Ahold USA has said that it is pleased with the ongoing progress being made on its Value Improvement Program (VIP), with sales gains reported across all three of its supermarket banners. However, the company warned, it is yet to see the full impact of the global financial meltdown.

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Since the implementation of VIP in 2006, Ahold has invested in reassessing its product offering and increasing the number of own label products carried, lowering prices and a store renovation programme. The company aimed to position its three formats – Giant Carlisle, Giant Landover and Stop & Shop – in the middle of the market, competing with discounters on price and high-end grocers on quality.


Importantly, the Dutch-owned business formulated a strategy of brand building, Ahold USA COO Lawrence Benjamin told journalists at an Ahold media event in Washington DC yesterday (28 September).


“A brand is a promise… we want to transform our stores from supermarkets to powerful consumer brands,” he said.


Looking at the third quarter sales performance, which was released last week, Benjamin said that this strategy is beginning to pay off. Giant Carlisle saw identical sales rise 5.4%, Stop & Shop identical sales were up 3.8%, while Giant Landover booked its first sales increase in 25 quarters with comparable sales up 0.6%.

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“Q3 08 provides some evidence that what we are doing is working… we feel very good about Q4,” he commented.


Nevertheless, the “red flag” currently waiving is the economic downturn, with the “wave” yet to hit being rising unemployment in the US, Benjamin said.


“We feel good about what we are doing… but what we don’t control is the economy,” Benjamin warned. “Never has it been more important to stay in touch with [consumers]… never has it been more important to respond to what they think… never has it been more important to offer a value proposition.”