Ahold Delhaize Takes Control of Stop & Shop Distribution Center

Ahold Delhaize USA today flipped the switch on an Assonet, Mass., dry grocery distribution center, marking the first facility to transition from third-party to company control as part of the retailer’s $480 million, three-year self-distribution initiative.

The 1.1 million-square-foot distribution center, known as Freetown Grocery, serves more than 200 Stop & Shop stores in New England. Stop & Shop, along with other legacy Ahold USA brands Giant Co. and Giant Food, are transitioning control of their distribution and warehousing services from C&S Wholesale Grocers—a move the retailer said will provide infrastructure to support aggressive omnichannel growth plans, increase local product availability and improve speed to shelf, providing benefits of freshness in stores, cost savings and supporting a newly launched vendor collaboration program called ADvantange.

Another five facilities currently managed by C&S on behalf of those brands are still awaiting transition, including distribution centers in Jessup, Md. (Giant Food); Carlisle, Pa. (The Giant Co.); and a fresh-food facility in Assonet set to switch over this year.

“Our work to transform the supply chain to an integrated self-distribution model of the future is not only on-time, but ahead of schedule,” said Chris Lewis, EVP of supply chain for Retail Business Services, Ahold Delhaize USA’s services company. “Today marks an important milestone in our journey with the transition of procurement at this facility, and we’re looking forward to other facility transitions this year. On top of that, we’ve launched new programs to begin to help us as we optimize the network at scale.”

Ahold Delhaize USA announced its plans to fully self-distribute in December 2019. In addition to the above moves, Ahold Delhaize’s ADUSA Distribution will open new facilities in Mauldin, S.C., and Manchester, Conn., this year. Construction is also underway for two new fully automated frozen facilities.

Freetown Grocery was founded in 2004. Stop & Shop continues to own the facility and fulfill orders, while ADUSA Procurement manages replenishment and inventory.

“This transition is an important one for the Stop & Shop brand because it gives us more control and ultimately enables us to better serve our stores and our customers at more than 200 Stop & Shop locations across Massachusetts, Connecticut and Rhode Island,” said Jim Labrecque, VP of distribution operations for Stop & Shop.

Enhancing Vendor Relationships

In addition to the facility transitions, other key aspects of the transformation, such as evolving digital and technology, scaling procurement and modernizing ways of working, are also underway, including the new ADvantage program. Described as an industry-leading vendor collaboration program, ADvantage is designed to drive better collaboration between Ahold Delhaize USA companies and suppliers, delivering growth, innovation and efficiency across the supply chain from product origin to a customer’s hands, officials said.

“By working smarter with suppliers through ADvantage, we will be able to drive a new era of collaboration to open new opportunities and create efficiencies,” said Lee Nicholson, SVP of procurement for ADUSA Procurement and head of the ADvantage program. “The program officially launched on Jan. 1 with nearly 200 suppliers participating. We’re already seeing results from the increased focus on collaboration and driving mutual growth.”