Ahold’s Enters Discount-Land

Ahold’s Convenience Store Format Enters DiscountThe following is the first in a series of guest posts from the latest issue of Global Retail Brands and this is my contribution to the magazine. Throughout the week we will feature one article a day from the new publication – please take a few minutes and click-through to the site – read the entire article and see what the rest of the world is up to.

Ahold’s Convenience Store Format Enters Discount-Land

By Denise Klug, Associate Analyst, Planet Retail

Dutch grocery retailer Ahold’s domestic Albert Heijn Operation has entered Germany with its convenience store concept AH To Ho. The first store is located in Aachen, a city close to the Dutch border. It replaces a former Schlecker drugstore with a sales area of 80 square meters (860 square feet) and offers an assortment of 650-700 skus.

Albert Heijn plans to open further AH To Go outlets in Germany this year – all of which will follow the retailer’s recently launched new food-to-go concept. “We do not see this as a test balloon,” said Ahold Germany’s Managing Director, Jürgen Hotz.

Its sales area has been reduced to 80 square meters.

Exactly 125 years after the first Albert Heijn supermarket opened in the Netherlands, Ahold showed the courage to take the name to Germany. In doing so it is entering a market which is the home of discount giants Aldi and Lidl, a market close to saturation. One of Ahold’s biggest competitors, Delhaize Group, had taken on the German market before. The move failed and Delhaize was forced to close all its stores. One of these was in Aachen, the location of the first German AH To Go.

However, Ahold has chosen to enter the market in a lucrative niche, one that is not in direct competition with the omnipotent domestic supermarkets and discount stores. Only one of the larger German retailers, Rewe Group, operates convenience stores. And Rewe’s network is anything but impressive – it comprises only two outlets so far.

Read the entire story.