- Ahold Delhaize last week announced executive appointments to each of its retail brands, part of an effort to decentralize its structure and allow retail banners to operate according to their market needs, according to Supermarket News.
- The new hires — more than 80 in all — as well as their banners will share services and strategic resources provided by Ahold Delhaize's Retail Business Services.
- Ahold Delhaize's expects its "brand-centric" restructuring to be completed by 2018.
As it looks for growth in an increasingly competitive industry, Ahold Delhaize has decided that the best way forward for its conventional grocery brands is to execute locally while drawing upon chain-wide resources. This strategy, unveiled last year under the name “Better Together,” is an interesting model for utilizing scale in an era of increasing industry consolidation.
In announcing its new executive hires, the company emphasized that its decentralized structure would allow management to develop the marketing and merchandising strategies that best fit each store's target audience. At the same time, Ahold Delhaize wants to leverage efficiencies and deploy resources across the entire organization. Distribution, purchasing, and innovation are just a few areas that can benefit from a collective focus, with the company’s Retail Business Solutions service acting as a hub for strategy and development.
At the store level, a more localized approach makes a lot of sense. Ahold Delhaize’s retail brands know their shoppers best, and will be better equipped to tailor their stores to suit their needs. Overall, shoppers are looking for a more personalized retail experience, full of the local products, promotions and other quirks that can make the experience enjoyable. Also, in a competitive environment, stores need to be able to react quickly, whether it’s in pricing, marketing, or scaling up innovation.
Still, questions remain. Are Ahold Delhaize’s banners providing the right localized experiences for its shoppers? How autonomous are individual stores? And how is the company ensuring proper training of managers and staff members to make those crucial decisions at the local level? One of the big risks with a decentralized structure is that key moves are now the responsibility of many instead of a select few. Certainly, enhanced data can help guide retailers' decision making, but ultimately it's the employees that interpret the findings and make those decisions.