ROYAL AHOLD

1
ROYAL AHOLD

• Katie Setterfield
• Helen Garland
• Diane Gerrow
• Danielle Brady
• Michelle

2
AHOLD - BACKGROUND

• 1887 - Albert Heijn
• Netherlands
• 3rd largest Global Retailer
• Operates in
• - Europe
• - U.S.A
• - Asia
• - Latin America

3
AHOLD QUICK FACTS

• Mission Statement
• To be the best and most successful food
  retailer and foodservice operator
• Main Strategy
• Immense skills of acquisition in a wide range
  of mature and emerging markets (Neil Wrigley
  2002)
• Philosophy
• everything is possible

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AHOLD QUICK FACTS

• 9,000 STORES
• 450,000 EMPLOYEES
• Supermarkets, hypermarkets,speciality stores,
  discount stores, Cash and Carry and convenience
  stores.
• 80 of sales from outside domestic market

5
MAIN COMPETIORS

• WALMART
• Largest global retailer
• Target - international sales will account for
  25 future growth
• CARREFOUR
• 2nd largest global retailer
• Largest retailer in Europe

6
COMPETITION

• 56 of top 200 retailers now market in more than
  one country.
• Growing companies eg. Tesco, Kroger, Metro

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AHOLD EUROPE
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AHOLD - EUROPE

• European Operations
• Northern Europe
• Netherlands
• Southern and central Europe

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Domestic Market

• The Netherlands
• Albert Heijn
• Joint Internet based home delivery service

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European Competition

• Not many competitors in European market
• Tesco
• Metro
• Carrefour
• Cascino

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Food Sector Falling

• Consumer wealth rising
• However immature markets hypermarket
  development moving rapidly
• Concentrated market Norway
• Fragmented market - Poland

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Globalisation

• Dominant trend in retailing
• Focused strategy
• Ability to adapt to local conditions

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Centralising Procurement

• Massive buying power
• Significant savings
• Suppliers bigger access to bigger market across
  Europe

14
European Operations

• Czech Republic
• Slovakia
• Spain
• Portugal
• Poland

15
The Future

• Joint Venture
• Merger on the cards
• Move to the UK?
• Integrating Operations in Poland, Czech Republic
  and Slovakia
• Merging functions

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AHOLD U.S.A
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Ahold in the USA

• US Mass Retailer of the Year, 2002
• Acquisition policy since 1977
• Second largest food service provider
• Good acquisition strategy

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Ahold in USA

• Bi-Lo supermarkets in 1977
• Giant-Landrover Brunos in 1981
• Edwards supermarkets in 1983
• Finast Ohio supermarkets in 1988
• First National supermarkets in 1988
• Tops supermarkets in 1991
• Red Food Stores supermarkets in 1994

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Ahold in USA

• Mayfair supermarkets- 188m in 1995
• Stop Shop- 2.9bn in 1996
• Pathmark Stores Inc- FAILED
• Sugar Creek Forecourt Stores in 2000
• Peapod- 73m for 51 stake in 2000
• Grand Union (64 stores) in 2001
• Lady Baltimore Foods in 2002
• US Foodservice- 3.6bn

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Ahold in USA

• American Culture
• Rebranding is very tricky in retail. You have
  to be absolutely confident the new brand is far
  superior to the one you are closing down. There
  has to be a new value proposition for the
  customer.
• Mr van der Hoeven, Ahold CEO
• Therefore Ahold has a low US profile

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Ahold in USA

• Foreign firms experience greater flexibility
  lower barriers to entry in US market
• USA produces most of its own supplies
• Ahold sources globally
• New e-procurement office in Boston
• Walmart is main competitor

22
Ahold in USA

• Over-dependence on acquisitions?
• Road-block from Federal Trade Commission stopped
  proposed takeover of Pathmark Chain
• Accounting flaw caused fear among analysts
  share-holders

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AHOLD ASIA
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AHOLD IN ASIA

• Operating countries
• -Malaysia
• -Thailand
• - Indonesia

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MALAYSIA

• Over 40 stores
• 2,063 Employees
• 2000 sales euro 88 millionEntered Malaysia
  through a joint venture in 1996
• Then acquired all Tops stores in 2000
• 2001 Retail-training centre was established

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THAILAND

• 45 Stores
• 5,085 Employees
• 2000 sales euro 285 million
• Entered in 1996 through a joint venture between
  Central Retail Corporation (CRC) and Royal
  Ahold.

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SUPERMARKET FORMATS

• Tops supermarkets
• Marketplace by Tops
• City markets by Tops

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INDONESIA

• 23 Stores
• 1,356 Employees
• 2000 sales euro 27 million
• Entered in 1996 under a technical assistance
  agreement with PT Putra Serasi Pioneerindo

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PT AHOLD INDONESIA

• In 2002 Ahold acquired all shares from its
  previous technical agreement partner, resulting
  in a 100 ownership.
• At this point, the company name PT Putra Serasi
  Pioneerindo was changed to PT Ahold Indonesia.

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COMPETITION

• Ahold has come up against a lot of competition
  from competitors such as Tescos UK, Casino and
  Carrefour France.
• With these stores offering one-stop shopping.
• And at a more local level competition comes from
  Asias Wet markets. Which are the local street
  stalls that are very popular among the locals.

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THE FUTURE IN ASIA

• Ahold believes that their future in Asia is
  changing. They have made a lot of progress in the
  market, and Asia is still an attractive market
  for them.

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FUTURE

• However, Asia is less developed than they
  expected and what they are used to. Leading Ahold
  to believe that they operate better in a mature
  and semi-mature markets, than in Greenfields

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AHOLD LATIN AMERICA
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Ahold in Latin America

• Currently own 600 stores in 10 different
  countries
• Sales- 2.75 billion euros
• 3.8 of total sales in 2002

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South America

• 4 operating companies
• Brazil- Bompreco G.Barbosa
• Argentina- Disco
• Chile, Peru, Paraguay- Santa Isabel

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Brazil- Bompreco

• 116 stores
• Joint Venture with Bompreco
• Now has full ownership
• Has also acquired stores e.g Carrefour and
  Lusitanaian chain and Barbosa

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Argentina- Disco

• Joint venture with Velox Retail Holdings (VRH)
• Now has full control after VRH defaulted on debt
  repayments
• Also operates in Chile, Peru and Paraguay

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Chile- Santa Isabel

• Largest supermarket chain in Chile
• Joint venture again with VRH
• Prior to this - building up over Chile
• Had expanded internationally in Peru
• Jan 2001- Acquired all Agus supermarket shares
• Resulted increase from 9 to 23 stores in Santiago

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Chile- Santa Isabel (cont.)

• 2002- took full control of Santa Isabel
• Whether Ahold is going to continue to own Santa
  Isabel is unknown
  It is
  engaged in explanatory talks regarding the
  possible sale of its Santa Isabel stores in
  Chile. (Ahold
  representative)

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Central America

• 2002- Ahold and La Fragua announced joint venture
  with CSU to operate in 5 different countries
• Each partner owns 1/3 stake
• New company is called CARCHO (Central American
  Retail Holding Company)

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Recent News On Ahold

• Over past month- Ahold hitting headlines
• 500 million euros- accounting irregularities
• Share price down 70
• Speculation- Ahold may have to sell off
  businesses to stay afloat
• Also a possibility that Ahold may be susceptible
  to a bid for group

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Recent News

• Believed some of the worlds some of the world
  leading retailers are considering purchasing some
  of Ahold
• Examples- Tesco and Carrefour
• We are not candidates to acquire Ahold, but if
  portions of the company were up for sale we would
  look at them with our investment criteria in
  mind. (Daniel Bernard, Carrefour CEO)
  

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CONCLUSIONS