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Ahold Delhaize to revamp its U.S. supply chain

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Retailer will invest $480 million on move to self-distribution

ZAANDAM, the Netherlands — Ahold Delhaize USA said Tuesday that it plans to spend $480 million to move to a self-distribution model.

The investment will support the acquisition of three distribution facilities from C&S Wholesale Grocers, as well as leases on two additional facilities, according to the company. Ahold Delhaize USA also plans to build two new fully automated facilities for frozen, one of which will serve stores in the Northeast region, while the other will serve stores in the Mid-Atlantic region.

The company says the new self-distribution supply chain will enable its U.S. businesses to reduce costs, improve speed to shelf, enhance relationships with vendors, and improve product availability and freshness for customers.

“Today’s announcement is another example of how Ahold Delhaize USA is transforming our infrastructure to support the next generation of grocery retail,” Ahold Delhaize USA chief executive officer Kevin Holt said in a statement. “Through this initiative, we will modernize our supply chain distribution, transportation and procurement through a fully-integrated, self-distribution model, that will be managed by our companies directly and locally. This will result in efficiencies and most importantly product availability and freshness for customers of our local brands, now and in the future, whenever, wherever however they choose to shop.”

Ahold Delhaize USA’s current distribution networks include 15 traditional and ecommerce distribution centers, which such local brands as Food Lion, Giant Food, GIANT/MARTIN’S, Hannaford, Peapod and Stop & Shop. The plan calls for that network will grow to 22 facilities by 2023. Ahold Delhaize USA will continue to work with C&S Wholesale Grocers during the transition, and beyond.

“Moving to a self-managed supply chain will enable Retail Business Services to reduce costs for the local brands it serves, improve speed to shelf, deepen relationships with vendors and better position our companies’ distribution centers in the communities they serve,” said Chris Lewis, who serves as executive vice president of supply chain for Ahold Delhaize USA’s Retail Business Services unit. “These changes will enable us to take advantage of financial and strategic value within procurement, logistics and warehousing to provide the freshest product through the most advanced, efficient delivery network in the grocery industry. We will continue to partner with key providers for distribution center management services, including third party labor services, such as our longstanding partner C&S.”

This enhanced distribution network will provide coverage for Ahold Delhaize USA’s local brands from Maine to Georgia. It is also projected to yield an ongoing annual benefit of more than $100 million to underlying operating income, according to the company.

 

 

 

 

 


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