The Dutch company is not new to convenienceit previously operated the Golden Gallon, Wilson Farms, Sugarcreek Stores and Tops Xpress c-store chains, but got out of convenience retailing by 2005. In April 2009, it launched the Giant To Go c-store concept through its Giant Food Stores LLC unit.
Ahold, which posted a better-than-expected 22% rise in third-quarter [image-nocss] net profit, also initiated a 350 million Euro ($522 million U.S.) cost-cutting program and warned that competition, especially from Wal-Mart, will intensify in the holiday season, said a Dow Jones report.
The company, which generates over half its sales in the United States, revealed that operating income at the Giant supermarket chain fell 10%. The retailer's CEO, John Rishton, said only that "We continue to invest in prices at Giant Carlisle, as we do in all our chains."
On Wednesday, Ahold unveiled a new savings program to run through 2012 aimed at cutting costs such as store expenses and those in the supply chain. The new program will replace a 500 million Euro ($746 million U.S.) cost-reduction plan that began in 2006 and is due to conclude this year.
The retailer said its third-quarter net profit rose to 238 million Euros ($355 million U.S.), from 195 million Euros ($291 million U.S.) in the same period a year ago.
On November 5, the group announced it was appointing new operational managers for the Europe and United States, freeing up the board members to spend more time on expansion projects. Rishton reiterated that Ahold was looking at both organic growth as well as acquisitions.
"The past three years, we focused on repositioning ourselves, now it is time to grow", he said.
Organic growth in the United States could include new store formats such as the c-store pilot it currently runs in Pennsylvania, Rishton said. "We will add a few more of those convenience stores in 2010, but rolling out a new format takes time."
The organizational revamp was seen by analysts as a first step to end several years in which Ahold has underperformed the market and its European and U.S. peers, such as Carrefour SA, Supervalu Inc. or Safeway Inc., said the report.
Several years ago, Ahold decided to sell off its c-stores to focus on it core business of supermarkets. In fall 2003, Ahold USA sold its 138-store Golden Gallon c-store chain to The Pantry Inc. for $187 million.
In June 2005, Ahold completed the sale of its chain of 122 Wilson Farms, 66 Sugarcreek and 10 Tops Xpress c-stores, part of its Tops Markets LLC subsidiary, to WFI Acquisition Inc. A local acquisition team, Wilson Farms Inc., Buffalo, N.Y., formally acquired the chain from Ahold USA. The amount of the sale was not disclosed; however, estimates of the purchase price range from $42 million to $65 million.
In April, Carlisle, Pa.-based Giantwhich operates nearly 150 supermarkets in Pennsylvania, Maryland, Virginia and West Virginiaopened the Giant To Go pilot location.
"Giant To Go will be more than your typical convenience store with everything customers would expect to find in a convenience store but with an emphasis on fresh, on-the-go products and savings for which Giant is well-known," Sander van der Laan, president and CEO of Giant Food Stores, said at the time.
The 4,422-square-foot "pilot store" has approximately 3,100 SKUs, compared to the 50,000 or so found in the average Giant supermarket, and it is "packed full of convenience and value," said van der Laan, who gave members of the media, including CSP Daily News, a tour of the new store before its official opening. The c-store is complemented by four multi-pump dispenses (MPDs) offering unbranded gasoline with pay at the pump.
(Click here for previous coverage of the Giant To Go store, including detailed rundown of the amenities it offers inside and out. Andclick here for previous coverage of Ahold.)
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