Industry Comment: Ahold-Delhaize merger

New York -- Dutch supermarket giant Ahold has agreed to buy Belgian rival Delhaize, creating the sixth largest food retailer in the United States. Keith Anderson, VP of strategy & insights for Profitero, and formerly a retail analyst with RetailNet Group, offers his thoughts on what led to the merger, and what it may bring.



The grocery industry is facing new and immense pressures. Increasing online price transparency and the rise of discount grocers are intensifying competition on price. Also, growth in e-commerce demands new capabilities; and shoppers' preferences (for organic, specialty or local vendors, for example) are evolving at a rapid pace.



The current wave of consolidation may bring operational efficiencies. But the key question is whether the combined entities will leverage their strengths to deliver a more relevant range, meaningful value and a better shopping experience.



Delhaize has experience operating a multi-format portfolio, and Ahold has a particularly strong capability in online grocery asa the operator of Peapod, the longest-running online grocery service. Along with other grocers, the new entity will need a compelling strategy and world class execution to thrive in a more dynamic competitive landscape.



It will be interesting to see how the complicated process of operational and organizational integration unfolds over the next 18-24 months.