Why is this a strategic priority?

We operate at the heart of society, and each of our great local brands represents the unique character and needs of the communities it serves. We want to be the most local, futureproof and inclusive grocery retailer, but we can only do this if we provide associates with the resources, conditions and support they need to serve customers well every day.

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What are we doing about it?

Local

For us, fostering great local brands begins with building strong talent pipelines – attracting, developing and retaining the best people, who also reflect their communities. Each of our brands has the aspiration to be the leading employer of choice in its market. See the chapter Own workforce in the Annual Report for details on our people promise and how we bring it to life.

We also support our brands’ communities through outreach initiatives. Mega Image has an internal volunteer program called 12 Acts of Kindness through which associates can recommend initiatives and volunteer time or money. At Stop & Shop, associates work directly with local schools to establish and support in-school pantries, ensuring kids have access to food at night and over the weekends. They operate in five states and 256 schools and serve over 40,000 students in need and their families.

Future-proof

We believe that to enable the best customer experience, we need to enable the best associate experience. The jobs we have in our brands’ stores and DCs, and even our offices, are constantly changing, because of changing customer expectations and quickly evolving technology. Our brands invest in upskilling and reskilling associates to ensure they continuously learn, challenge themselves and keep growing. In our annual Associate Engagement Survey (AES), growth was scored at 75%.

This way, we ensure we are prepared for the future of work. We are continuously investing in and leveraging technology to help us do this, for example, with our SuccessFactors platform, which enables seamless, paperless HR processes for almost all 388,000 associates and managers. We will continue using technology to help our people be more productive and efficient and make their jobs easier.

Inclusive

At Ahold Delhaize, our simple commitment is to be open for everyone – associates, customers, partners, suppliers and every member of the community.

Our brands do this through a commitment to diversity, equity and inclusion, brought to life through our 100/100/100 aspiration. We strive for a workforce that is 100% gender balanced at all levels and 100% reflective of the communities we serve and a culture that is 100% inclusive. In 2024, we had 52% women in the workforce. We work toward this aspiration through a collection of brand-specific initiatives. See the chapter Equal treatment and opportunities for all in the Annual Report for more information on these local initiatives.

Our brands’ great local people, with deep experience and passion for customers, are our key differentiator. They power our aspiration to be the most local, future-proof and inclusive company so our brands can be the leading employers in their markets, improve productivity, serve customers better and foster more innovation for the future.

Why is this a strategic priority?

We believe there is a clear connection between the well-being of people in our brands and their communities and the well-being of the planet. The health crisis and the climate crisis are interconnected challenges. What we put on our plates has a direct impact on the world beyond our kitchen tables. In line with our purpose and vision, we focus on building healthy communities and a healthy planet.

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What are we doing about it?

Healthy communities

We strive to guide customers and communities toward positive habits that help them live healthier and more sustainable lives. Our brands offer the right assortments to make healthier and sustainable products affordable and accessible for all. They continue to increase their healthy own-brand food sales as a percentage of total own-brand food sales, by following scientific guidance systems, reformulating products and increasing the number of healthier products in their assortments.

Our brands support their communities through food bank donations and by organizing local events to bring people together. They also contribute through financial donations.

For our brands, interacting with customers includes inspiring them to engage in positive habits to build healthier and more sustainable lifestyles. That is why they strive to offer information, inspiration and incentives, such as through healthy and nutritious recipes, loyalty programs that support healthy eating, coaching services and transparent labeling.

Healthy planet

We have defined three key areas where we can have a high impact:

• Climate: Accelerate value chain decarbonization by shifting to non-fossil-derived fuels, lowering energy consumption, increasing renewable energy and driving more efficient transport in our brands’ operations, while working with suppliers to identify and implement initiatives relative to their businesses.
• Nature: Protect nature and biodiversity by promoting sustainable and regenerative agriculture and water stewardship and working to stop ecosystem conversion and pollution, while respecting people, animals and habitats.
• Circularity: Scale circular models for packaging and unsold food waste by reducing the use of fossil fuel-derived plastics, designing for recyclability and driving higher valorization of unsold food.

We have made important strides in our work toward a healthy planet. For more details, see the chapter Environmental information in our Annual Report.

We have also strengthened our focus by creating a dedicated Chief Sustainability Officer role on our Executive Committee. We include health and sustainability components in the short- and long-term incentives that are part of our remuneration policy, and issued debt products, such as sustainability-linked and green bonds.

Why is this a strategic priority?

Customers are increasingly looking for personalized offerings adapted to their needs and expectations. And this is true no matter how or when they choose to engage with us. They use a variety of channels to interact with our brands: from click and collect to mobile apps to shopping at our brands’ stores. This provides our brands with the opportunity to create deeper connections with customers and ensure they are met with products, services and offerings tailored to them.

We want customers to have vibrant experiences every time they interact with our brands, whether through community connections, in-store experiences or integrated and digital interactions. Today’s customer journey is about deeper personalization and integrated solutions.

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What are we doing about it?

Driving omnichannel engagement

When we talk about our brands, we are referring to a combination of in-store and online businesses. Being a true omnichannel retailer is part of our winning combination of local insights and international scale. Through the capabilities we have built, each brand now has a seamless, integrated shopping experience through which they build trust and loyalty across all shopping channels.

Our omnichannel growth has also been fueled by the bold moves we’re making to evolve our business. For example, in the U.S., we have built our proprietary e-commerce platform called PRISM, which now enables pickup or delivery for most of our brands’ customers across 19 states.

Our omnichannel offering is at the heart of our customer journey and an important priority for our brands. Omnichannel customers spend one-and-a-half to three times more with our brands than single-channel customers in our most mature markets. By continuously improving the customer experience, in locally vibrant stores, through a leading digital user experience and strong customer service, we aim to drive omnichannel loyalty sales penetration up to 80% by 2028.

And our brands’ stores are more than places to shop. They are at the center of their communities – some for more than 150 years. During both good times and bad, our brands’ stores are “go-to” places for people to connect, celebrate and support each other.

Growing personalization and loyalty

Personalized value is a critical driver for loyalty and repeat customers. Our brands are already active in this area, providing billions of personalized offers each year, and will now create unique shoppable content across channels and leverage innovative technologies for a truly connected shopping experience. Customers will receive inspirational, hyper-personalized content that makes shopping fun. This complements the significant value propositions our brands have created, both in the U.S. and Europe, as demonstrated by awards received, such as the 2024 America’s Best Loyalty Program award at Food Lion, Giant Food and Stop & Shop, and milestones, like Albert Heijn’s Premium program reaching one million subscribers this year.

By building best-in-class data insights capabilities that improve personalization and offer tailored product recommendations, infusing more life and content into our loyalty programs, and enhancing the digital experience, we expect to increase active app users, targeting around 30 million per month by 2028.

By keeping the customer at the center of all we do, our brands will continue to build trust and drive loyalty.

Why is this a strategic priority?

Consumers increasingly expect products that are healthy, local, fresh and sustainable. At the same time, “best value for money” remains one of the most important purchasing criteria, both in the U.S. and Europe. Customers look for a relevant, healthy and locally sourced assortment at the right value.

For our brands, this means being laser-focused when it comes to the basics: delivering trusted products at excellent prices.

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What are we doing about it?

Driving price, value and assortment

Supporting customer choice by providing easy access to affordable and healthy food options is at the center of the customer value proposition at all our great local brands. Customers are facing intense pressure on their household budgets; in the face of this, our brands are doing their utmost to keep shopping affordable.

We have a strong set of levers in place to drive market share and volume growth, including taking the right actions on assortment and promotions to enhance our brands’ price position, for example by making €1 billion in price investments in the U.S. over the next four years and expanding the Price Favorites – low-priced, top-quality own-brand products – across our European brands. They have a local name and flavor in each market, such as "Price Favorites” at Albert Heijn and “Little Lions” at Delhaize.

Our brands already strive to offer customers fresh, local, healthy and sustainable assortments. They aim to maintain a high level of product safety for our own-brand products, while also seeking to address human rights and environmental protections in the supply chain. We know this builds trust and deepens our brands’ connection with customers.

Own brands

Own brands play a critical role in driving customer loyalty and business performance for our brands. Tailored to each market, own brands are a vehicle for localization, quality and innovation, all key to our customer value proposition. Most baskets at our brands contain an own-brand product.

These ranges include value options and choices that are better for our brands’ customers and the planet. For example, in the Netherlands, Albert Heijn offers almost 2,000 own-brand organic products.

In the U.S., our brands have lowered prices on many own-brand items. For example, Giant Food lowered the prices of hundreds of own-brand items and expanded its Flexible Rewards loyalty program to include double points on Giant brand items purchased.

Our brands are continuously working to deliver high-quality own brands. Their efforts were recognized by many external awards this year, such as Albert Heijn and Etos having numerous own-brand products named as “Chosen Private Label Product of the Year” and Alfa Beta securing several World Quality Awards for its Close to the Greek land range. We are raising the bar significantly on our ambitions and intend to reach own-brand penetration of around 45% across the company by 2028. We will do this by moving faster with cross-brand best practice sharing and consolidating activities – for instance, leveraging the Nature’s Promise brand across the U.S. and Europe and bringing our strong European own-brand wine business to our U.S. brands.

Why is this a strategic priority?

Just as we continuously invest in our brands’ stores, we maintain and invest in innovation and technology, to enable our brands to serve customers better every day. These investments boost our omnichannel offerings and drive our sustainability transformation, making a structural and long-term impact that also helps us to remain competitive.

Innovation can also unlock new opportunities to drive revenue and improve efficiency. Complementary businesses provide a much-welcomed opportunity to develop additional revenue streams at higher margins than the traditional grocery business.

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What are we doing about it?

We are using innovation to better leverage our large customer base and existing infrastructure. For example, Albert Heijn and Delhaize have begun to offer vehicle charging stations in their store parking lots.

We continue to invest in our tech foundations and data and AI capabilities and work to enable rapid integration of new technologies alongside data that is reliable, available and secure. In the Netherlands, we partner with the Kickstart AI foundation to boost adoption of AI. This year, Kickstart AI completed a pilot to automate and fine-tune bol subsidiary Ampère's parcel volume predictions, improving efficiency and making logistics more sustainable by reducing unnecessary trips and optimizing vehicle use.

In addition, we are joining the industry in exploring the food retail applications of generative AI, a technology that could impact every domain of our business – from our brands’ people and operations to customers and the planet. For example, the U.S. e-commerce business has launched a semantic search solution that understands the context of a customer’s online search request and returns improved results. In all areas of innovation, we will continue to reinforce our unique model that allows us to experiment locally and scale winning solutions across our brands’ markets.

Ahold Delhaize also has a unique opportunity to capitalize on the momentum of a growing retail media market. At the same time, we will relentlessly explore new business models and drive innovation.

We will accelerate complementary income streams across:

• Retail media, data and insights
• Digital services
• B2B commercialization, such as bol’s third-party sellers
• Pursuit of new opportunities, such as investing in innovative start-ups and scale-ups through W23 Global, a retail venture capital fund

In the U.S., we have taken bold moves to accelerate the growth of our retail media business, including bringing our retail media platform in-house last year. As a result, we have increased U.S. retail media income by approximately 34% versus last year.

Our retail media model leverages our omnichannel approach to capture traffic from both our brands’ online and physical stores. This results in more personalized offers for customers, higher conversion rates for advertisers and potential new revenue streams. To put this into action, we are partnering, building and acquiring technology and capabilities. Our investment in advertising technology company Adhese and our existing network of 10,000 instore digital screens across Europe demonstrate our commitment to this strategy.

Why is this a strategic priority?

With our size and scale, we are known for our ability to deliver consistent operational and financial performance. Our brands’ relentless focus on driving operational efficiency unlocks the funds to reinvest in our customer value proposition, tech solutions and sustainability ambitions.

Our success is about continuously looking for simplification and cost-saving opportunities to fuel our plans for growth.

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What are we doing about it?

Portfolio excellence

We are developing our portfolio with the right mix of organic and inorganic growth and businesses that deliver strong returns. Densifying and expanding our strongest brands is our top priority.

In the U.S., we are returning to a strong focus on organic store growth, accelerating growth at, for example, Food Lion and Hannaford. In Europe, we are leveraging our Benelux stronghold through Albert Heijn and capturing new growth opportunities in Central and Southeastern Europe (CSE), with store openings and with acquisitions like Profi bringing scale and synergies.

When necessary, our brands take action to strengthen future performance, as they successfully did through the recent Belgium Future Plan and are working on through Stop & Shop’s revitalization.

Operational excellence

We continuously work to deliver savings and unlock operational efficiencies. Our brands lower the cost of goods sold by building meaningful purchasing alliances in Europe with international peers, by growing scale in own brands and by leveraging the power of data and analytics to build assortments and enhance procurement negotiations.

AI and automation helps us to unlock efficiencies across logistics, distribution, store operations and back offices. We seek to simplify and refine our operating model, to make associates’ jobs easier and more efficient, and to lower general and administrative costs over time. For example, in 2024, we streamlined the support services for our U.S. brands into a single organization and simplified our European and Group structures.

We invest in the tech that powers our supply chain – such as developing the infrastructure the U.S. DCs operate on. We deliver better customer experiences through tech-powered investments in our brands’ stores, such as electronic shelf labels in Europe and handheld technology that frees associates to better serve customers.

And we leverage our scale to deploy winning solutions across our brands. Our forecasting tool, which we implemented across Albert Heijn, Delhaize and the U.S. brands, is a great example. We have also rapidly deployed an online product recommendation engine across Belgium, Romania, Serbia and Greece and launched a joint e-commerce platform in the U.S.

Save for Our Customers

Over the past four years, we have made great strides with our Save for Our Customers program. We intend to raise our target again to €5 billion in total between 2025 and 2028. The savings from this program will be reinvested in our winning customer value proposition, technology and our sustainability agenda, to continue to drive growth.