QUINCY, MA - The retail sector is like the tides—always ebbing and flowing. In this metaphor, competition would be the moon, the gravitational pull causing the tides to move and change. This week, Ahold Delhaize USA is one of many retailers responding to that metaphorical lunar force with a strategy that will pivot its focus and streamline its operations. This strategy will concentrate the grocer’s efforts to the East Coast market and also close the Midwest division of Peapod.
“This was a difficult decision given Peapod’s rich history in the Midwest,” said Kevin Holt, CEO, Ahold Delhaize USA. “We know changes such as these are never easy for consumers and communities. We appreciate the loyalty of associates and customers in the Midwest sales business over the past three decades. We have been and will continue to leverage the learnings from our 30-year legacy of online grocery to enable each of the brands to grow its omnichannel business on the East Coast.”
According to a press release, this decision will enable Ahold Delhaize to focus on expanding the leadership position of its brands on the East Coast and execute its strategy of enabling each local brand to be the leading omnichannel grocery retailer in each of their markets.
“As we’ve previously shared, to continue our strong track record of sales growth and market share gains, we are accelerating our growth and expanding the leadership positions of our businesses in our East Coast markets,” added Holt. “This move will enable us to fully focus on markets where we have strong store density, leading market share, and a longstanding heritage of customer loyalty.”
As part of this strategy, Peapod Digital Labs will remain focused on enabling Ahold Delhaize’s local brands deliver leading omnichannel experiences for shoppers. The brand will also deploy a new proprietary e-commerce platform for the local brands of Ahold Delhaize USA.
“Chicago will remain the headquarters for our Peapod Digital Labs team, and we will continue to draw from the valuable pool of digital and e-commerce talent in the market,” said JJ Fleeman, President, Peapod Digital Labs and Chief E-Commerce Officer. “Through Peapod Digital Labs, we will continue to build upon Peapod’s technology legacy. Peapod began here, and we will remain here, in the heart of Chicago. We look forward to honoring and leveraging Peapod’s longstanding legacy of expertise in online grocery and fully focusing our team’s energy and talent on supporting the growth of each of the East Coast brands.”
Effective February 18, 2020, the Midwest closure will affect 500 associates and distribution centers, food preparation facilities, and a pick-up point across the Chicago, Indianapolis, and Milwaukee markets. These associates will be eligible to apply for other roles within Ahold Delhaize USA.
Peapod currently comprises of $97 million in revenue of the $1.1 billion in total online revenue in the U.S., according to the press release.
How will Ahold Delhaize's concentrated focus on the East Coast market change supplier partnerships for the better? As a similar metaphorical tide to that of the grocery retail sector (with you, dear reader, being our moon), AndNowUKnow will continue to bring you the freshest produce industry news.
