The Peapod grocery delivery service and the Stop & Shop remodel plan could be growth drivers for Ahold Delhaize in the coming years.

The company operates 1,975 stores and had more than $43 billion in 2018 sales, but Kantar Consulting expects the negatives will outweigh the positives in the near term.

Kantar forecasts a sales compound annual growth rate of 2% for Ahold Delhaize for 2018-2023.

“Ahold Delhaize is a similar story (to Albertsons) in the sense that they’ve just been really slow to innovate,” said Elley Symmes, senior analyst for Kantar. “They have one advantage, which is Peapod, which I believe to be the most underpromoted asset of that retailer to date. They could do a lot more to drive Peapod’s brand equity and just kind of longevity in the industry, and I think also the new decentralization model that they’ve implemented could help their banners be more effective and relevant at a local level.”

However, Symmes noted that so far that model has not brought much lift to the business, especially Stop & Shop.

“That banner continues to struggle and grow flat, if not declining, quarter by quarter, and that’s 30% of Ahold Delhaize’s sales, so a really big question for Ahold Delhaize is how they’re going to improve the performance of that banner, and I think the store remodels that they’re doing could be one solution,” Symmes said. “That being said, they just started them, it’s over the next I think three to four years that they’re going to be rolling those out, so while I think that could bring some lift to the business, as most remodels do, it’s much more of a longer-term question of how are you are really truly creating an effective and relevant retailer and banner business going forward.”


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