Business overview
Ahold's principal business is the operation of retail food
stores in the United States and Europe and foodservice
wholesale activities in the United States through
corporately owned business units, subsidiaries and
joint ventures.
Ahold's retail and foodservice operations in the United
States represented 74 percent of its consolidated net sales
in 2006. In addition to the Company's principal activities,
some subsidiaries finance, develop and manage store
sites and shopping centers primarily in support of its retail
operations. For a list of Ahold's significant subsidiaries,
see the information in Note 36 to the consolidated financial
statements included in this Annual Report.
On November 6, 2006, Ahold announced that it will divest
its foodservice operations in order to focus exclusively on
its core food retail businesses (in 2006 retail operations
accounted for 66 percent of the Company's consolidated
net sales).
Food retail business
In 2006 Ahold's food retail business was organized in arenas
that included two or more supermarket chains operating
under local brand names. As a result of the Company's 2006
strategic review, Ahold has reorganized its management
structure to support two continental platforms, Ahold USA
and Ahold Europe.
Ahold's retail sales consist of consumer sales, sales to
franchise stores and sales to associated stores.
Franchise stores typically operate under the same format
as, and are not distinguishable from, Ahold-operated stores.
Franchisees generally purchase merchandise from Ahold,
pay a franchise fee and receive support services that include
management training and field support as well as marketing
and administrative assistance. Operators of associated
stores purchase product and services from Ahold, but
operate as independent retailers with their own unique
store formats. The Company's retail business generally
experiences a seasonal increase in net sales in the fourth
quarter of each year, mainly due to the holiday season.
Stop Shop/Giant-Landover Arena
This arena, headquartered in Quincy, Massachusetts,
operates retail food stores and standalone pharmacies
and is comprised primarily of the following entities:
The Stop Shop Supermarket Company LLC ("Stop
Shop"), acquired in 1996, which has a market area
consisting of Massachusetts, Connecticut, Rhode Island,
New Jersey, New York and New Hampshire.
Giant of Maryland LLC ("Giant-Landover"), acquired in
1998, which has a market area consisting of Maryland,
Virginia, Delaware and the District of Columbia.
Peapod, LLC ("Peapod"), acquired in 2000-2001, which
provides an internet-based home shopping and grocery
delivery service as an integrated part of the Stop Shop/
Giant-Landover Arena, along with service to the
metropolitan areas of Chicago and Milwaukee.
Giant-Carlisle/Tops Arena
This arena, headquartered in Carlisle, Pennsylvania,
operates retail food stores and is comprised primarily
of the following entities:
Giant Food Stores, LLC ("Giant-Carlisle"), acquired
in 1981, which has a market area consisting of
Pennsylvania, Maryland, Virginia and West Virginia.
Tops Markets, LLC ("Tops"), acquired in 1991, which has
a market area consisting of northern New York, northern
Pennsylvania and, during 2006, Northeast Ohio.
Consistent with the refocusing of its portfolio, Ahold
announced in November 2006 plans to divest its stores
operating under the Tops retail banner. This is consistent
with selective Tops divestments and store closures in 2005
and 2006.
Ahold Annual Report 2006 37
