Ahold CEO Expects Outsourcing Savings
Royal Ahold’s CEO said he expects the company’s recent outsourcing campaign to generate savings over the next five years.
Based in Amsterdam, Netherlands, the grocer, which owns the Giant, Tops and Stop and Shop markets in the United States, last month handed more than $500 million in outsourcing contracts to Electronic Data Systems Corp., NCR Corp. and Atos Origin S.A. Since the initial wave of deals, Ahold has awarded a $65 million deal to Fujitsu Transaction Solutions Inc.
Under the agreement, Fujitsu will manage in-store technology such as point-of-sale systems and scanners. The deal covers Stop & Ship and Giant-Landover stores.
Anders Moberg, Ahold’s president and CEO, said the outsourcing deals will save the company 166 million Euros (about $196 million) over five years. In a conference call last week, Moberg said the company will incur some extra costs in the first year of the outsourcing contracts, but will generate savings in years two through five.
All told, Ahold seeks to slash costs to the tune of 650 million Euros as part of its recovery strategy. The company has been working to regain its full financial health since an accounting scandal in 2003.
Next Page: Q1 Labs Eyes Channel.