Content Guy’s Note: Denise Larking-Coste, a Europe-based business writer specializing in retail and consumer trends, offers a unique point of view of the still-developing Ahold situation.
What can Albert Heijn, the now retired grandson of the founder of the international retailer Royal Ahold be thinking at the moment? How is it possible that one of the stars of international retailing has joined the disgraceful ranks of companies accused of accounting irregularities?
Is it due to the personality of the CEO, the taste for power, for size, for spread, which engages the company in a downward spiral? Is it due to the rationale of a global marketplace and the quest for critical mass that finally end up abolishing any notion of real control? Is it the evolution from the manager-owner model to that of the outside professional manager who, even unwittingly, contributes to a loss of corporate identity and obliterates the prudence and pragmatism that characterise family businesses? Or does success in retailing still require that managers be, above all, grocers with a real feel for store and product, and that have little in common with the financial specialists who come from other sectors of the economy, as was the case with the CEO of Ahold?
Until recently Ahold has followed a faultless path. The family grocer, established at the end of the 19th century, took up the challenge of providing new forms of modern commerce in the sixties with the development of self-service stores and supermarkets. Ahold was characterised by its propensity for continual innovation, driven by a corporate culture of consistent openness. The company was always a leader in adopting new logistical, operational and management systems; it constantly embraced new formats that were best adapted to a continually changing consumer. In the seventies, when the home market in Holland became saturated, the company embarked on a successful programme of international expansion.
Ahold’s culture was at the core of its successful development: it never feared to experiment and share its experience with other retailers in the sector. It is not only knowledge that counts – it is the way in which knowledge is applied – as one of Ahold’s directors once told me. The company’s managers were always willing to participate in industry committees and speak at international meetings in order to learn – and share knowledge.
The dramatic situation in which the company now finds itself probably originates in a little of all the above considerations. What is certain, is that the retail sector, which has contributed so to much to the improvement of choice and quality of product, at lower prices, and which has not done enough to communicate its contribution to the bettering of lifestyles all over the world, now finds itself aligned with a certain number of corporations in disgrace. And at the same time, the value of companies in the retail sector plunge on stock markets around the world.
It is a sad time for retailing.
What can Albert Heijn, the now retired grandson of the founder of the international retailer Royal Ahold be thinking at the moment? How is it possible that one of the stars of international retailing has joined the disgraceful ranks of companies accused of accounting irregularities?
Is it due to the personality of the CEO, the taste for power, for size, for spread, which engages the company in a downward spiral? Is it due to the rationale of a global marketplace and the quest for critical mass that finally end up abolishing any notion of real control? Is it the evolution from the manager-owner model to that of the outside professional manager who, even unwittingly, contributes to a loss of corporate identity and obliterates the prudence and pragmatism that characterise family businesses? Or does success in retailing still require that managers be, above all, grocers with a real feel for store and product, and that have little in common with the financial specialists who come from other sectors of the economy, as was the case with the CEO of Ahold?
Until recently Ahold has followed a faultless path. The family grocer, established at the end of the 19th century, took up the challenge of providing new forms of modern commerce in the sixties with the development of self-service stores and supermarkets. Ahold was characterised by its propensity for continual innovation, driven by a corporate culture of consistent openness. The company was always a leader in adopting new logistical, operational and management systems; it constantly embraced new formats that were best adapted to a continually changing consumer. In the seventies, when the home market in Holland became saturated, the company embarked on a successful programme of international expansion.
Ahold’s culture was at the core of its successful development: it never feared to experiment and share its experience with other retailers in the sector. It is not only knowledge that counts – it is the way in which knowledge is applied – as one of Ahold’s directors once told me. The company’s managers were always willing to participate in industry committees and speak at international meetings in order to learn – and share knowledge.
The dramatic situation in which the company now finds itself probably originates in a little of all the above considerations. What is certain, is that the retail sector, which has contributed so to much to the improvement of choice and quality of product, at lower prices, and which has not done enough to communicate its contribution to the bettering of lifestyles all over the world, now finds itself aligned with a certain number of corporations in disgrace. And at the same time, the value of companies in the retail sector plunge on stock markets around the world.
It is a sad time for retailing.
- KC's View:
