By bringing together the strength of these two companies, the business has realized streamlined operations and other efficiencies, while the customer benefits from better service and increased value. The combined company has the goal of being the largest volume retailer, satisfying the most customers in the Eastern United States.
Why Stop and Shop/Giant Landover?
A match to create one strong force
Stop & Shop and Giant Landover are a great match. The decision to create a business arena with Giant and Stop & Shop was fundamental to a vision of creating a stronger, more aligned organization with a firm commitment to the growth of these strong local brands. The strength of the brands in their respective markets, the scope of the arena's combined resources, and the high quality of associates, position Stop & Shop/Giant to be a foremost supermarket company in the Northeast United States.
Both companies share similar histories and dominate their respective markets. Stop & Shop, founded by the Rabinovitz family as Economy Grocery Stores Company in 1914, grew from a single corner grocer to a chain of stores throughout New England, New York and New Jersey. Stop & Shop joined Ahold in 1996.
Giant Food Inc., founded by the Cohen and Lehrman families in 1936, quickly grew to be the dominate regional supermarket company with stores in the greater Baltimore/Washington, DC area of Maryland, Virginia and Delaware. Giant of Landover joined Ahold in 1998.
Why integrate?
The business objectives
The creation of arenas allows us improve and enhance our products and services to the customer, by combining and rationalizing our behind-the-scenes operations. Our objective is to maintain the separate brands of each of our operating companies, including pricing and product assortment, while combining functions such as administration, controlling, IT, sourcing, finance and human resources.
Within this new organizational framework, we are launching several strategic business initiatives aimed at improving competitiveness and, ultimately, sales and profitability. These include store operations, private label, sourcing, IT and supply chain initiatives.
Summarizing our business objectives:
- Building a great business that captures the excellence and synergies from both companies, and creates an environment that grows local excellence and delivers greater value to customers, understanding that the growth of the local brands drives competitive advantage.
- Leveraging back-office operations, to increase the efficiency and "agility" of the organization. As one integrated organization, the company will be able to anticipate and respond quickly and effectively to dynamic market conditions and customer needs, and deliver superior customer service at the lowest possible cost
- Enhancing profitability to both free up additional financial resources to build a stronger company, and to reinvest to grow the business.
Guiding principles of the integration
Supporting customers, associates and business
The integration was pursued on a tight schedule immediately following its announcement in January 2004. Guiding principles of the integration, were to complete the merging of administrative, technical and distribution functions of the combined company with minimal disruption to the customer.
These principles included:
- Commitment to associates that they would be communicated to on a regular basis and kept informed of decisions and milestones;
- Desire to conduct the integration in a way that was as transparent as possible to customers; and
- An overall goal of preserving and building the strength of the brands in their local markets, with the understanding that local excellence is what drives real competitive advantage.
Challenges and opportunities
So... how did the integration go?
The integration, which is now fully complete, was not without its challenges. When two companies of this size merge operations there are inevitably some issues that arise. And integrating two large well-respected brand names in their respective regions attracted considerable media attention. However, as time progresses, and the business settles into the new operating structure, the original intent of the integration is being realized more and more.
So, how did the integration go?
Rapid progress was made throughout 2004 in integrating the two company's administrative and managerial functions into the new operating arena headquartered in Quincy, Massachusetts. By the time the busy December holiday season rolled around in 2004 the most substantial parts of the integration project were complete.
The integrated Stop & Shop/Giant company continues to grow and provide opportunities for its associates and continues to be a leader in the markets in which they serve, satisfying more and more customers every day.