Ahold Delhaize’S Report Card

Navigating the Northeast Grocery Market

501 Boylston St., Suite 6101, Boston, MA 02116 T: +1 (617) 912 2828 [email protected]

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Exploring the Northeastern Retail Landscape

Checking In On The Merger: Ahold Delhaize’s Report Card

Ahold Delhaize: Defending Against Its Northeast Threats

Bringing It All Together: What’s Next for Ahold Delhaize

4 Families With Children Have Declined in Numbers

Trends diverge between Hispanic and non-Hispanic families ‒ Total number of families with children under 18 peaked in 2007 and has Families With Children Under 18 decreased 4.0%. (Numbers in thousands, percentage change from 2007-2016) 2007 2016 ‒ After a double-digit increase from 2007 to 2016, Hispanic families are now 22% of all families with children -9% under 18.

‒ The number of non-Hispanic families with children under 18 has decreased sharply since 2007 32,791 29,957

+16%

7,192 8,319

Non-Hispanic Families Hispanic Families

Note: Hispanic households may be of any race. Families are married, unmarried, or single-parent families with at least one joint child under 18.

West and Southeast lead, while low commodity prices are drag on the Midwest

‒Job leaders in order of strongest growing are: Nevada, Utah, States by Job Trends# Florida, Idaho, and Georgia Leading Average Lagging Declining ‒Job laggards are growing but well below average: Mississippi, Louisiana, North Dakota, Connecticut, and Illinois are lagging the furthest behind.

‒Job declines in a handful of states are due to low oil prices: Wyoming, Alaska, West Virginia, Oklahoma, and Kansas

‒Texas is notably one of the job leaders due to surging growth in Dallas and Austin. Houston is recovering after posting lagging growth in 2016 due to low oil prices.

‒Automobile-producing states should be watched: Ohio has been hit by job losses in the auto sector as automobile sales level off and inventories remain well above historical averages. Other auto-producing states — Michigan, Indiana, Kentucky, and Alabama — remain resilient for now.

# Categories are based on year-to-year job growth for the six months through June 2017. Leading are the top 16 states. Lagging and declining are the bottom 16 states. Average is all other states.

It also suggests rural areas and most smaller cities are lagging

States and Top 50 Metro Markets by Job Trends* ‒Orlando, Nashville, Atlanta, Jacksonville, and Dallas are the fastest Lagging Declining growing in the top 50. Notably, four of the five are in the Southeast. Leading Average

‒Thirty of the 50 biggest metros are posting growth that is at least as strong as the top 16 leading states (+1.8%).

‒Thirty of the 50 biggest metros are posting stronger growth than the average in their state or bi-state areas. This indicates these largest markets are magnets for jobs and retail sales growth not just relative to the national average, but also relative to the exurban and smaller cities in their area.

* Categories are based on year-to-year job growth for the six Metro markets labeled by months through June 2017. State job growth includes that of biggest to smallest job metro markets within the state. Leading are the top 16 states and market among top 50 and metro markets posting at least 1.8% job growth. Lagging and colored by growth declining are the bottom 16 states and metro markets posting category. See slide 25 for below 1.1% job growth. Average is all other states and metro market name. markets posting job growth between 1.8% and 1.1%.

Leading Average Lagging Declining Year-to-Year Index to Year-to-Year Index to Growth Lead Growth Lead Metro Market Last 6 Months Growth* Metro Market Last 6 Months Growth*

1 New York-Northern New Jersey-Long Island, NY-NJ-PA 1.4% 79 26 Cincinnati-Middletown, OH-KY-IN 2.2% 120 2 Los Angeles-Long Beach-Anaheim, CA 1.4% 76 27 Kansas City, MO-KS Metropolitan Statistical Area 2.4% 135 3 Chicago-Joliet-Naperville, IL-IN-WI 0.8% 43 28 San Jose-Sunnyvale-Santa Clara, CA 1.8% 99 4 Dallas-Fort Worth-Arlington, TX 3.4% 190 29 Columbus, OH 2.0% 111 5 Washington-Arlington-Alexandria, DC-VA-MD-WV 1.6% 88 30 Cleveland-Elyria-Mentor, OH 0.8% 43 6 Houston-Sugar Land-Baytown, TX 1.2% 68 31 Indianapolis-Carmel, IN 2.2% 122 7 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 1.9% 104 32 San Antonio-New Braunfels, TX 2.3% 125 8 Boston-Cambridge-Quincy, MA-NH NECTA 1.8% 100 33 Austin-Round Rock-San Marcos, TX 3.0% 169 9 Atlanta-Sandy Springs-Marietta, GA 3.6% 203 34 Las Vegas-Paradise, NV 3.3% 183 10 Miami-Fort Lauderdale-Pompano Beach, FL 2.5% 141 35 Sacramento--Arden-Arcade--Roseville, CA 1.6% 91 11 San Francisco-Oakland-Fremont, CA 2.4% 131 36 Nashville-Davidson--Murfreesboro--Franklin, TN 3.7% 204 12 Phoenix-Mesa-Glendale, AZ 2.5% 139 37 Milwaukee-Waukesha-West Allis, WI 0.1% 5 13 Detroit-Warren-Livonia, MI 2.0% 113 38 Virginia Beach-Norfolk-Newport News, VA-NC 0.1% 8 14 Minneapolis-St. Paul-Bloomington, MN-WI 2.2% 122 39 Salt Lake City, UT 3.1% 170 15 Seattle-Tacoma-Bellevue, WA 2.9% 160 40 Jacksonville, FL 3.4% 191 16 Denver-Aurora-Broomfield, CO 2.1% 119 41 Richmond, VA 1.1% 59 * Leading metro markets are those posting 1.8% job growth 17 San Diego-Carlsbad-San Marcos, CA 1.8% 99 42 Louisville-Jefferson County, KY-IN 2.1% 118 or above. Lagging and declining 18 Riverside-San Bernardino-Ontario, CA 3.0% 168 43 Memphis, TN-MS-AR 1.2% 69 are metro markets posting 19 Baltimore-Towson, MD 0.9% 50 44 Oklahoma City, OK 0.3% 19 below 1.1% job growth. 20 St. Louis, MO-IL 1.2% 64 45 Raleigh-Cary, NC 2.8% 153 Average is all other metro 21 Tampa-St. Petersburg-Clearwater, FL 3.0% 166 46 Providence-Fall River-Warwick, RI-MA NECTA 0.6% 33 markets posting job growth 22 Orlando-Kissimmee-Sanford, FL 3.9% 215 47 New Orleans-Metairie-Kenner, LA 0.2% 10 between 1.1% and 1.8%. 23 Pittsburgh, PA 1.0% 53 48 Hartford-West Hartford-East Hartford, CT NECTA 0.7% 40 24 Charlotte-Concord-Gastonia, NC-SC 2.9% 163 49 Buffalo-Niagara Falls, NY 0.7% 40 25 Portland-Vancouver-Hillsboro, OR-WA 2.0% 114 50 Rochester, NY -0.4% -22

Where Ahold USA Supermarkets Shoppers Spend the Most on Food/groceries in All Regions

Year Ago Year ending Jul-17 60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0% Ahold (Total) ShopRite Walmart (Total) Other BJ's Wholesale ALDI Costco Trader Joe's Whole Foods Wegmans Supermarkets excl NM Conventional Club Market Supermarkets

Focus on baskets in store and online to drive productivity

Bolstering roots in the productivity loop: “We’ve got to win on baskets, and the economics are not only in our favor, but ‒ Investing in price to drive low-price perception in the customers’ behavior if they shop ‒ Continued demands for EDLC a basket at a time” – Doug McMillon, ‒ Demands for cost efficiencies via strategic sourcing, retail-ready packaging, and Walmart Inc. CEO, October 2016 inventory management, including On Time In Full and shelf-pack requirements Driving growth through comps and online: ‒ Adding just 35 Supercenters and 20 Neighborhood Markets in 2017 crystallizes the need WMT Sources of Growth to drive growth through existing stores. ‒ Acquisition of Jet and its online basket-building capabilities (Smart Cart technology) intends to bring efficiencies of Supercenter online and adds a “new loop” to the productivity loop, elevating the role of baskets online as well as in store. ‒ Other online retailer acquisitions (Shoes.com, Moosejaw, Modcloth) bring category and online selling capabilities to the evolving eCommerce business. Executing strategy aligned with the fundamentals: ‒ Running Great Stores: Efficiencies, elevated role for associates, remodels (500 stores in 2017) ‒ Delivering Value: Price investments, highlighting price leadership, demands for lower costs across the store ‒ Being Great Merchants: Fresh, house of brands/innovation, private label, plus goals around inventory and cost control ‒ Providing Convenience: Neighborhood Market, Walmart.com, online grocery

Growing New Opportunities Advancing Online Strengthening Partnerships – Focused on providing value for Smart, – Growing Pick Up & Pay service to drive – Dunkin’ Donuts replacing BJ’s food courts Saving families under CEO Chris Baldwin online convenience at select locations in the Northeast – Revamping and expanding private brand – Appointed new chief information officer – Revionics using data on BJ’s member Wellsley Farms and Berkley & Jensen to and new chief digital officer behavior to help offer better prices, pack promote H&W and organic in grocery and – Improving BJs.com with new interface, sizes, and items quality and value in general merchandise streamlined online membership, improved – Using Mastercard’s Masterpass digital – Expanding pet food assortment navigation, and additional assortment payment system – Leveraging Tech Advisor service to help – Working with CommerceHub to enable and – Zipit improving BJ’s order processing and members research, shop, and install club upgrade drop-shop delivery capabilities online fulfilment electronics products – Added online ordering system for bakery – Partnering with IRI to use point-of-sale and – Launched B2B platform to drive and deli consumer panel data to refine category, opportunities with underserved business – Launching new mobile site with improved merchandising, pricing, and targeted owner shopper segment functionality segmentation strategies

BJ’s Perks Rewards sign above aisles

Explanation of pricing strategy in Dollar savings listed on some items ways that puts the member first

Bonus packs create solutions that make sense for shoppers’ and parents’ daily lives

Bonus packs can be used to create “BJ’s exclusive offer” to boost value Two-for-one chips offer Large pack sizes and bonus items reduce excitement in general merchandise item equivalency with other retailers

Creating Value Expanding Overseas Partnering Digitally Advancing H&W – Renewing focus on EDLP to – Opened first location in – Almost 10,000 SKUs online; – Selling well over $4 billion offer the lowest price per unit France (Paris) in June 2017 adding more in HBA, apparel, annually in organics alone possible and fewer MVMs – Opened first location in and high-end categories – Offering sourcing, health, and – Growing private label from Iceland in May 2017 – Adding eCommerce sites in sustainability brand 27% to 35% SKU penetration – Planning 15 new international international markets narratives – Upgrading member rewards locations in fiscal year 2017 – Now partnering with Shipt as – Using health and wellness as with Costco/Visa/Citibank co- – Increasing focus on cross- well as Instacart to drive a showcase for exclusive and branded card movement of local market fresh/grocery delivery premium products – Expanding Business Centers items across Costco’s other – Updating back-end IT – Lending money to some with 30 locations by 2022 markets systems, such as accounting suppliers to develop organic – Partnering with Ticketmaster and membership systems farmland in exchange for first and AXS to sell event tickets rights to harvest

Instant savings in flux with fewer promotional periods but frequently deeper savings on individual items

Instant savings provide regular, powerful value “30%” more product on big brands Creating value through additional savings on services that can dictate the timing of shopper trips such as pet prescriptions and travel

Costco is the largest organic seller by sales volume in the U.S.

Small brands and snacks have a head Costco working on sourcing Brand lists popular health benefits Organics are a core component start on health and all eggs as cage free such as “gluten-free” of many Costco grocery categories wellness narrative

KS items tend to be more productive than national brand counterparts

Kirkland is known for high-quality grocery and regularly innovates its items Kirkland helping to drive H&W to improve quality while providing additional savings for members

More shoppers, more trips, more basket dollars

No. of No. of Trips Value of Shoppers Basket

• Category introduction or • “Aldi Finds” promotions • Emphasis on “value for expansion(e.g., baby care, and unexpected items money” reinforces organics) opens Aldi’s offer draw in treasure hunt price perception and brand to new shoppers. traffic. positioning. • The goal is • Increased emphasis on to make the trip fast and select categories (e.g., convenient. fresh) creates new opportunities to convey value.

Brand Stores Assortment Pricing Financial Position

Small footprint Limited to Promise of Fast-turning SKUs Highly competitive (10,000 square high-velocity low prices drive high sales item-level pricing feet) SKUs and high quality per square foot

Leverage noncomparable Fill-in mission focus Trip-driving Fun in-store Frequent fill-in trips items to make generates return consumable items experience pricing evaluation traffic difficult

Small format and Focus on well-trained staff Stress-free Predominantly High levels of basket-level enables a experience private label customer service pricing highly efficient operating model

Highly trained and Private label Focus on highly well-compensated approach drives differentiated items staff profitability

Demos, signage, fixtures and layout create sense of fun and treasure hunt

Assortment is dominated by private label, though branded items have limited role. Many unique items also to be found throughout the store

Sales (USD millions) Sales CAGR Sales CAGR Sales Added 17E-22E Retailer Banner 2012 2017E 2022E 2012-2017E 2017E-2022E (USD millions)

Ahold Delhaize Stop & Shop $13,705.00 $14,087.70 $15,087.70 0.6% 1.4% $1,000.00 Wakefern ShopRite $12,382.25 $13,819.92 $15,970.21 2.2% 2.9% $2,150.29 Wegmans Wegmans $6,599.16 $8,650.65 $10,642.81 5.6% 4.2% $1,992.16 Giant Eagle Giant Eagle $8,004.03 $8,251.73 $9,071.78 0.6% 1.9% $820.05 Ahold Delhaize Hannaford Brothers $6,083.00 $6,925.00 $7,721.00 2.6% 2.2% $796.00 Ahold Delhaize Giant Food $5,147.00 $5,742.00 $6,314.00 2.2% 1.9% $572.00 Ahold Delhaize Giant MD $5,439.00 $5,544.00 $5,915.00 0.4% 1.3% $371.00 DeMoulas Market Basket $2,851.99 $3,912.10 $4,649.86 6.5% 3.5% $737.76 Albertsons Acme $2,455.28 $3,622.50 $3,844.71 8.1% 1.2% $222.21 Golub Price Chopper $3,419.18 $3,338.74 $2,470.36 -0.5% -5.8% -$868.38 Weis Weis $2,504.08 $3,078.61 $3,330.60 4.2% 1.6% $251.99 Albertsons Shaws $3,544.61 $2,806.29 $2,964.04 -4.6% 1.1% $157.75 Tops Tops $2,315.47 $2,553.46 $2,783.44 2.0% 1.7% $229.99 Big Y Big Y World Class $1,514.17 $1,987.70 $2,440.93 5.6% 4.2% $453.23 Ahold Delhaize Martins Foodstores (VA) $1,025.00 $760.00 $645.00 -5.8% -3.2% -$115.00

Who is expanding vs. getting more out of existing assets?

2017E CAGR Retailer Status Growth Sales ('17E-'22E) Albertsons Companies $58,604 Stable 3.5% Leading Ahold Delhaize $43,855 Stable 1.6% Lagging Wakefern $13,995 Stable 3.2% Lagging Giant Eagle $8,861 Stable 2.4% Lagging Wegmans $8,651 Expanding 4.2% Leading DeMoulas $3,912 Stable 3.5% Leading Golub $3,732 Expanding 4.0% Leading Weis Markets $3,079 Expanding 1.6% Lagging Tops Markets $2,561 Stable 1.7% Lagging Big Y $2,043 Expanding 4.1% Leading

23 Last Year, We Gave Ahold Delhaize a To-Do List

How did it go?

Address Distinct Consider Integrating Define Simplify Shopper Profiles Loyalty Programs Price Position Private Label

Particularly true relevant to income and race/ethnicity

Key Differences in Banner-Level Monthly Shopper Bases vs. All Monthly Ahold Delhaize Shoppers

Giant Stop & Food Lion Hannaford Foods Shop

Age Skews Older

Income More Affluent More Affluent Less Affluent Less Affluent

More Diverse: More Diverse: Race/Ethnicity Less Diverse Hispanic and African- Less Diverse Asian American

What Matter to Shoppers: Key Differences in Banner-Level Shopper Bases Values Indexed vs. All Ahold Delhaize Shoppers Food Lion shoppers are Giant Stop & Shop Food Lion Hannaford more price-centric than other Ahold Delhaize Feeling like I got a "good deal" 100 100 101 97 shoppers

Spending as little money as possible 95 95 106 102

Having a stress-free shopping experience 103 100 97 100 Hannaford shoppers care more about getting in and Doing all or most of my shopping in one place 92 98 106 96 out quickly

Completing my shopping as quickly as possible 101 91 102 113

Purchasing high-quality products 107 113 87 89

Having fun/enjoying myself 98 102 100 102 Giant and Stop & Shop Interacting with helpful, friendly employees 104 110 96 97 shoppers place a higher Discovering new products or brands 102 103 95 101 emphasis on quality

Having access to information about products or brands 100 102 102 102

Supporting retailers/brands that reflect my values 105 94 108 106

Note: Green highlighting indicates significantly greater vs. all Ahold Delhaize shoppers; red highlighting indicates significantly lower vs. all Ahold Delhaize shoppers (95% confidence level)

Current Status Aspiration

Maximize Maximize Efficiencies Effectiveness

i.e., Cereal i.e., BBQ Sauce Variation Little variation by in taste from NC to TX; region, less flexibility more space allocated for for localized SKUs local decision

Decentralizing

‒ Category merchandising Centralizing ‒ Assortment ‒ Pricing ‒ Promotions ‒ Marketing ‒ Financial services ‒ Format teams ‒ Supply Chain ‒ Legal ‒ Information technology ‒ Human Resources ‒ Private label

Kevin Holt Frans Muller COO of Ahold USA Interim COO of Delhaize America Appointed in last 12 months

Mark McGowan Gordon Reid Nick Bertram Jennifer Carr-Smith Roger Wheeler Meg Ham Michael Vail President of Stop & Shop President of Giant Food President of Giant & Martins CEO of Peapod President of President of Food Lion President of Hannaford Prev. Giant Landover Prev. Giant-Carlisle Retail Business Services

Stop & Shop, Peapod Hannaford Food Lion Giant, and Martin’s

‒ Benefits include weekly ‒ Three membership types are ‒ Hannaford operates a – Benefits include Weekly specials, gas savings, cash available: $49 for 3 months, myHannaford membership Card specials and digital back for schools with A+, $69 for 6 months, and $99 card and partners with coupons that load to the and checkout coupons. for 12 months. third-party programs card. ‒ Loyalty programs are ‒ Membership provides SavingStar and U promise. – The retailer is shifting to identical, but not integrated shoppers with free delivery ‒ Hannaford offers printable personalized coupons across banners. for grocery orders over $100. coupons off its site.

Pricing position determines marketing style

Hi-Lo Hybrid EDLP

Ahold Delhaize needs greatest help in communicating value in non-edible grocery

Percent of Ahold Delhaize Shoppers Who Say Ahold Delhaize Offers the Best Value for … (among past four-week Ahold Delhaize shoppers)

27% 19% 9% 7%

Fresh grocery Non-perishable grocery HH cleaning/paper products HBC products

Top Three Factors Ahold Delhaize Shoppers Say Determines Value Leadership (among past four-week Ahold Delhaize shoppers)

Fresh grocery Non-perishable grocery HH cleaning/paper products HBC products

Everyday low prices Everyday low prices Everyday low prices Everyday low prices

High-quality products Products I want always in stock Products I want often on sale Products I want often on sale

Products I want always in stock Products I want often on sale Products I want always in stock Products I want always in stock

Performance Gaps in Low Prices (share of shoppers say ‘I feel confident I'm paying the lowest price at this retailer’ minus share of shoppers say ‘feeling confident I’m paying the lowest prices is extremely important’)

-10

-19 -24 -25 -25 -26 -26 -29 -29 -30

Read as: 29 ppt more Ahold Delhaize shoppers say -37 All Food and “feeling confident I’m paying a low price” is extremely Grocery Retailers: -41 important when grocery shopping than say they feel -19% confident they’re paying a low price at Ahold Delhaize

Note: logos indicate retailer shoppers, caution small sample sizes for Southeastern Grocers, ShopRite, and Wegmans

Premium

OPP

‒ Launched 12 new categories in 2016, focused in HBC and baby.

‒ Added “Free From” labeling to Nature’s Promise food and non food products.

‒ Retailer estimating to make Nature’s Promise a $2 billion brand by 2020.

‒ Brand is consistently posting double digit growth year over year.

Ahold banners over deliver on private label, Delhaize banners under deliver

Importance of vs. Experience with Private Label at Ahold Delhaize (share of shoppers rating factor as “extremely important” vs. share indicating it describes experience) Performance Gap

Ahold “Good assortment of private label products is extremely important” 26% +2 ppt Shoppers “Good private label products are available at retailer” 28%

Delhaize “Good assortment of private label products is extremely important” 33% -13 ppt Shoppers “Good private label products are available at retailer” 20%

How did it go?

Address Distinct Consider Integrating Define Simplify Shopper Profiles Loyalty Programs Price Position Private Label

Implementing Building Out Mobile Investing in Price Expanding High Decentralized Model Loyalty Capabilities Decreases Growth PL Brands

40 Fresh, In-Stock, and Prices Should Be Top Priorities for Ahold Delhaize Given Shoppers’ Evaluations of Ahold Delhaize vs. Their Expectations

Ahold Delhaize Performance Gaps: Importance vs. Experience for Grocery Shopping Factors (share rating factor as “extremely important” vs. share indicating it describes experience)

80% Convenient Location 70%

60%

Average Importance Average In/Out 50% Clean Store High Quality Fast Easy to 40% Fresh Foods Friendly Checkout Find Associates Retailer One In-Stock Getting Good Rewards Place 30% Deal Me Private Organic/ Helpful Lowest 20% Label Natural” Associates Price

Prepared/

Average Indicating Shoppers of Share Average Experience Shopping Describes Factor Retailer 10% “To-go”” Unique “Gets Me” Products

0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Share of Shoppers Rating Factor “Extremely Important”

Strengths Weaknesses ‒ Strong brand recognition ‒ Poor performance and market share in peripheral markets/ ‒ Strong real estate in valuable markets shopper loss ‒ Strong private labels across product categories, organics ‒ Lack of clear differentiation ‒ Share leader in core markets ‒ Inconsistent execution across banners ‒ Increasingly competitive prices ‒ Redundant private label portfolio ‒ Peapod source of high growth, click-and collect leader in ‒ No local banner strategy to address diverse shopper profiles Northeast ‒ Confused pricing strategies that risk shopper loyalty ‒ Strong local sourcing partners ‒ Lack of full omnichannel integration of Peapod with store ‒ Hannaford format innovation operations and purchasing

Opportunities Threats ‒ Continued online grocery expansion (Peapod, Hannaford To Go) ‒ Core shopper loss ‒ Partnership with EYC to build out shopper insights program ‒ Growing presence of low-price competitors (e.g., Aldi, Walmart) ‒ Greater use of pay and go in-store technology, Scan It ‒ Traditional and new channel competition (Lidl, warehouse clubs, ‒ Experimentation with mobile platforms (smartphone apps) Wegmans, Publix) ‒ Center-store innovation programs ‒ Other retailers’ greater focus on health and wellness through ‒ Clarity of pricing and value strategies services ‒ Continued format innovation and store remodels ‒ Supplier resistance to high cost to serve ‒ Improved fresh and bakery departments ‒ Increasingly polarized shopper base

Kantar Retail © 2017 Source: Kantar Retail research and analysis Its Top Three Grocery Competitors Are All Threatening Ahold Delhaize in Specific Areas Defending against one of them, makes them more threatened by the other

Services

Perimeter Innovation

Defined Price Position

Events target specific health needs, promoting strategic products for ShopRite (private label, premium items, etc.)

Confused pricing position risks shopper loyalty

Red “bonus buy savings” feature weekly promotions. Brands Bargain aisle combines value offers in one place for shoppers. Using blue coloring helps also encouraged to price promote with stand alone displays shoppers identify value items throughout the store. throughout store.

Signage communicates product authenticity, elevating assortment from competitors

Health & Wellness Local Family & Convenience

And designates check-outs as a one-stop-shop for healthy impulse

But replications lack the same authenticity

Reflecting weak perimeter store experience

How Shoppers Typically Shop for Food and Groceries at Legacy Ahold and Delhaize Banners

All Retailers: 38%

Exclusively/ Primarily Exclusively/ Shop Center Store Ahold: Primarily Shop 28% Perimeter Departments

All Retailers: Ahold: Delhaize: 16% 25% 19% Delhaize: 26%

“Fresh Picks of the Week” Enhanced signage departmentalizes Wooden boxes give farmer’s market “Free Fruit” for kids differentiates emphasize seasonal produce and fresh categories for shoppers, appeal, and further promote private experience and promotes health & freshness. especially organic. label. wellness.

While Ahold Delhaize is only slightly lower than average on delivering against fresh demands, the retailer is far behind key competitors such as Publix, Wegmans, and ShopRite

Performance Gaps in Fresh Foods (share of shoppers say ‘retailer offers high-quality fresh foods’ minus share of shoppers say ‘high-quality fresh foods is extremely important’)

-12 -12 -13 -15

-21 -22 -24 -25 Read as: 30 ppt more Ahold Delhaize shoppers say -30 “high quality fresh foods” are extremely important -34 when grocery shopping than say Ahold Delhaize delivers high quality fresh foods All Food and -39 -41 Grocery Retailers: -30 -52 Note: logos indicate retailer shoppers, caution small sample sizes for Southeastern Grocers, ShopRite, and Wegmans

59 Last Year, We Gave Ahold Delhaize a To-Do List

How did it go?

Address Distinct Consider Integrating Define Simplify Shopper Profiles Loyalty Programs Price Position Private Label

Implementing Building Out Mobile Investing in Price Expanding High Decentralized Model Loyalty Capabilities Decreases Growth PL Brands

Services Price Perimeter

Understanding decentralized merchandising model: Anticipate demand for a more localized offering between Ahold Delhaize’s top banners. Plan against increased shelf competition from local brands and products as regional divisions get more autonomy to better localize the assortment.

Monitoring nuanced loyalty programs : Plan for banner loyalty programs to remain separate. Understand the nuanced strategies Ahold Delhaize is pursuing with each (e.g. personalized digital coupons, mobile capabilities, etc.) to maintain brand relevance. Expect more targeted promotional strategies once Ahold Delhaize is able to fully optimize shopper data behind veteran loyalty programs.

Planning for further price decreases: Expect continued price decreases while simultaneously understanding differing pricing strategies between banners. These pricing strategies will remain decentralized as retailer further integrates its decentralized model.

Engaging private label: Develop a strategy for how to engage with Ahold Delhaize’s private label, especially for the natural/organic portfolio. Expect further integration of premium brands

Connecting to perimeter and services: Evaluate potential opportunities to connect your brands/categories to more places in the store, especially to perimeter departments services. Prioritize solution-based merchandising that builds baskets, helping Ahold Delhaize drive its comparable store sales.

Contact: Contact: John Rand Elley Symmes Senior Vice President Analyst

T: +1 (617) 912 2860 T: +1 (617) 912 2865 [email protected] [email protected]

@kantarretail @kantarretail www.kantarretail.com www.kantarretail.com