As major announcements go, the appointment of Frans Muller as the new Ahold Delhaize chief executive, once Dick Boer retires this coming July, took few by surprise.
For one thing, the 57-year-old Dutchman has spent the past two years, since the merger of Ahold and Delhaize, as deputy chief executive and chief integration officer of the combined group.
In February, Belgian daily De Standaard spilled the beans somewhat about the group's succession plans when it revealed that Muller was to be named as Boer's successor.
There's no doubt that on paper, Muller has the pedigree to lead a multinational and indeed multi-continent operator such as Ahold Delhaize, having previously held the position of president and CEO of Delhaize Group, and prior to that spending more than 15 years at Metro Group, including five years as CEO of Metro Cash & Carry.
Now that his rumours have been confirmed as true, however, analysts are weighing up the challenges and opportunities open to the new CEO as he ascends to the hotseat.
Analyst Viewpoint
Commenting on the announcement, analyst Fernand de Boer of Petercam said that the move to appoint Muller "does not come as a surprise", given the earlier coverage on the announcement.
"Although we highly respect Dick Boer and regret him leaving, we are also very pleased [with] his successor. Frans Muller has proven to have the right skills and we had the impression that he was well respected in the US, where Ahold Delhaize generates some 65% of revenues and EBIT."
Elsewhere, Bruno Monteyne of Bernstein Research said that he doesn't "expect a major strategic shift or impact on current merger integration" from the appointment of Muller as CEO, adding that "Frans has a strong track record: since taking over as Delhaize CEO in November 2013 to the merger with Ahold, Delhaize shares more than doubled in value."
Another analyst, who did not wish to be named, issued a note of caution, saying that "Dick Boer has a better track record than Frans Muller.
"What did [Muller] achieve at Metro Cash & Carry? He completely missed the trend towards delivery in foodservice."
Building A Reputation
When Muller was appointed CEO of Delhaize back in 2013, there were some similar grumblings about his track record - what was a cash and carry man doing entering the big bad world of retail?
But in Muller, Delhaize saw someone that could bring true international experience to the team, and continue the positive work - particularly in the US - that had been undertaken by his predecessor Pierre-Olivier Beckers.
At Metro, Frans held positions in Eastern Europe, Russia and Asia Pacific, and also spent three years as head of Metro Group Buying; a key qualification for any would-be retail chief executive.
He's also proven himself adept at handling crises - back in 2010, he faced a barrage of criticism from charity Oxfam over the treatment of workers at Metro India, which he handled with dexterity.
At Delhaize, and latterly at Ahold Delhaize, he managed the growth of the group's US operations, most recently leading Delhaize America on an interim basis between October 2016 and January 2018.
US Strategy
And it is the group's US ambitions that Muller will likely focus on once he takes the hot seat.
Since Amazon's takeover of Whole Foods, share prices in Ahold Delhaize have dipped, with many analysts calling for further consolidation, or a potential merger with a retailer like Kroger.
"We have before written that we believe the key to success in the US market will increasingly be scale and we believe a sensible way to achieve this would be a merger of Ahold Delhaize's US business with Kroger," Bernstein Research's Monteyne commented.
"Frans steered Delhaize into the merger with Ahold and may be the right person to execute another merger and see the group through a second US integration."
As the old saying goes, 'a change is as good as a rest'. With a new man at the helm, is it time for Ahold Delhaize to rethink its US strategy?
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
