Grootverbruik Ahold (Institutional Food Supply)
Sales of Grootverbruik Ahold (GVA) rose by 12.9% to Dfl 644 million. In the three
segments in which GVA operates - institutional, restaurant, and recreational activi
ties - its market share grew. The increase in sales reflects both acquisitions and,
especially, autonomous growth. Operating results improved considerably as compared
to the disappointing 1988 figures.
In 1989, GVA continued to refine its new organizational structure, consisting of four
major groups: Institutional, Restaurant/Catering, Fresh Food and Non-Food. The
organization is well designed to supply a comprehensive package of processed and fresh
foods, as well as a non-food assortment. A major step forward was the establishment of a
national network of regional fresh food centers. As a result, all companies operating
within GVA are able to deliver a full fresh food assortment in one drop, six days a week,
throughout The Netherlands.
In 1990, the new structure will be further refined, with particular attention to the
Fresh Food group. In addition, GVA will assume a more prominent position as a
supplier of non-food products.
Expectations are that in the nineties food consumption patterns will favor the 'away-
from-home' market. Dutch consumers will increasingly direct their food spending
towards suppliers outside the retail trade, for example restaurants, institutions and in-
company catering facilities: GVA's clients. If Ahold is to maintain its position in food,
tobacco and beverage retailing, it must strengthen its position in supplying the away-
from-home market. Thus GVA is of real strategic importance to Ahold. In The Nether
lands, GVA's strategy is to considerably expand its market share through autonomous
growth and acquisitions. In addition, there are opportunities for the GVA formula
outside The Netherlands, via cooperation with the European partners.
Grootverbruik Ahold is expected to realize increased sales and operating earnings.
Real estate companies
In 1989 new investments in real estate in The Netherlands amounted to about Dfl 78
million. A major portion of these investments derived from the real estate portfolio
acquired together with the Gall Gall liquor store chain.
At 1989 year end, total real estate assets amounted to Dfl 737 million, while Dfl 58
million worth of real estate projects were under way.
Operating results for 1989 amounted to Dfl 43.6 million (October 10, 1988, through
January 1, 1989: Dfl 9.1 million).
In the course of 1989 seven properties were sold. The capital gain resulting from
these transactions, net of taxes, amounted to Dfl 1.2 million.
In 1989, Ahold participated in establishing the ABS Development Company in the
United States, in which it has a 50% interest. ABS was formed primarily to acquire or
develop shopping centers where Ahold stores are major tenants. Thus, the expansion
goals of FNS, BI-LO and Giant can be supported.
Net earnings of the real estate activities in 1989 amounted to Dfl 16.5 million. In 1990
net earnings are expected to rise.
In 1989 Ahold establis
hed the real estate com
pany ABS Development
Company, together with
Richard Bogomolny,
Vice Chairman and Bob
Samuels, President and
CEO. 'ABS was formed
to acquire or to develop
supermarkets and shop
ping centers with a
supermarket as a
tenant. The supermar
kets are to be operated
by BI-LO, Giant or FNS.
The intent is to serve the
expansion needs of the
three chains in an eco
nomically attractive
manner/ Samuels states.
In fiscal 1989 ABS
acquired interests in
three projects in Con
necticut. Each will result
in a new Finast Super
store.
Early in 1990 ABS par
ticipated in construction
of a shopping center in
South Carolina housing
a BI-LO supermarket.
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