Troubled Dutch multinational Ahold claims it is well on the road to recovery thanks in part to a new strategy of EDRP - or Every Day Right Pricing.
Corporate communications director Walter Samuels and PR director Nick Gale told The Grocer that CEO Anders Moberg had brought the business back from the “brink of collapse” following the announcement in February 2003 that it had overstated its 2002 earnings to the tune of half a billion dollars.
Samuels said: “We started price cutting harder to get a position in the mid market. The national press likes to talk in terms of price wars. Wars have a beginning and an end: this doesn’t.” Gale added: “We call
ourselves an EDRP player. It is not simply about low prices.”
Following 15% to 35% price cuts on 7,000 lines at flagship Dutch chain Albert Heijn, the new pricing strategy is being rolled out across a number of other chains in the group, which has now sold off most of its non core operations including its South American and Asian chains and is focusing on two key areas: Europe and the US.
The group has also increased its own-label focus, said Gale.
Both moves are part of Moberg’s Road to Recovery strategy to rebrand, reshape and reposition what had been a loose federation of companies.
Walters added the group had already beaten a number of “major targets”, raising E2.5bn from divestments ahead of a year-end target and reducing its E12.5bn debt to E7bn.
Contrary to speculation, it would not necessarily sell off US Foodservice. “The strategy is to recover the value and values of US Foodservice,” said Gale.
Liz Hamson