The Baltimore Sun> reports that Ahold-owned Giant Food plans to “overhaul a majority of its stores in the most aggressive strategy yet to fend off the growing competition that has caused the company to lose some of its footing as the region's largest grocery chain. The grocer said it would remodel or replace 100 stores during the next three years. It's the largest investment made in the 185-store supermarket chain since Dutch food company Royal Ahold bought it for $2.7 billion in 1998.”
The strategy comes after a period of time during which the company has been closing underperforming stores, cutting prices and consolidating operational functions with
Ahold’s Boston-based Stop & Shop division.
The strategy comes after a period of time during which the company has been closing underperforming stores, cutting prices and consolidating operational functions with
Ahold’s Boston-based Stop & Shop division.
- KC's View:
-
From everything I’ve heard, the biggest challenge that Giant faces in trying to convince customers that it is a local supermarket chain, no matter what company owns it. That’s the position that Giant always occupied, and that is the position that it has lost over the past few years, and not just because of the consolidation with Stop & Shop.
Though, it is hard to convince people that you are a local company when Giant does things like it did yesterday – sending out as press release saying that it was announcing “sweeping price reductions for dairy, frozen and coffee products,” in line with previous price reductions that it has announced. The problem is that the press release was almost word-for-word identical to one sent out by Stop & Shop at the same time. I understand about operational efficiencies, and I understand that Ahold has abandoned its previous strategy of allowing its divisions a certain amount of autonomy. But it is this new approach that seems to be hurting Giant.
Even with the store overhaul, the problem is that a lot of people may not believe Giant, and a lot of people may not remember that Giant once dominated the market to an extent that nobody else really could make any headway there. That’s not the case anymore. Giant is perceived as weakened and against the ropes, and I’m not sure that announcing this overhaul of 100 stores is going to frighten anybody.
