AHOLD SEES FAST INTERNET GROWTH, SEEKS PARTNERS

AMSTERDAM, Netherlands -- Ahold is expecting big things out of electronic commerce and is seeking partners for its on-line efforts.

a published report. "We see this amount doubling each year in 2001 and 2002," said Cees van der Hoeven, president and chief executive officer. Long term, Ahold expects e-commerce to represent from 3% to 5% of its sales.

As a result, Ahold is seeking experienced, outside delivery and technical partners for its e-commerce operations, along with content providers for the company's Web sites, said Michael Meurs, chief financial officer. The retailer plans to develop a worldwide brand name for its e-commerce initiative.

Currently, Ahold's on-line operations carry the brand names of local chains, such as Stop & Shop, Quincy, Mass., and the Albert Heijn chain in the Netherlands. Most consumers now look up retailers by the names of the chains they already know, he said, according to an article by Reuters European Reports.

Most of Ahold's e-commerce projects are unprofitable and will remain so for the next year or two, Meurs said. The one exception is nextdaygourmet.com, a food service site in the United States, which is breaking even.

However, Ahold management is unconcerned about profits in this area, at least for now. "We thought profitability didn't matter in this business," van der Hoeven said.

Business-to-business purchasing initiatives are another story. The Albert Heijn chain now buys 60% of its total supplies over electronic exchanges, and Ahold's U.S. companies buy 80% that way. "As Ahold moves away from closed electronic data exchanges toward Internet-based purchasing, the company expects these percentages to grow to 70% for Albert Heijn and 90% in the United States this year," said van der Hoeven.

"We expect significant cost savings from switching to Internet purchasing throughout the entire company," Meurs said.

Eventually, Ahold plans to coordinate all its global purchasing through GlobalNetExchange, which Ahold expects to participate in with Carrefour, Sears Roebuck and Oracle. It is too early to say what size stake Ahold will take in GlobalNetExchange, as it is now in negotiations with the other partners, Meurs said.