1
€30.3
€1.3
4.8%
€0.40
Message from our CEO
Net sales
billion
billion
per common share
Ahold
Annual Report 2011
Group at a glance
Performance
Governance
Financials
Investors
Dick Boer
Chief Executive Officer
Watch the CEO online:
www.2011 yearreview.ahold.com
Operating income
Underlying retail
operating margin
Proposed dividend
Dear shareholder,
2011 was another successful year for Ahold. We again achieved a solid performance in Europe
and the United States, and grew sales and income under challenging economic circumstances.
Our positive results were thanks to the hard work of our people in all our stores, distribution
centers, and offices, who remained committed to putting the customer first every day. We
increased sales by 5.5 percent at constant exchange rates to more than 30 billion euros and we
grew net income by 19 percent to over one billion euros. This was despite the fact that customers
remained cautious in their spending and focused on value in an environment of increasing
inflation and intense promotional activity. We also continued to expand our operations in our
existing and new markets on both continents, including opening stores for the first time in Belgium
- the second of which happened to be our 3,000th store Ahold-wide.
Another key achievement in 2011 was the launch of our new strategy to reshape retail across
Ahold. Our Corporate Executive Board, made up of myself, Jeff Carr, James McCann, and
Lodewijk Hijmans van den Bergh, and our Chief Operating Officers from Europe and the United
States, Sander van der Laan and Carl Schlicker, worked together as the Ahold Strategy Team
to develop one global strategy to build on our success and grow the company. During the year,
we engaged our key leadership to explain the strategy in detail so that they could begin to bring
it to life.
Building on the foundation of our successful local brands, our new strategy is designed to take
advantage of the rapid changes in customer behavior, shopping trends and the retail landscape -
particularly the impact of technology, which has put the customer firmly in the driver's seat. The
strategy has six focus areas or pillars - the first three designed to create growth and the second
three to enable this growth. They are: increasing customer loyalty, broadening our offering,
expanding our geographic reach, simplicity, responsible retailing, and people performance.
We are making good progress in all of these areas.
Our first pillar is increasing customer loyalty and driving identical sales growth. We have new
customer loyalty initiatives that we believe will add one to two percent to identical sales growth,
and we are developing technologies that will ensure all our customers have a seamlessly
connected online and offline shopping experience. For example, in the United States, we
implemented new direct mail and email programs targeted to the individual buying behavior of
2.5 million shoppers. We are now in the process of personalizing customer offers in the same
way at Albert Heijn.
Our second pillar is broadening our offering by developing and rolling out our successful store
formats, expanding our online business, building an even better, more relevant assortment, and
increasing our own-brand sales penetration. In 2011, we introduced a new, smaller format
supermarket in the United States and, at Stop Shop New England, opened a new concept
supermarket in Chelmsford, Massachusetts. In Europe, Albert, in the Czech Republic, launched
a new compact hypermarket format and "Albert Heijn to go" developed a new convenience
concept, which we will begin rolling out in the Netherlands and Germany in 2012.
Our online businesses are already the number one online food retailers in the United States and
in the Netherlands. During the year our online grocer, Peapod, in the United States expanded into
Philadelphia and the surrounding counties, to serve Giant Carlisle customers for the first time, and
moved further into Manhattan. We also launched new smartphone apps enabling people to
access their loyalty card accounts and store circulars online and tally and pay for their groceries
while they shop. In the Netherlands, Albert Heijn continued to develop its Appie smartphone
application, which was named best app of its type in the country.
We also further strengthened our own-brand offering. At Ahold USA, we made progress in
moving towards our goal to achieve 40 percent own-brand sales penetration by building an own-
brand support organization to serve all four divisions, adding new products, and rolling out new
packaging to unify the brands across each of the divisions. In the Netherlands, Gall Gall
launched a new own-brand line of products - the first liquor store chain in the country to do so.
