The Wall Street Journal reports that Ahold “said it would break up its two U.S. units into four so that it can better integrate acquisitions and allow decisions on customer needs to be taken at a more local level.”
According to the story, “Stop&Shop/Giant-Carlisle and Giant Landover will be separated into Stop & Shop New England, Stop & Shop Metro New York, Giant-Landover and Giant-Carlisle.” Carl Schlicker, CEO of Stop & Shop/Giant-Landover, has been named chief executive of the four newly reorganized U.S. divisions.
“In recent quarters,” the Journal writes, “the company has benefited from a revamp of its U.S. operations that it started about two years ago. It had started reformatting and modernizing its stores and lowering its prices before the economic downturn hit, stealing a march on rivals who had to cut prices once the U.S. went into recession. It has said that it hopes to acquire stores that are sold by rivals during the downturn.”
At the same time, even as Ahold says that it is reorganizing to make it easier for it to integrate acquisitions, there remains much speculation that Ahold itself could be an acquisition target, with both Tesco and Delhaize mentioned as possible buyers. (Tesco seems to be the flavor of the day in all this chatter, which could mean nothing.)
According to the story, “Stop&Shop/Giant-Carlisle and Giant Landover will be separated into Stop & Shop New England, Stop & Shop Metro New York, Giant-Landover and Giant-Carlisle.” Carl Schlicker, CEO of Stop & Shop/Giant-Landover, has been named chief executive of the four newly reorganized U.S. divisions.
“In recent quarters,” the Journal writes, “the company has benefited from a revamp of its U.S. operations that it started about two years ago. It had started reformatting and modernizing its stores and lowering its prices before the economic downturn hit, stealing a march on rivals who had to cut prices once the U.S. went into recession. It has said that it hopes to acquire stores that are sold by rivals during the downturn.”
At the same time, even as Ahold says that it is reorganizing to make it easier for it to integrate acquisitions, there remains much speculation that Ahold itself could be an acquisition target, with both Tesco and Delhaize mentioned as possible buyers. (Tesco seems to be the flavor of the day in all this chatter, which could mean nothing.)
- KC's View:
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One of the major criticisms of Ahold over the past few years has been that some of its US consolidation efforts have made its management out of touch with local markets, especially in the Washington, DC, area, where Giant-Landover is not seen with the same local sentiment as it used to be.
So the question is whether these new organizational efforts will make the company’s marketing efforts more localized. They might...or, on the other hand, the reorganization could be mostly cosmetic, or done for the purpose of being able to sell or spin off specific groups of stores more easily.
Hard to tell at this moment. But smarter people than I suggest that the competitor that Ahold really needs to worry about is Wegmans, which reportedly is an expansionist mode and is targeting some of the markets that Ahold serves.
