Ahold Delhaize USA, the parent company of online grocery retailer Peapod—as well as grocery chains including Food Lion, Giant Food, Giant/Martin’s, Hannaford and Stop & Shop—plans to launch an e-commerce technology unit designed to enhance the digital capabilities of those chains.
The new unit, to be called Peapod Digital Labs, aims to bolster the company’s online growth and personalization capabilities, while also serving as an innovation lab for its U.S. portfolio of companies, a company spokeswoman says. The company plans to build out Peapod Digital Labs in the coming months and expects to have the new organization fully operational by year-end.
While the company says it plans for the new division to bolster its online sales, it doesn’t have any plans to alter the Peapod operation at this time, the spokeswoman says, noting Peapod “will continue to operate and service its customers as it does today.” There also are no plans for Peapod Digital to work for companies outside the Ahold Delhaize USA family of brands.
The Zaandam, Netherlands-based grocer, which derives about two-thirds of its sales from its U.S. operations, believes its combination of a strong online presence and physical stores is essential for its future success. In addition to the Peapod service, Ahold Delhaize operates about 2,000 grocery stores in eastern states. Ahold Delhaize is No. 62 in the Internet Retailer 2018 Top 1000.
Additionally, Ahold Delhaize USA named JJ Fleeman president of Peapod Digital Labs and chief e-commerce officer. Fleeman most recently held the position of executive vice president, commercial services and strategy for Ahold Delhaize USA’s recently established support services company, Retail Business Services. Prior to that, Fleeman was chief strategy and development officer for Delhaize America.
Amazon.com Inc. (No. 1) moved into the grocery store business last year by acquiring Whole Foods Market Inc., which was seen as a challenge for traditional retailers. But Ahold Delhaize CEO Dick Boer said earlier this year that he is not overly worried about competition from Amazon or other competitors in the United States. “Most of our competitors in the United States don’t do home delivery—only click-and-collect,” Boer said at the time. “We are well ahead of the market on this.”
While Boer is confident, there also is little doubt that an increasingly fierce battle for grocery delivery dominance is heating up across the country.
Some recent activity includes:
- In March, Walmart Inc. (No. 3) said it would expand its grocery delivery services to more than 100 metro areas during 2018, up from the six markets it offered delivery to at the time. Walmart’s goal is to offer grocery delivery to more than 40% of U.S. households by the end of the year. It later began working with on-demand delivery company Postmates Inc. and DoorDash Inc.
- Online grocery delivery company Instacart Inc. recently added $150 million to a previous round of venture-capital funding it raised in February.
- On April 10, Amazon launched free two-hour delivery of Whole Foods products in the Los Angeles area via Amazon’s Prime Now. Delivery from Whole Foods through Prime Now first launched in February and expanded in March. It’s now available in seven metro areas.