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Copyright © 2002 ACNielsen
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Mission
“...To be the world´s
best and most successful
food provider…”
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Copyright © 2002 ACNielsen
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Ahold Key Facts
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30 million customers every week
Sales approaching $65 USD billion
4,500 stores in 25 countries on 4
continents
350,000 associates
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Ahold
Key Banners
Facts
Ahold
Store
North America
Europe
Asia
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30 million customers every week
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Sales approaching $65 USD billion
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4,500 stores in 25 countries on 4 continents
350,000 associates
Central America
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South America
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Supermarkets
Hypermarkets
Convenience stores
Specialty stores
Food service
E-commerce
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Strategy
• Multi-Channel Food Provider
• Global Network of Regional
Market Leaders
• Industry Leadership
• Profitable Growth
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Multi-Channel Food
Provider
• Retail
– Continued investment
– Improving margins
• Foodservice
– U.S. Foodservice, PYA / Monarch
– Abundant synergies
• E-Commerce
– Peapod, Inc.
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THE EMERGING
RETAIL LANDSCAPE
WINNERS & LOSERS
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U.S. Retailing: competition
from several channels…
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Research Design
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Date Source: 61,500 member ACNielsen
Homescan Consumer Panel
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Primary Channels
- Grocery (excluding Supercenters)
- Mass Merchandiser (excluding Supercenters)
- Supercenters*
- Drugstores
- Warehouse Clubs
- Dollar Stores
- Convenience/Gas
* Includes Kmart, Target & Wal-Mart Supercenters
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Warehouse Clubs,
Supercenters, Dollar Stores &
Convenience/Gas continue expansion
ACNielsen Universe Estimates
Warehouse
Supercenters
661
904
148
1,212
Dollar Stores*
3,652
9,133
Mass Merch
6,399
5,636
Drug
Conv/Gas
1993
2001
49,437
39,553
78,824
82,811
144,866
143,571
Grocery
•Family Dollar & Dollar General
# of stores
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More large Supermarkets
ACNielsen Universe Estimates
Independent
Grocery <
$2mm
114,581
111,352
28,621
29,783
Supermarkets
$2mm+
Supermarket &
Drug Combos $2mm+
1993
2001
1,664
2,436
# of stores
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Petro outlets offset declines in
Convenience chains
ACNielsen Universe Estimates
51,832
Petro Outlets
65,302
Convenience
Chains
26,992
1993
2001
17,779
# of stores
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Grocery & Mass losing trips
Household Shopping Frequency
Dollar
Warehouse
9
10
10
11
Conv/Gas
13
13
14
15
Drug
15
15
15
15
Supercenters*
Mass Merch
Impacted by
pace of life,
competition from
restaurants, &
other retail
channels too!
9
9
10
10
14
15
17
18
'98
'99
'00
'01
28
26
25
23
Grocery
78
75
85
83
Trips per Household
* Includes Kmart, Target & Wal-Mart Supercenters
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Key Industry Trends
Channel Grazing
Increased competition for Rx sales
Gasoline retailing
Frequent shopper program
Demand for convenience
Niche retailing
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A new concept: Channel Grazing
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Clear evidence that consumers take
advantage of their channel options
- But how many retailers or retail channels do
consumers include in their shopping mix?
- Any differences in shopping behavior among light
versus heavy grazing households?
- Does grazing differ by household composition?
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A new concept: Channel Grazing
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Over 900 national, regional, & local
retailers & retail channels monitored via
Homescan panel
- Households who shopped in “1” to “n” retailers
were placed into three groups to define:
Heavy grazers: shopped in over 28
retailers/retail channel per year
Medium grazers: shopped in 19-27
retailers/retail channel per year
Light grazers: shopped in 18 or fewer
retailers/retail channel per year
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Channel Grazers drive retail sales
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Light Grazers
% Households
% Dollars
Medium
Grazers
Heavy Grazers
% of Households shopping in:
Total U.S. - 52-wks ending 12/29/01 – All Outlets
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Channel “grazing” prevalent
in more populated counties
39
20
29
35
74%
More grazers
where there is
more variety
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35
35
35
26
30
36
"A" Large
Metro
Counties
"B" Fringe
Metro
Counties
"C" Small
Urban
Counties
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Heavy Grazers
Medium Grazers
Light Grazers
"D" Rural
Counties
% of Households shopping in:
Total U.S. - 52-wks ending 12/29/01 – All Outlets
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Channel “grazing” prevalent among
couples & families w/older children
Mid Aged Singles
38
36
26
Young Singles
34
38
28
New Families
32
35
33
Empty Nesters
27
36
37
Established Families
30
32
38
Maturing Families
29
33
38
Mid Aged Childless Couples
26
35
39
Childless Younger Couples
28
29
43
Light Grazers
Medium Grazers
Heavy Grazers
% of Households shopping in:
Total U.S. - 52-wks ending 12/29/01 – All Outlets
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Except for Convenience/Gas, females
dominate channel shopping trips
Share of channel trips
64
74
71
67
Females
47
63
78
36
26
29
33
Males
53
37
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As males
age, they
handle
increased
share of
trips
Grocery
Mass
Supers
Drug
Conv/Gas
WHC
Dollar
Total U.S. - 52 wks ending 12/29/01
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Higher basket values for
Female shoppers
Conv/Gas
$9.49
$11.38
Dollar Store
$8.76
$11.38
Drug
Grocery
Mass
$17.39
$20.37
$26.39
$35.82
Males
Females
$32.88
$40.84
$78.66
$84.27
Warehouse/Club
Average $ Basket Size
Total U.S. - 52 wks ending 12/29/01
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Increased Rx competition –
did you know?
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Rx sales rose 18% to $208 billion in 2001
- Doubling sales from 5 years ago
- Mass sales grew 23% to $8 billion
- Supermarket sales grew 16% to $18 billion
- Mail order Rx sales will surpass sales in
Independent Drug Stores in 2002
Source: Drug Store News
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Gasoline retailing – did you know?
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Share of gasoline sales from high-volume
retailers is expected to grow from 5% to
between 15% & 20% within four years
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“Costco testified at a recent public
hearing…locations with gasoline have a
customer-repeat frequency of four times
per month. Locations without gasoline
have a repeat frequency of one time per
month.”
Source: NACS
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78% of U.S. households participate in a
Grocery Frequent Shopper Program
But, 63% are in multiple programs!
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70
78
74
55
35
1996
1997
1998
1999
2000
2001
% of U.S households w/Grocery frequent shopper card
Source: ACNielsen Homescan surveys
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Competition for Convenience
Dual working households, less
time for preparation
Improved shelf life, refrigerated,
convenient products..
“Consumers told us
that if it's not easy, it's
not eaten.”
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“Convenience Still Competes”
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Old Fort Travel Plaza in Ft. Wayne, Indiana
added delivery of just about anything
(detergent, cigarettes, milk, etc.) along
with their normal pizza deliveries
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This was driven by:
- increased competition from Kroger & Wal-Mart for
gasoline sales
 “You cannot compete with them on price. They can sell
gas at 25 cents a gallon and make it up selling
lawnmowers.”
 Store owner expects to add another 25% on top of their
normal pizza sales & drive other foodservice sales
Source: NACS Magazine – March 2002
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Niche Retailing
Wild Oats “is the 2nd largest natural supermarket
chain in North America, with more than 100 stores”
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Whole Foods “is the largest retailer of
natural and organic foods, with 128 stores”
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EatZi is a bakery, a market & a restaurant
with catering services for all occasions
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Summary
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Consumers take advantage of channel
options
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Grocery channel shopping frequency
continues decline; Mass declining too
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Dollar Stores & Supercenters posting
strong penetration gains
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Heavy category buyers purchase in
multiple channels; Heavy “grazers” drive
retail sales
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Summary
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The demographics & shopping behavior of
channel shoppers varies by channel
- Successful Retailers will use this knowledge to
target growth via advertising, merchandising
and promotional activities
- Successful Manufacturers will help Retailers
and themselves with channel-specific targeting
of products and promotions
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Summary
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Retailers
- Alternative channel retailers are coming
after your shoppers & their shopping trips
invest dollars to re-invent yourselves!
- Focus efforts against core/heavy shoppers
expand products & services to capture greater
share of spending
frequent shopper programs need to be more than
just another deal
- Initiate efforts to increase loyalty among
“key” occasional or light shoppers
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Offerings that progressive retailers are
using to re-invent themselves
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Drive-thru & Drive-up
Indoor food courts
Outdoor cafes
On-site gasoline pumps
Book sections w/seating
Leveraging food
categories to drive
frequency & ring
On-line ordering & home
delivery
Self check-out counters
In/Out specialty items
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Enhanced wine sections
Floral departments
On-site banking & other
financial services
Health Food & Health
Care sections
Cooking classes
“Department Store”
cosmetic counters
Child care facilities
Good tasting & variety
of prepared foods
Photo Processing
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Summary
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Manufacturers
- Capitalize on the channel shopping diversity
of heavy category buyers through expanded
distribution
if you don’t a competitor will!
- Expand through tailored product offerings,
not through increased distribution of
existing offerings
match product offerings w/channel demographics
and/or channel shopping behavior
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