Ahold CFO Aims to Make Online Sales a Larger Part of Its Revenues

Still, this represents roughly only 4.3% of the company’s U.S. sales, which totaled €45.47 billion last year, up 15.6% compared with the prior-year period. Chief Financial Officer Natalie Knight is working to increase online sales further, she said.

“We doubled our investments in omnichannel in 2020, and we will do that again in 2021,” Ms. Knight said, declining to provide a dollar amount for these investments. Overall, Ahold spent €2.6 billion on capital expenditures in 2020, slightly higher than the €2.5 billion it originally forecast. The company intends to allocate about €2.2 billion on capital expenditures in 2021.

Ms. Knight is pulling a range of levers to boost Ahold’s e-commerce sales. The company is expanding its click and collect business to cover 1,400 locations in the U.S. by the end of the year, up from 1,116 at the end of 2020. It recently launched a subscription service at its Giant Company business, on top of other existing subscription services.

Ahold also wants to learn from FreshDirect, in which it became the majority stakeholder after its deal to acquire an 80% share in the online grocer closed in January. Private-equity firm Centerbridge Partners LP holds the remaining 20%. “FreshDirect is faster with local supplies,” Ms. Knight said. “They are further advanced in their thinking about customer retention rates.”

There could also be synergies in areas such as procurement and information technology between FreshDirect and Ahold, Ms. Knight said. She declined to provide an estimate of how much these synergies could be worth. The company has publicly stated that it expects annual synergies of €100 million by 2023 from its ownership of a larger segment of the U.S. distribution network.

Ahold also continues to experiment with different fulfillment solutions for online orders, following the example set by Walmart Inc. and other retailers. Instead of having an employee shop for the customer in a store, one solution Ahold is testing will have robots pick and choose products in a micro-fulfillment center in Philadelphia. The new trial comes after Ahold in 2019 launched another automated fulfillment facility in Hartford, Conn.

Mergers and acquisitions could be part of the strategy to grow the e-commerce business, Ms. Knight said, adding that Ahold is particularly interested in assets that would enhance its ability to serve customers in multiple ways. “We are pickier than we used to be, as it has to fit the omnichannel vision,” Ms. Knight said. Ahold paid €269 million for the stake in FreshDirect, she said.

Ahold is right to keep testing different solutions to boost online sales, analysts said. “The whole industry is in flux how to best serve the channel shift,” said James Grzinic, an analyst at investment management firm Jefferies International Ltd. “The best thing for Ahold is to try different things,” he said.

Write to Nina Trentmann at [email protected]