ahold key facts
DESCRIPTION
Ahold Key Facts. 30 million customers every week Sales approaching $65 USD billion 4,500 stores in 25 countries on 4 continents 350,000 associates. THE EMERGING RETAIL LANDSCAPE. WINNERS & LOSERS. U.S. Retailing: competition from several channels…. Research Design. - PowerPoint PPT PresentationTRANSCRIPT
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Copyright © 2002 ACNielsena VNU company
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Copyright © 2002 ACNielsena VNU company
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Mission
“...To be the world´s
best and most successful
food provider…”
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Ahold Key Facts
30 million customers every week
Sales approaching $65 USD billion
4,500 stores in 25 countries on 4 continents
350,000 associates
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Copyright © 2002 ACNielsena VNU company
Ahold Key Facts
30 million customers every week Sales approaching $65 USD billion 4,500 stores in 25 countries on 4 continents 350,000 associates
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Ahold Store BannersNorth America Europe Asia
South America Central America
Supermarkets Hypermarkets Convenience stores Specialty stores Food service E-commerce
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Strategy• Multi-Channel Food Provider
• Global Network of Regional Market Leaders
• Industry Leadership
• Profitable Growth
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Multi-Channel Food Provider
• Retail–Continued investment
– Improving margins
• Foodservice–U.S. Foodservice, PYA / Monarch
–Abundant synergies
• E-Commerce–Peapod, Inc.
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THE EMERGING RETAIL LANDSCAPE
WINNERS & LOSERS
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U.S. Retailing: competition from several channels…
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Research Design
Date Source: 61,500 member ACNielsen Homescan Consumer Panel
Primary Channels Grocery (excluding Supercenters) Mass Merchandiser (excluding Supercenters) Supercenters* Drugstores Warehouse Clubs Dollar Stores Convenience/Gas
* Includes Kmart, Target & Wal-Mart Supercenters
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Warehouse Clubs, Supercenters, Dollar Stores &
Convenience/Gas continue expansionACNielsen Universe Estimates
143,571
82,811
39,553
5,636
9,133
1,212
904
144,866
78,824
49,437
6,399
3,652
148
661
Grocery
Conv/Gas
Drug
Mass Merch
Dollar Stores*
Supercenters
Warehouse
# of stores
1993
2001
•Family Dollar & Dollar General
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More large Supermarkets
ACNielsen Universe Estimates
2,436
29,783
111,352
1,664
28,621
114,581
Supermarket &Drug Combos -
$2mm+
Supermarkets$2mm+
IndependentGrocery <
$2mm
# of stores
1993
2001
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Petro outlets offset declines in Convenience chains
ACNielsen Universe Estimates
17,779
65,302
26,992
51,832
ConvenienceChains
Petro Outlets
# of stores
1993
2001
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Grocery & Mass losing tripsHousehold Shopping Frequency
75
23
18
15
15
10
11
78
25
17
15
14
10
10
83
26
15
15
13
9
10
85
28
14
15
13
9
9
Grocery
Mass Merch
Supercenters*
Drug
Conv/Gas
Warehouse
Dollar
Trips per Household
'98
'99
'00
'01
* Includes Kmart, Target & Wal-Mart Supercenters
Impacted by pace of life, competition from restaurants, & other retail channels too!
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Key Industry Trends
Channel Grazing
Increased competition for Rx sales
Gasoline retailing
Frequent shopper program
Demand for convenience
Niche retailing
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A new concept: Channel Grazing
Clear evidence that consumers take advantage of their channel options
But how many retailers or retail channels do consumers include in their shopping mix?
Any differences in shopping behavior among light versus heavy grazing households?
Does grazing differ by household composition?
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A new concept: Channel Grazing
Over 900 national, regional, & local retailers & retail channels monitored via Homescan panel
Households who shopped in “1” to “n” retailers were placed into three groups to define:
Heavy grazers: shopped in over 28 retailers/retail channel per year
Medium grazers: shopped in 19-27 retailers/retail channel per year
Light grazers: shopped in 18 or fewer retailers/retail channel per year
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Channel Grazers drive retail sales
34 3532
24
33
43
Light Grazers MediumGrazers
Heavy Grazers
% of Households shopping in:
% Households
% Dollars
Total U.S. - 52-wks ending 12/29/01 – All Outlets
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Channel “grazing” prevalent in more populated counties
26 30 3648
35 3535
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39 35 29 20
"A" LargeMetro
Counties
"B" FringeMetro
Counties
"C" SmallUrban
Counties
"D" RuralCounties
% of Households shopping in:
Heavy Grazers
Medium Grazers
Light Grazers
Total U.S. - 52-wks ending 12/29/01 – All Outlets
More grazers where there is more variety74%
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Channel “grazing” prevalent among couples & families w/older children
28
26
29
30
27
32
34
38
29
35
33
32
36
35
38
36
43
39
38
38
37
33
28
26
Childless Younger Couples
Mid Aged Childless Couples
Maturing Families
Established Families
Empty Nesters
New Families
Young Singles
Mid Aged Singles
% of Households shopping in:
Light Grazers
Medium Grazers
Heavy Grazers
Total U.S. - 52-wks ending 12/29/01 – All Outlets
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Except for Convenience/Gas, females dominate channel shopping trips
Share of channel trips
22
78
37
6347
53
67
33
71
29
74
26
64
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Males
Females
GroceryMassSupersDrugConv/GasWHCDollar
As males age, they handle increased share of trips
Total U.S. - 52 wks ending 12/29/01
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Higher basket values forFemale shoppers
$84.27
$40.84
$35.82
$20.37
$11.38
$11.38
$78.66
$32.88
$26.39
$17.39
$8.76
$9.49
Warehouse/Club
Mass
Grocery
Drug
Dollar Store
Conv/Gas
Average $ Basket Size
MalesFemales
Total U.S. - 52 wks ending 12/29/01
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Increased Rx competition – did you know?
Rx sales rose 18% to $208 billion in 2001
Doubling sales from 5 years ago Mass sales grew 23% to $8 billion Supermarket sales grew 16% to $18 billion Mail order Rx sales will surpass sales in
Independent Drug Stores in 2002
Source: Drug Store News
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Gasoline retailing – did you know?
Share of gasoline sales from high-volume retailers is expected to grow from 5% to between 15% & 20% within four years
“Costco testified at a recent public hearing…locations with gasoline have a customer-repeat frequency of four times per month. Locations without gasoline have a repeat frequency of one time per month.”
Source: NACS
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78% of U.S. households participate in a Grocery Frequent Shopper Program
But, 63% are in multiple programs!
35
55
6670
7478
1996 1997 1998 1999 2000 2001
% of U.S households w/Grocery frequent shopper card
Source: ACNielsen Homescan surveys
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Competition for Convenience
Dual working households, less time for preparation
Improved shelf life, refrigerated, convenient products..
“Consumers told us that if it's not easy, it's not eaten.”
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“Convenience Still Competes”
Old Fort Travel Plaza in Ft. Wayne, Indiana added delivery of just about anything (detergent, cigarettes, milk, etc.) along with their normal pizza deliveries
This was driven by: increased competition from Kroger & Wal-Mart for
gasoline sales“You cannot compete with them on price. They can sell
gas at 25 cents a gallon and make it up selling lawnmowers.”
Store owner expects to add another 25% on top of their normal pizza sales & drive other foodservice sales
Source: NACS Magazine – March 2002
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Niche Retailing
Whole Foods “is the largest retailer of natural and organic foods, with 128 stores”
Wild Oats “is the 2nd largest natural supermarket chain in North America, with more than 100 stores”
EatZi is a bakery, a market & a restaurant with catering services for all occasions
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Summary
Consumers take advantage of channel options
Grocery channel shopping frequency continues decline; Mass declining too
Dollar Stores & Supercenters posting strong penetration gains
Heavy category buyers purchase in multiple channels; Heavy “grazers” drive retail sales
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Summary
The demographics & shopping behavior of channel shoppers varies by channel
Successful Retailers will use this knowledge to
target growth via advertising, merchandising and promotional activities
Successful Manufacturers will help Retailers and themselves with channel-specific targeting of products and promotions
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Summary
Retailers
Alternative channel retailers are coming after your shoppers & their shopping tripsinvest dollars to re-invent yourselves!
Focus efforts against core/heavy shoppersexpand products & services to capture greater
share of spendingfrequent shopper programs need to be more than
just another deal
Initiate efforts to increase loyalty among “key” occasional or light shoppers
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Offerings that progressive retailers are using to re-invent themselves
Drive-thru & Drive-up Indoor food courts Outdoor cafes On-site gasoline pumps Book sections w/seating Leveraging food
categories to drive frequency & ring
On-line ordering & home delivery
Self check-out counters In/Out specialty items
Enhanced wine sections Floral departments On-site banking & other
financial services Health Food & Health
Care sections Cooking classes “Department Store”
cosmetic counters Child care facilities Good tasting & variety of
prepared foods Photo Processing
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Summary Manufacturers
Capitalize on the channel shopping diversity of heavy category buyers through expanded distributionif you don’t a competitor will!
Expand through tailored product offerings, not through increased distribution of existing offeringsmatch product offerings w/channel demographics
and/or channel shopping behavior
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RETAIL LANDSCAPE RETAIL LANDSCAPE 20032003
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KEYS TO SUCCESSKEYS TO SUCCESS20032003
Michael Porter 1995 Competitive Michael Porter 1995 Competitive StrategiesStrategies
Operational EfficienciesOperational Efficiencies
Execution of StrategyExecution of Strategy
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Who is Winning?Who is Winning?20032003
Walmart Walmart –– OE, Price, OE, Price, Convenience,Geography,Convenience,Geography,
Costco Costco –– OE, Quality at a Price, Adventure,OE, Quality at a Price, Adventure,
HEB HEB –– OE, Price,Geography, Customer OE, Price,Geography, Customer (Neighborhood Marketing),Convenience, (Neighborhood Marketing),Convenience, Central MarketCentral Market
Publix Publix –– OE, Geography, Customer (NM)OE, Geography, Customer (NM)
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Who is Winning Cont.Who is Winning Cont.
Whole Foods Whole Foods –– OE, Customer,Health, OE, Customer,Health, ExperienceExperience
Target Target –– OE, Information Systems, OE, Information Systems, Customer, BrandsCustomer, Brands
Walgreens Walgreens –– OE, Systems, Locations OE, Systems, Locations (NM (NM –– Intercept), Health, ConvenienceIntercept), Health, Convenience
Dollar Stores Dollar Stores –– OE, Price, CustomerOE, Price, Customer
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KEYS TO FAILUREKEYS TO FAILURE20032003
Lack of OE Lack of OE –– SGA ratios, EVA,ROESGA ratios, EVA,ROE
No strategy, moving strategy, No strategy, moving strategy, reactionaryreactionary
Lack of executionLack of execution
Lost touch with consumerLost touch with consumer
“Never go there”“Never go there”
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Who is Losing Who is Losing 20022002
Kmart Kmart –– OE issues, strategy neededOE issues, strategy needed
Montgomery WardMontgomery Ward
Rite AidRite Aid
Convenience StoresConvenience Stores
Grand UnionGrand Union
Independents?Independents?
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TBD 2003 TBD 2003 -- 20052005
AholdAhold AlbertsonsAlbertsons KrogerKroger SafewaySafeway DelhaizeDelhaize Wegmans Wegmans –– does size matter?does size matter? WinnWinn--DixieDixie PathmarkPathmark A&PA&P MeijerMeijer