with a Group-wide
business model that
drives our strategy.
0
Our business model
Our successful company-wide business model is at the heart
of our strategy. The model is a virtuous circle in which we
continuously work to lower our cost base in order to invest in
price, value, and the products and services we offer. This
allows us to drive sales, win new customers, and allocate
capital to further grow our business.
Ahold Annual Report 2012 I
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glance
Our strategy
Our performance
Governan
Financials
Investors
Lower cost base
We continually work to lower our cost base and
operate in the simplest, most efficient and cost-
competitive way. Through the simplicity pillar of our
strategy we continue to leverage our capabilities
and resources as an international company and
work on better, more aligned processes and
systems. In 2012, we expanded our company-wide
simplicity program beyond operational areas and
overhead management to additional areas such as
maximizing the efficiency of our commercial spend
and improving our sourcing, including own brands.
At the end of 2012, we announced an increase to
our existing cost savings program from €350 million
to €600 million for 2012-2014, to fuel further
investments in creating a better offering and value
for customers.
Build strong consumer brands
Our business is built on strong, local consumer
brands. We reinvest our cost savings into our
offering, to give customers more of what they want
and increase loyalty to our brands. We monitor our
price positioning regularly in order to maintain the
right value proposition. We use our best-in-class
consumer insights capabilities to continually adjust
our offering and provide the best shopping
experience. We are also broadening our offering
and working to give our customers more ways
to shop with us, by developing our formats and
growing our online business. We are making our
assortment more relevant and our promotions more
personal and targeted to individual customers.
Providing our customers with more of what they
want helps us drive identical sales.
Drive identical sales growth
The investments we have made to build our strong
consumer brands have enabled us to drive identical
sales growth, increase volumes and to gain market
share, in many cases outperforming our peers in the
food category in both Europe and the United States
Allocate capital to new growth
The capital we generate is used to drive new
growth, to get the right returns and invest in the
business for the long term. We are investing in new
products and services based on our customers'
changing needs. This includes developing our
formats, expanding our online business, and
introducing new and innovative own-brand
products. We are also expanding our geographic
reach by investing in new stores in our current,
adjacent and new markets. Our aim is to allocate
3-3.5% of sales to capital expenditure to maintain and
grow our network of attractive stores and successful
online businesses. All of these things enable us to drive
sales growth and grew market share.
