'Ahold strengthened its network
on the continentoffering the
customer superior service'
Latin America
Disco
In May 1999, Disco acquired the
Supamer chain, which operates 46
Americanos supermarkets, 25 Mini-Sol
convenience stores and a brand new
distribution center in the province of
Cordoba. Later that month, it acquired
11 Gonzalez supermarkets in the
province of San Juan and in October
a further eight Pinocho stores in and
around the city of La Plata. All chains
are being integrated into Disco. The Fritz
Ahlqvist Distribution Center on the out
skirts of Buenos Aires was completed
in October. It was named after the Ahold
board member who was instrumental
in putting Ahold on the map in Latin
America. This state-of-the-art distribution
center marked the first step in the imple
mentation of a new centralized logistics
and distribution system for Argentine
operations and brought an end to the
practice of direct deliveries from suppliers
to individual stores. Considerable effi
ciency improvements and cost savings
resulted as well as improved customer
service and quality assurance. In 1999,
the groundwork was laid for a central
meat processing plant and bakery unit
at the DC, continuing the trend towards
centralization. A third distribution center
in the province of Mendoza was opened
in November. Early 2000, Disco acquired
10 Ekono supermarkets in Buenos Aires
with a wide assortment of groceries and
fresh products plus a variety of non-food
items.
Chile, Peru, Paraguay and Ecuador
Disco Ahold International Holdings has
a 69% stake in the Santa Isabel super
market chain with sales of Euro 679
million and 95 stores in Chile, Peru,
Paraguay and Ecuador. The 62 Santa
Isabel stores in Chile are particularly
well located and are renowned for their
customer service. Ongoing professional-
ization of store operations and a broad
range of competitively priced fresh foods
resulted in growing customer appreciation.
A major remodeling program has improved
store appearance and significantly
impacted on the general image of the
chain. Regional headquarters were trans
ferred from Valparaiso to Santiago, the
Chilean capital, where a new distribution
center will be opened during the first half
of 2000. The groundwork was laid for the
second phase of the remodeling program
which will feature extensive format
redesign including a new logo. The joint
venture also operates 24 Santa Isabel
supermarkets in Peru where it acquired
four Top company stores in 1999.
Remodeling of these stores to the Santa
Isabel store brand was underway as the
year came to an end. Logistics and
distribution have improved with the
new cross-docking activities. Santa
Isabel operated seven supermarkets in
Paraguay, where a growing improvement
in retail presentation is visible, and two
stores in Ecuador.
Guatemala, El Salvador and Honduras
In December 1999, Ahold announced a
new joint venture in Central America with
La Fragua, the leading food retailer in
Guatemala, which also has operations in
El Salvador and Honduras. Privately-held
La Fragua owns 119 stores with sales
of approximately Euro 530 million.
Of these, 26 are supermarkets, four are
hypermarkets, 83 are discount stores
and six are other formats. La Fragua
gains access to Ahold's international
experience and network, economies of
scale and financial backing. The joint
venture offers Ahold excellent opportuni
ties for regional development and brings
Ahold's annualized sales in Latin
America to approximately Euro 4 billion.
Latin America Support Center
The Latin America Support Center is
based in Buenos Aires and facilitates
the flow of information, the transfer of
knowledge and the exchange of best
practices among Ahold's various joint
ventures in the region. In addition,
retail specialists from Ahold's US and
European companies work alongside their
counterparts at Bomprego, Disco and
Santa Isabel to facilitate merchandising,
logistics and distribution programs.
30 Royal Ahold Annual Report 1999
