Wal-Mart vs Ahold

1. Wal-Mart vs Ahold Mirjana Uzelac Neda Kovacevic Mónica Pérez Corporate Intelligence United Business InstituteDecember 2003

2. Ahold 1887 Albert Heijn takes over his father’s small Zaandam grocery store 1911 First Albert Heijn brand name products sold 1948 Ahold on Amsterdam stock exchange 1973 Founding Ahold N.V. for international growth 1977 In U.S. for the first time 1987 Queen Beatrix awards Ahold “ROYAL” 1990 Goes to Czechoslovakia 1992 Portugal 1995 New distribution system: store delivery in 18h 1996 Singapore,Thailand, China, Spain,Poland 2000 Acquired U.S. Foodservice 2003 Big financial scandal Wal-Mart 1962 Company founded with opening of first Wal-Mart store in Rogers, Ark. 1972 Listed on New York Stock Exchange 1979 Wal-Mart reaches $1 billion in sales 1983 First SAM'S CLUB opened 1987 Wal-Mart Satellite Network completed 1988 First Supercenter opened 1990 Wal-Mart becomes nation's No. 1 retailer 1991 International market entered: Mexico 1995 Argentina and Brazil 1996 China in a joint-venture 1997 Wal-Mart No. 1 employer in the U. S. 1998 Germany, Korea in a joint venture 1999 Largest private employer in the world 1999 United Kingdom History

3. Getting Ahold of Things The fraud was simplicity itself. Food manufacturers frequently pay a fee to supermarket operators to encourage them to buy in bulk and then to promote the products to the ultimate consumers. These promotional allowances typically are a function of the volume purchased. The company then aggressively accounted for these promotional allowances, but did not have the volume to justify their recognition. Prematurely and incorrectly recognizing these promotional allowances of course increased their profits for some 500 million euros.

4. Competitive Fact Sheet

5. Wal-Mart vs Ahold

6. Wal-Mart presence in Europe

7. Wal-Mart Subsidiaries in EU UK 250 stores Asda, Wal-Mart Germany 95 stores Wal-Mart

8. Ahold Presence in Europe

9. Ahold Subsidiaries in EU Slovakia 2 stores Hypernova Portugal 198 stores Pingo Doce, Feira Nova Spain 623 stores Supersol, HiperDino, Netto, HiperSol, Cash Diplc Czech Republic 203 stores Albert, Hypernova Denmark 12 stores ISO Poland 165 stores Albert, Mega, Hypernova Norway 1,104 stores Rimi, ICA, Maxi Lithuania 38 stores Rimi, Eko Netherlands 2,333 stores Albert Heijn, Etos, De Tuinen, Jasmin, Gall&Gall, C1000, Ter Huurne Sweden 1,846 stores Rimi, ICA, Maxi Estonia 3 stores Rimi Latvia 26 stores Rimi, Maxi

10. Sector Trends for next 5 years • Diversification • Globalization • Strong Retailers • Technology

11. Sector Trend: Diversification • The maturity of the food market has led supermarkets to look for new opportunities: • non-food1 • discount format1 • e-commerce2 • expansion abroad2

12. Sector Trend: Diversification2 • But almost all have ignored the rise of wholesale food and drink trade • However, it is the most interesing retail sector : • percentage of consumption of food and drink in places other than homes has risen compared to the total consumption: • demographic change: increase in the proportion of older, wealthier people in the population • higher wholesale margins • Wholesale demand from the food service segment increases by 4% to 5% a year across Europe, compared with growth in retail demand of 1% to 2%.

13. Sector Trend: Diversification

14. Sector Trend: globalization3 • The consolidation and internationalisation of the food retail can be expected to continue. • 4 or 5 large retail organizations will operate on a worldwide scale, • a number of dominant regional and national retailers will exist, • the traditional small supermarket is approaching the end of its lifecycle. Market Share of top 5 Retailers in the EU (Carrefour, Metro, Tesco, Rewe, Intermarché) Source: Lebensmittel-Zeitung 2002

15. IGD Global Retail Index1 Source: IGD Research- Date published 04/02/03

16. Competitive Positioning1 The IGD 'European Retail Index' gives a more accurate ranking of the region's top 30 retailers than those rankings traditionally based on turnover size alone.

17. Future Market Focus1

18. Sector Trend: Strong Retailers • The power of the retail sector will grow: retailers are expected to rule the food chain in the coming five years.3 • Retailers are trying to present themselves as a strong brand, but only a few will succeed.3

19. 2003 Global Most Admired Source: Fortune

20. Wal-Mart Subsidiaries • Europe Wal-Mart Germany Wal-Mart UK ASDA • Asia • Wal-Mart Korea • Wal-Mart China • SAM’S Club • The Seiyu • Americas • Wal-Mart Argentina • Wal-Mart Brazil • Wal-Mart Canada • Wal-Mart de Mexico • Wal-Mart Puerto Rico • SAM’S Club • Supermercados Amigo • Todo Dia • Bodega

21. Ahold Subsidiaries • Europe Ahold Polska Ahold Czech Republic Ahold Slovakia Ahold Supermercados Albert Heijn Schuitema Etos Gall & Gall Deli XL ICA AB Jerónimo Martins • Asia • Tops • Tops Market Place • Americas • Stop & Shop • Giant-Landover • Giant-Carlisle • Tops • BI-LO • Bruno’s • U.S. Foodservice • Peapod • La Fragua • CSU • CARHCO • Bompreço • G. Barbosa • Disco

22. Sector Trend: Technology • Cooperation will become increasingly important1: • between manufacturers and retailers to improve the quality, velocity and dynamics within the chain, • between stores to share best practices. • Technology strength will be a critical success factor for retailers and manufacturers3

23. Wal-Mart Wal-Mart Satellite Network (largest private satellite communication system in the U.S.) radio-frequency-identification (RFID) tags—chips Ahold Sales Information System RS/6000 ® SP™ servers Technology Based Intelligence

24. Wal-Mart: SWOT Analysis

25. Ahold: SWOT Analysis

27. Sources • 1) IGD Research, www.igd.com • 2) The McKinsey Quarterly • 3) Cap Gemini Ernst & Young, “The Changing Face of the Worldwide Food Industry” • 4) Tansaş, “Presentation of Food Retail Sector”, www.tansas.com • 5) www.hoovers.com