Bert Swartsenburg, Ahold’s MD of European Buying, has outlined the Dutch retailer’s strategy for future growth, which relies heavily on fostering closer ties with suppliers to drive innovation. Swartsenberg, speaking of the transformation in Ahold’s corporate culture following the company’s 2003 near-collapse, was addressing the IGD Annual Global Retailing Conference held in London yesterday (13 June).

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“The year 2003 was a very sad year for all the Ahold associates. But since Anders Moberg announced the ‘Road to Recovery’ we have rebuilt Ahold. … We have reengineered our retail business; we have refocused US Food Service; we have dealt with a lot of legal issues,” Swartsenburg told the conference. “I am convinced that today Ahold is among the best controlled companies in the world.”


Today, Ahold is the world’s fourth largest retailer and food service supplier, operating 16 different brands in 11 different countries with sales of approximately EUR45bn.


The company’s new strategy to 2010 is “to make it easy to chose the best” for investors, associates, suppliers and customers, Swartsenburg said. “We will create the best offering for our customers and make it easier for them to choose the best quality for their families.”


Ahold operates in a market with hard discounters at one end of the spectrum and specialist retailers at the other. “We want to surprise our customers with surprises well positioned in the middle of the price spectrum, offering price value on the bottom of our assortment and premium value at the high end of our assortment,” he said, adding that this was the simple business model that Ahold had used to reposition itself in the market.

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In the next four-years, Ahold aims to “significantly” reduce its cost base. This will allow the company to reinvest in lowering prices, offering better value an increasing innovation. Ahold hopes that this in turn will increase same-store-sales and earnings, Swartsenburg said, adding that “over the last couple of years we have been able to save more than EUR400m in procurement costs.”


These savings, coupled with a greater emphasis on private label, have allowed the company to drive through price repositioning in Ahold’s European markets.


However, Swartsenburg said, Ahold’s recovery and drive for future growth does not rest exclusively on lowering costs. Close cooperation with partner suppliers has allowed the company to drive innovation – “this has been driving not only differentiation but customer loyalty as well,” he said.


Ahold intends to work more closely in the future to drive product innovation, which it views as key to growth. “We are moving to the next generation of sourcing, which is strategic sourcing and category management,” Swartsenburg said.