Ahold Delhaize Banners Are ‘Better Together’
P2PX Keynote Address
- Thursday, Oct. 4, 9 a.m.
- Whitney Hardy, SVP & CMO, Stop & Shop
- John MacDonald, VP & CMO, Giant Food
Giant, Stop & Shop executives explain how a big retailer brings its power to local chains
Ahold Delhaize is one of the largest retailers on the East Coast of the U.S., but it is split between six banners each with its own identity, history and distinct customer base. Since the company formed from the 2016 merger of Royal Ahold and Delhaize Group, it has worked to balance the power of being a big operator with the need to appeal to diverse markets through a “Better Together” strategy.
“The great thing about Ahold Delhaize is the banners are strong in their local markets,” says John MacDonald, vice president and chief marketing officer of Giant Food. “They’ve always been strong. As we decentralize some of these key functions, it’s all about strengthening the localness, addressing the needs of the market and addressing the needs of the consumers.”
MacDonald and Whitney Hardy, senior VP and chief marketing officer of Stop & Shop, will deliver a Path to Purchase Expo keynote presentation on the “Better Together” strategy on Oct. 4 in Minneapolis.
“There’s an advantage to the way that we have been put together today,” MacDonald says. “The structure of the organization allows us to really take advantage of the size and scope of what Ahold Delhaize on the East Coast can do.”
Giant Food and Stop & Shop have been operating for 83 and 104 years, respectively, but both are working hard to stay ahead of shopping trends. Stop & Shop works with Boston-based C Space to create an “empathy engine,” gathering a group of 200 consumers that represent the banner’s disparate markets to survey them on their attitudes about food, media consumption and pre-purchase research.
“We use them as a sounding board but also as an insights curation lab,” says Hardy. “We’re using it to refine our business strategy and brand strategy, but also from a marketing and communication standpoint to make sure we’re nailing our message.”
MacDonald says Giant set out to do something similar after observing Stop & Shop’s successes. Understanding shoppers is an especially big challenge for Giant, which covers Washington, D.C., where about 16-20% of the market turns over every four to five years as governments come and go. MacDonald learned the importance of tailoring messaging when he was working as director of marketing for Giant/Martin’s.
“We made a mistake one year during New Year’s,” he says. “In Central Pennsylvania, pork and sauerkraut is a big deal, but in Richmond, Virginia, it’s collard greens and black-eyed peas. When you advertise pork and sauerkraut to a group that it’s not relevant to, you lose the credibility of being local.”
Ahold Delhaize caters to those varying regional tastes by customizing its assortment and uses marketing materials to tell stories about the local vendors, farmers and suppliers it works with.
“Local as part of our mix is increasing substantially because we know it’s important to reflect the communities we serve in the products that we carry,” Hardy says.
When a product has near universal appeal, the brands will team up. Last fall, Ahold Delhaize worked with General Mills to run a launch campaign for chocolate peanut butter Cheerios at all six banners simultaneously while focusing on making sure the SKUs stayed in stock. The retailer was the highest seller of the new flavor in the U.S. and its market share remains high.
That success has led the retailer to look for more programs with wide appeal that can run across banners. Giant and Stop & Shop are also more closely integrated than ever with Ahold Delhaize’s grocery delivery service Peapod.
“We punch above our class when it comes to the ability to keep up digitally and from a technology standpoint,” Hardy says. “Our walls are down between the brands.”