Ahold Delhaize has presented its growth strategy - Leading Together - at the retailer's 2018 Capital Markets Day in New York City.
Supported by the retailer's strong local brands, best-in-class cash generation, and a balanced approach to capital allocation, the strategy focuses on driving comparable sales growth and market share gains over the next three years.
The Dutch-Belgian retail giant expects to double its net consumer online sales to around €7 billion by 2021.
The group posted a 4.2% increase in comparable sales (excluding BOL.com) in its Dutch operations in the third quarter of the year, and a 3% rise in comparable sales in the United States.
'Focus On Growth'
President and CEO of Ahold Delhaize, Frans Muller, said, "In an industry that's undergoing rapid change, fuelled by shifting customer behaviour and preferences, we will focus on growth by investing in our stores, omnichannel offering and technological capabilities which will enrich the customer experience and increase efficiencies.
"Ultimately, this will drive growth by making everyday shopping easier, fresher and healthier for our customers."
Other strategies include repositioning its largest US brand - Stop & Shop, and saving €1.8 billion between 2019 and 2021 with the ‘Save for Our Customers’ programme.
The company also expects to generate around €2 billion in free cash every year from 2019 to 2021.
'Stable Group Margin'
Muller added, "Our commitment is to self-fund the investments needed to drive growth, as our new cost savings program will allow us to maintain a stable group margin through 2019.
“This will allow us to invest in our stores, omnichannel offering, and technology, while we explore and seize new leadership opportunities in existing and adjacent markets."
For 2019, Ahold Delhaize expects a stable group margin and high single-digit EPS growth, while buying back €1 billion of its own shares.
Capital expenditure will be around 3% of annual sales in the next three years.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.
