The impact on retailers of the COVID-19 pandemic has varied considerably, even among sellers of essential products. Ahold Delhaize is one of the companies that, in the words of president and chief executive officer Frans Muller, has managed to “translate this unprecedented demand … into outstanding results.”
Speaking after the release of Ahold Delhaize’s second quarter earnings, he credited the “engagement and strong execution of our teams” for the retailer’s performance. During the 12 weeks, the company posted a 15.9% sales gain, at constant exchange rates, to 19.1 billion euros; comparable-store sales growth of 20.6% in the U.S. and 10.2% in Europe; a 77.6% increase in e-commerce business, and a 78% rise in operating income to just over 1 billion euros. All that despite chalking up 260 million euros in pandemic-related costs.
While commenting on the results, Muller might also have cited management’s perspicacity in crafting a strategy built around strong local brands, a range of omnichannel capabilities, and ongoing community engagement. Those assets positioned Ahold Delhaize to respond to sudden shifts in consumer behavior when COVID-19 took hold.
Many consumers turned to the company as a reliable source of information during the early days of the pandemic. “We carefully adhere to all government regulations and instructions,” says Muller, “but this is not always easy as both in the U.S. and in Europe, we had very mixed messaging from all kinds of authorities — whether it was city, state or national government — very different messaging.”
At the same time Ahold Delhaize helped customers understand the virus — a service of particular importance to people with such preexisting conditions as obesity, diabetes or hypertension — it also implemented measures related to hygiene and social distancing to keep shoppers and associates safe in stores and other facilities. Ahold Delhaize was, for example, the first retailer to establish special hours when stores were open only to senior citizens.
Taken together, those measures went a long way toward augmenting the confidence consumers have in Ahold Delhaize.
“People will have more and more trust in good brands,” Muller says. “Trusted retail brands will have more support going forward, because people can say, ‘I know how you prepare meals, I know the high level of hygiene you maintain in your butchery and deli departments, I know how you clean pay pads at the checkout.”
In the next issue of MMR, this space will be devoted to how Ahold Delhaize intends to leverage that trust.