'Format differentiation and margin
management drive performance in
The Netherlands'
Feira Nova
Pingo Doce
It reinforced its position as a major
supplier for the healthcare sector and
catering companies and boosted its
presence in the hospitality sector, primarily
hotels and restaurants. With joint sales
of Euro 726 million, Deli XL is a leading
player in the Dutch food service sector
serving 30,000 customers from two cen
tral offices, each with its own distribution
center, seven regional fresh centers and
18 strategically located distribution
points targeting the hospitality sector.
The assortment of 35,000 articles ranges
from fresh (including fruit, vegetables,
meat, fish and poultry) to dry groceries,
frozen foods and beverages, and is
complemented by a wide selection of
non-food items. The company benefited
considerably from synergies in assort
ment, procurement, logistics and ICT.
The percentage of orders received
electronically was further increased in
the course of the year to over 25% of
sales.
Portugal
In Portugal, Ahold's joint venture with
Jerónimo Martins Retail (JMR) saw sales
rise 12% to Euro 1.3 billion through
163 Pingo Doce supermarkets and 21
Feira Nova hypermarkets. The Pingo
Doce supermarkets boosted sales by 6%
to Euro 743 million, building on their
reputation as the household provider of
attractively-priced food items including
their specialty, ocean fish. The enlarged
perishables department was key to deliv
ering on the chain's promise to 'focus on
fresh'. The private label line was expanded
and delivered significant benefits. The
Feira Nova hypermarkets again had an
excellent year, boosting sales 19% to
Euro 551 million as the chain estab
lished itself as a major source of house
hold supplies. At the end of 1999, Ahold
and Jerónimo Martins began discussions
aimed at significantly extending and
enlarging their current joint venture oper
ations. It is the intention to establish a
new 50/50 joint venture that includes
the current operations of JMR in Portugal
- the Pingo Doce supermarkets, the Feira
Nova hypermarkets - and JMR's interest
in Madeira. Also included in the new
joint venture are Jerónimo Martins' food
service operations known as Recheio in
Portugal and Madeira, its Polish opera
tions and its supermarkets in Brazil as
well as Ahold's operations in the Czech
Republic, Poland and Spain. The new
joint venture will have access to Ahold's
European Competence Center and to the
global network designed to extract the
maximum benefits from economies of
scale, particularly through the exchange
of best practices.
Spain
Spain is considered a key European
market with significant growth potential.
Ahold's strategy is to expand rapidly
through autonomous growth and the
acquisition of regional supermarket
companies to join its network of wholly-
owned operations serving a growing
customer base. Sales were Euro 351
million. Rapid consolidation in Spanish
food retailing is causing family businesses
Deli XL
Cobreros
Royal Ahold Annual Report 1999
25
