As far as Timothy Donahue is concerned, everything is just fine with the Hannaford grocery store he frequents in Mill Creek in South Portland.
“I’m very comfortable with Hannaford. I know where everything is and I can shop quickly,” Donahue said Wednesday after learning that Hannaford’s parent company, Belgium-based Delhaize Group, is being bought out by a larger European grocery company, Ahold, which is headquartered in the Netherlands.
Donahue, who lives a few blocks from the store, had one wish for Ahold.
“Hopefully, the new company is smart enough not to mess it up,” he said.
Donahue’s comments illustrate the fine line the owners will have to walk as they combine the two companies, which last year had sales of more than $54 billion and will serve an estimated 50 million customers a week in the United States and Europe. The companies said they expect to find annual savings of up to 500 million euros – or $550 million – by the third year of combined operations, but they need to do that in a way that doesn’t upset existing customers, while making enough changes to attract new shoppers.
The companies’ top executives seem to sense that delicate balance, telling industry journal Supermarket News on Wednesday that they don’t see many benefits in changing store formats or names.
Dick Boer, the chief executive officer for Ahold, and Frans Muller, the CEO for Delhaize, said the majority of savings to be gained by combining the companies will come from “sourcing” – in other words, the stronger buying power of a company that will have more than 6,500 stores on two continents.
The bulk of the rest of the savings, they said, will come from administrative efficiencies.
They also said the combined company can capitalize on what some chains do especially well, and Muller mentioned Hannaford’s expertise in handling fresh goods as something that Ahold’s Stop & Shop chain could learn from.
The merger isn’t likely to result in many store closings. Ahold’s major holdings in the U.S. include the Giant supermarket chain, which is in the mid-Atlantic region, while most of Delhaize’s stores are in its Food Lion chain, based in the Southeast. The only area with significant overlap is Massachusetts, where Hannaford competes with Ahold’s Stop & Shop chain.
Ahold doesn’t have any stores in Maine, where Hannaford is the leading grocery chain.
Eric Blom, a spokesman for Hannaford, said customers will benefit from the merger through an expanded range of products, including more house brands.
The companies also said workers would benefit from more career development programs, but Blom declined to make employees available to comment on the deal.
He also said the two parent companies share a focus on sustainability and popular programs are likely to continue, although no final decisions have been made. Hannaford has had success with its “Guiding Stars” program, which helps consumers make smart nutrition choices, and “Close to Home,” in which the company highlights locally sourced products.
“Both companies recognize that customers want to know where their produce and vegetables come from,” Blom said.
Patrick Mosley hopes that doesn’t change.
When Delhaize purchased Hannaford in 1999, the South Portland resident said he felt like some of the “local flavor” was lost from the stores.
“It would be shame to lose some more of that local flavor” when Hannaford becomes an even smaller part of a huge conglomerate, Mosley said.
While no longer locally owned, the chain has made a commitment to buying local and from sustainable producers, serving as a model for other supermarkets nationally. Hannaford has received several national awards from environmental groups for its commitment to sourcing foods locally and reducing its carbon footprint.
Deanna Barnes of South Portland mostly goes to Hannaford for specials, doing most of her shopping a few blocks away at Shaw’s, or occasionally the locally owned Legion Square Market.
Even so, she bemoaned the continued turnover in corporate ownership.
“Here we go again,” she said.
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