehouse Clubs, Supercenters, Dollar Stores & Convenience/Gas continue expansionFamily Dollar & Dollar General

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    More large Supermarkets

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    Petro outlets offset declines in Convenience chains

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    Grocery & Mass losing trips* Includes Kmart, Target & Wal-Mart SupercentersImpacted by pace of life, competition from restaurants, & other retail channels too!

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    Key Industry TrendsChannel Grazing

    Increased competition for Rx sales

    Gasoline retailing

    Frequent shopper program

    Demand for convenience

    Niche retailing

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    A new concept: Channel GrazingClear evidence that consumers take advantage of their channel options

    But how many retailers or retail channels do consumers include in their shopping mix?

    Any differences in shopping behavior among light versus heavy grazing households?

    Does grazing differ by household composition?

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    A new concept: Channel GrazingOver 900 national, regional, & local retailers & retail channels monitored via Homescan panel

    Households who shopped in 1 to n retailers were placed into three groups to define:

    Heavy grazers: shopped in over 28 retailers/retail channel per yearMedium grazers: shopped in 19-27 retailers/retail channel per yearLight grazers: shopped in 18 or fewer retailers/retail channel per year

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    Channel Grazers drive retail salesTotal U.S. - 52-wks ending 12/29/01 All Outlets

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    Channel grazing prevalent in more populated countiesTotal U.S. - 52-wks ending 12/29/01 All OutletsMore grazers where there is more variety74%

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    Channel grazing prevalent among couples & families w/older childrenTotal U.S. - 52-wks ending 12/29/01 All Outlets

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    Except for Convenience/Gas, females dominate channel shopping tripsAs males age, they handle increased share of tripsTotal U.S. - 52 wks ending 12/29/01

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    Higher basket values forFemale shoppersTotal U.S. - 52 wks ending 12/29/01

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    Increased Rx competition did you know?Rx sales rose 18% to $208 billion in 2001

    Doubling sales from 5 years agoMass sales grew 23% to $8 billionSupermarket sales grew 16% to $18 billionMail order Rx sales will surpass sales in Independent Drug Stores in 2002

    Source: Drug Store News

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    Gasoline retailing did you know?Share of gasoline sales from high-volume retailers is expected to grow from 5% to between 15% & 20% within four years

    Costco testified at a recent public hearinglocations with gasoline have a customer-repeat frequency of four times per month. Locations without gasoline have a repeat frequency of one time per month.

    Source: NACS

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    78% of U.S. households participate in a Grocery Frequent Shopper ProgramBut, 63% are in multiple programs!Source: ACNielsen Homescan surveys

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    Competition for Convenience Dual working households, less time for preparationImproved shelf life, refrigerated, convenient products..Consumers told us that if it's not easy, it's not eaten.

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    Convenience Still CompetesOld Fort Travel Plaza in Ft. Wayne, Indiana added delivery of just about anything (detergent, cigarettes, milk, etc.) along with their normal pizza deliveriesThis was driven by:increased competition from Kroger & Wal-Mart for gasoline salesYou cannot compete with them on price. They can sell gas at 25 cents a gallon and make it up selling lawnmowers.Store owner expects to add another 25% on top of their normal pizza sales & drive other foodservice sales

    Source: NACS Magazine March 2002

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    Niche Retailing

    Whole Foods is the largest retailer of natural and organic foods, with 128 stores Wild Oats is the 2nd largest natural supermarket chain in North America, with more than 100 stores

    EatZi is a bakery, a market & a restaurant with catering services for all occasions

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    SummaryConsumers take advantage of channel optionsGrocery channel shopping frequency continues decline; Mass declining tooDollar Stores & Supercenters posting strong penetration gainsHeavy category buyers purchase in multiple channels; Heavy grazers drive retail sales

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    SummaryThe demographics & shopping behavior of channel shoppers varies by channel Successful Retailers will use this knowledge to target growth via advertising, merchandising and promotional activities

    Successful Manufacturers will help Retailers and themselves with channel-specific targeting of products and promotions

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    SummaryRetailersAlternative channel retailers are coming after your shoppers & their shopping tripsinvest dollars to re-invent yourselves! Focus efforts against core/heavy shoppersexpand products & services to capture greater share of spendingfrequent shopper programs need to be more than just another dealInitiate efforts to increase loyalty among key occasional or light shoppers

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    Offerings that progressive retailers are using to re-invent themselvesDrive-thru & Drive-upIndoor food courtsOutdoor cafesOn-site gasoline pumpsBook sections w/seatingLeveraging food categories to drive frequency & ringOn-line ordering & home deliverySelf check-out countersIn/Out specialty items

    Enhanced wine sectionsFloral departmentsOn-site banking & other financial servicesHealth Food & Health Care sectionsCooking classesDepartment Store cosmetic countersChild care facilitiesGood tasting & variety of prepared foodsPhoto Processing

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    SummaryManufacturers

    Capitalize on the channel shopping diversity of heavy category buyers through expanded distributionif you dont a competitor will!

    Expand through tailored product offerings, not through increased distribution of existing offeringsmatch product offerings w/channel demographics and/or channel shopping behavior

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  • RETAIL LANDSCAPE 2003

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  • KEYS TO SUCCESS2003

    Michael Porter 1995 Competitive StrategiesOperational EfficienciesExecution of Strategy

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  • Who is Winning?2003

    Walmart OE, Price, Convenience,Geography,Costco OE, Quality at a Price, Adventure,HEB OE, Price,Geography, Customer (Neighborhood Marketing),Convenience, Central MarketPublix OE, Geography, Customer (NM)