RetailAnalysis
01 March 2017
Ahold Delhaize US: bfresh, Food Lion & private label

As Ahold Delhaize launched its third bfresh store in Sommerville, Massachusetts on Friday, we explore the three key ways it is adapting the format for success. We also report on the next phase of Food Lion’s refurbishment programme and its new citrus-themed private label range.

Bfresh: value, convenience & efficiency

The new bfresh store offers more private label products, alongside fewer specialty items. As part of the review process, the retailer reviewed sales performance from its existing stores in Allston and Brighton, Massachusetts. Commenting on the launch, marketing, format and store development lead Saskia de Jongh said, ‘One of the major changes that we introduced for this store in Somerville is that we introduced entry-price-point brands … We learned that our customers are looking for that entry price point, and looking for more value, both in regular brands and in organic’.

The store offers a broader selection of 'meal kits', which offer ingredients to create a meal in 30 minutes. De Jongh continued, ‘We still really like the concept of cooking from fresh, healthy ingredients, and that hasn’t changed … However, what we also learned is that our customers were not always willing to wait. They want to have a couple of options — sometimes they want to have something they can eat right away, but we learned that our customer also really likes to cook, especially healthy cooking’.

The new store will also prepare food for the other bfresh sites daily as it is 1,000 square feet larger than the Allston store.

IGD visited the first bfresh smaller store format to launch, where we were impressed with the blurring of grocery retail and food service. Read more about this here.

...New appointment for Fresh Formats LLC/bfresh

Dean Wilkinson has been appointed by Stop & Shop to lead the retailer's Fresh Formats LLC/bfresh team. Prior to this, Wilkinson worked in a variety of retail roles, including customer service director at Stop & Shop and regional VP at Giant Landover. He has also held as well as a series of positions across sales, merchandising and marketing functions. More recently, he joined Ahold USA as SVP for store strategy and execution.

Commenting on the appointment, Stop & Shop President Mark McGowan said, 'Dean brings years of retail operational experience, and he will be a valuable resource as we develop new and innovative format opportunities. We are proud of the excellent work of the Fresh Formats team, as they just brought the third bfresh store to life in Somerville, Massachusetts'.

Wilkinson is succeeded on an interim basis by Glenn Hogan, VP of regional operations for the Stop & Shop New England division.

Next phase of Food Lion refurbishment begins…

Elsewhere, Ahold Delhaize is also investing $178m in 93 of its Food Lion stores in Greensboro, North Carolina. The investment will focus on refurbishment, price, colleagues and the community. From a refurbishment perspective, stores will offer improved navigation, as well as a wider variety of local, natural and organic products, as well as healthier snacking options.

Greensboro is the fifth area in North Carolina where Food Lion is refurbishing stores as part of the Easy, Fresh and Affordable strategy, with the retailer having already refurbished a number of stores elsewhere. Results have been encouraging, with store refurbishments in Wilmington, Greenville and Raleigh enjoying growth of 10%, 3% and 8% respectively. Over 50% of Food Lion stores are expected to be refurbished by the end 0f 2017.

Commenting on the development, Food Lion President Meg Ham said, ‘We want to ensure our customers can easily find fresh, quality products to nourish their families at affordable pries every day, delivered with caring, friendly service every time they shop’.

This announcement on the next phase of Food Lion stores to be refurbished comes as Lidl prepares to launch eight stores in the Triad area of North Carolina.

…As Food Lion launches new citrus-themed private label range

In other news, to celebrate the start of spring, Food Lion has launched a new range of citrus-themed private label products, available until March 21st. Products are available across a range of categories, including snacking products, sparkling water, tea and desserts.

Image source: Progressive Grocer

Other seasonally inspired private label ranges have also launched elsewhere in recent years, including Target's Archer Farms pumpkin-themed autumnal range. Such activity can be seen as an innovative way to drive excitement for shoppers and can provide differentiation in private label versus competitors.

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