business news in context, analysis with attitude

In his annual speech to shareholders this week, Ahold president/CEO Anders Moberg made the following statements:

  • ”We are continuing to build a strong and healthy financial foundation. We are moving closer to our customers. We are better differentiating our offering to meet our customers' needs. We believe all of these things are critical to our long-term success in an increasingly competitive sector.”

  • “Our divestment program not only helps us to generate the much needed financial resources to strengthen our balance sheet but, just as importantly, it brings back the much needed business focus to improve the performance of our core assets.”

  • “We want to ensure that we operate with the utmost integrity backed by rigorous controls and to ensure that we protect our company and associates through our business principles. Our efforts are certainly bearing fruit but we know that more remains to be done to attain our ultimate goal of a robust, effective and efficient control framework throughout the Ahold group.

    “Considering where we were just two years ago, this is, no doubt, a very ambitious goal. But let me say this for all to hear; we may hit some bumps here and there, we may struggle as we try to balance our many priorities, but our ultimate goal is crystal clear: to be among the best in the industry in this area. When we encounter issues, we take decisions and deal with them.

  • “We are working hard to re-establish U.S. Foodservice as a viable, reliable and ethical company that delivers value to Ahold. We have put in place a stronger, more transparent corporate governance and a more robust organizational structure.”

  • “This is not the time for large acquisitions. Growth for growth's sake will not be on our radar screen. It is about profitable growth.”

  • “We re-organized our retail businesses. We have created ``arenas'' which bring our operating companies in comparable markets together. This arena structure allows us to gain deep synergies.

    “Perhaps the best example of arena formation has been the integration of Stop & Shop and Giant-Landover, two of our leading U.S. supermarket chains. The process was not always smooth sailing, but the formation of this arena created a EUR 13.8 billion business in net sales. It was costly and at times disruptive to day-to-day business. However, from this year on, we expect to realize considerable savings every year from this initiative. The teams at Stop & Shop and Giant-Landover have done a great job at a very high pace to bring the two companies together.

    “Thanks to the creation of the arenas, we are able to better leverage the strengths and scale among our operating companies. We can better serve the customer. And we can focus on 'doing what is right for our customers.'”

KC's View:
He had us up to the stuff about Giant and Stop & Shop. We’re not saying what Moberg is describing isn’t possible…we’re just saying that many of the people we talk to aren’t convinced that the combined company can cater to DC-area customers as successfully and effectively as Giant of Landover traditionally has.