In talking with top Ahold executives recently, it’s clear how pumped up they are about the pending acquisition of 16 Genuardi’s units in the Philadelphia market from Safeway.
Carl Schlicker, Ahold USA’s chief operating officer, told me he expects it will be a “great combination” and added, “When we are able to move forward, we’ll move quickly.”
“I would anticipate from the time we’re able to start we’ll have them converted within three weeks,” he predicted (see the news feature here).
That’s fast, considering the conversions will include rebranding to Ahold’s Giant-Carlisle banner, which has a strong presence in that market.
Ahold, which is based in the Netherlands, hasn’t disclosed many specifics about plans for the units as it awaits closure of the deal, but a large group of people are working on the details.
Here’s the general strategy according to Schlicker: Returning to “some of the basic tenets that made Genuardi’s what it was in the past” while “moving in some of the technology and things we know about the market from Giant (Carlisle).”
Let’s face it, Ahold is thrilled to get these units because it’s so hard to obtain locations and build share in a crowded market like Philadelphia.
“The Genuardi’s units will help secure the real estate from some other competitors and add volume,” said John Rand, director of retail insights for Kantar Research. “That way they can hold market share versus competitors.”
The company, in fact, is now a bit more willing to move out of its comfort zone with U.S. acquisitions.
“I think we’re more ready to take a geographic leap than in the past,” Schlicker said. “Before it was totally in-market or maybe adjacent, but now the right opportunities wouldn’t prevent us from jumping a geographic distance.”
Boosting this confidence is a move to empower the local retail divisions — including Giant-Carlisle, Giant-Landover and Stop & Shop in New England and New York — with more decision-making authority. They are seen as partners in any acquisitions moves. And why not? They will be the ones asked to execute on it.
Moreover, any acquired company will become part of Ahold’s best-practice-sharing process, which has been fine-tuned over the years. This involves a two-way-street of sharing know-how among U.S. banners, and between divisions in the U.S. and Europe.
As long as Ahold sticks to these formulas, it has a good shot at success and avoiding any ill-conceived moves.