A very good evening, a very good morning, and a very good afternoon, all of you here in the beautiful town of Zaandam. Thank you very much for coming over and sharing with us the day of today, and thank you also for all of you online, for those who are following us and investing the time to learn more about our plans and about our future growth, of course. Today, you will meet many of our team, and together we have worked hard in the last year in a thoughtful, provocative, inclusive, and dynamic way to think about our future. And in this plan, we have taken a multi-stakeholder approach to bring new insights and diverse ways of thinking.
And at the same time, we are not taking things for granted, grounded in who we are and remaining true to our customer expectations, building strong relationships with our stakeholders. That means also including the financial community and our shareholders. That is extremely important to us. And being able to show you firsthand our people and infrastructure in action at the site visits yesterday in Waalwijk, you have ben there, hopefully and at the stores and at the DC in Barendrecht of Albert Heijn, and this morning at Albert Heijn's flagship store at Gelderlandplein, and our mechanized warehouse here in Zaandam. And this is for us valuable context, and it goes for us far beyond an Excel spreadsheet or a DCF model.
Therefore, I would like to invite you to take this time with us and step back from your quarterly results and reflect with us, think along with us, and as we unpack today, our strategy for the coming four years. And don't worry, all the materials we show you today will be also available on our websites and online. So let's dive in. We have a great schedule ahead of in front of you, and at the tables, we have also provided you some snacks and some energy boosters at the courtesy of Giant Food and Albert Heijn, if you need them. So let's dive in, and let's look at the program of today. I'll start to say a few things more about the group strategy.
Then JJ Fleeman will share more with you about our U.S. strategy, and so does Wouter for Europe and Indonesia. We then have a generous break of 15 minutes, and then we go into the pretty cool deep dives. And there you see, deep dives on people and communities, on own brands, but also on AI and tech. And you will see Natalia and Ben and Karin in action, and also some guest appearances by video. And then Jolanda takes the stage, at the end of our presentations, to share with you our financial ambitions, because those are, of course, also very important to link with the contents, too. And we talk about shareholder returns, and we talk about a few more of those, important KPIs also for us.
We will finish together off with a Q&A session on stage with all the members you have seen talking to you today. I just would like to check with you: Does that sound like a plan? Monique, what do you think? Is that a good plan? Nico, are you okay
Yeah, Isobel , what do you think? Okay, let's go. Operator, start the video, please.
Good morning. We are Ahold Delhaize. We operate in 9 countries on 3 continents. We have 16 brands and well over 7,000 stores, and every day, 400,000 people work hard to serve 63 million customers per week. You could say that we're a big company, and yet we put all our efforts into being small. Because when you're small, you are a part of your local community. You can customize stores on a local level, and when you're small, you can connect with the people you work with. Small. What does it mean? Small means that we take the best local innovations and share them across the world.
From being the first to bring the barcode from the U.S. to the Netherlands in the '70s, and introducing AI solutions to predict shelf life and limit food waste, to having a clear focus on diversity, equity, and inclusion, and a shared love for peanut butter, just not always with jelly. Ooh. Okay, let's continue. Small means understanding our responsibility to provide access to essential products. It's about realizing that everything that happens in society affects us, our stores, and our customers. And that works both ways. With every small step we take, we make giant leaps, helping customers to make better choices by gradually reducing salt, sugar, and fat from products, encouraging healthier and more sustainable shopping baskets, and working together with suppliers and farmers towards a more sustainable food system. Together, we inspire everyone to eat and live better, for a healthier future for people and planet.
When I see this video, it fills me with pride. I think we have a great company. The passion of our people, you see in the video, our leading positions in the markets where we operate, but also the important role we play in society. We'll talk more about this today, and we talked about this quite a lot of things yesterday. With our 150 years of heritage, we are a purpose and value-led company. We have a clear vision. We know who we are, but we also know who we want to be. With more than 7,700 stores, sixteen great local brands, more than 400,000 people, and our track record of innovation, customer centricity, reliability, but also community and connection. That has yielded number one and two positions in the nine countries we operate in.
We win when we focus on elevating brand strength and driving relative market share. And you heard me in the last couple of years, that combination is a very strong combination for us. And this is only possible with trust, and that is why trust is fully embedded in our refreshed vision. Together, we are your trusted local food retailer. And while the economic profile and financials of a grocery company might seem sometimes slow and steady, I can tell you that the daily activity is far from it. Everything that happens in society and in our local communities is felt by us, and that works both ways. Delighting 63 million customers a week requires thousands of decisions daily to ensure healthy, safe, fresh, and convenient solutions for them. So who are our customers?
Well, we are there, and we want to be there for every customer, any wallet, and any cultural background. And that is the role of a full shop traditional grocer. And what do those customers want? They want a quality offer at their fingertips and ultimately great prices that fit their spending power, their budgets. Customers today are very much in tune with what is going on. They are very, very smart. They are well-informed, aware of their choices, and they have high ethical and social standards at the same time. Therefore, there is no coincidence that our growth model is rooted in our purpose: inspiring everyone to eat and live better for a healthier future for people and planet. And you've got this beautiful brochure, where we once more make this also very visible to you.
This purpose extends via our commitment to run our business in a sustainable way, so that future generations can also thrive. This is a responsibility we take very seriously and with a positive can-do attitude. We encourage our leaders to play active roles in forums like the Consumer Goods Forum and others, to increase the dialogue, to share learnings, and to keep our ambitions on healthy communities and planet super high. We know it is difficult, and we also know sometimes it takes longer to achieve our ambitions than we would like. As you saw in the short video, every small step can lead to giant leaps.
The business of food is tough, it's competitive, it's hard work, but it's also fun and rewarding, and when you think about the impact we can make for the better as an employer, as a retailer, as a neighbor, and as somebody you can daily in our stores, for example, can talk to. I'm proud of everything our brands and our associates do in this respect. I'm super proud of them, what they do during COVID, during hyperinflation, during and after the murder of George Floyd, during the Ukraine war, and all the geopolitical conflict. And especially when it comes to food security, which is a passion of mine, ensuring access to food in both good and bad times is often very humbling.
For many years, our company has actively partnered with local food banks, creating a positive impact by alleviating hunger and reducing food insecurity. Throughout 2023, our brands co ntributed for more than EUR 240 million in charitable cash and food donations to local and regional food banks and to nonprofit organizations. Today, I'm delighted to announce that Ahold Delhaize is entering a sponsorship with the Global FoodBanking Network, a nonprofit organization dedicated to hunger relief and environmental sustainability, supporting community-led food banks. As a sizable company with almost EUR 90 billion in sales, it is important for us as leaders to provide the tools, the resources, and the conditions for our people's success so that they can get the necessary support in serving our customers every day, because it's through them, our people, that we, as a large company, can ultimately make a big difference locally.
I've been in this industry now for a pleasant 30 years, and the one thing I know for sure, that success in this business comes down to passion and loving the things you do. If you don't love people in our business, you will not be successful. And the best way to create this is through the shared values we have. This is a filter of how we work and who we choose to work with. And you might know them already, for those who know our company for a little bit longer: courage, integrity, teamwork, care, and humor. And they shape the winning Ahold Delhaize culture we are known and respected for. Our values are our secret sauce, and they are ultimately the synergies we have.
All our brands share these values at DCs, distribution centers, at offices, and in our stores, no matter where you are in our company. So now that you all have a feeling of who we are, let's now get into the detail of how we create value together for you. Since the formation of Ahold Delhaize in 2016, our Better Together and Leading Together strategies have positioned us extremely well. Common in both these plans, and what also will be common in Growing Together, is our philosophy around investments. While a large portion of our capital expenditure is to keep systems running, we leave plenty of space in our budgets to be innovative and to try new things. We were first movers in scaling e-commerce, and the large majority of our customers already have access to a full spectrum of omnichannel solutions.
We are leading in loyalty and personalization, providing billions of personalized offers each month. When we find winning moves, we are not afraid to bet big behind them. We are also rigorous in appraising our returns on investments. We monitor the impact of projects closely in a very disciplined way, regularly reviewing and escalating deviations in a highly structured and process-driven way. We correct things swiftly when they are not working or accelerate when we see success. We also regularly review our operating models to ensure they are still fit for the future. Last but not least, we are also not too shy or too proud to change course when things do not go according to plan, or when we see partnerships with others as a more effective route to give our customers the best potential solution in the market.
To be a little bit more precise, for those of you who are new to our company, let me share a few tangible examples. In innovation, we have built strong anchors in future growth fields, adding in-house expertise and/or partnering with best-of-breed vendors in domains such as digital, GenAI, and automation. In Europe, the investment in Adhese, the opening of the Romanian Tech Hub, and the AutoStore Swisslog partnership you have seen yesterday in Barendrecht show that we cast a wide net when we think about the future. In the US, beginning in 2018, we began an ambiti ous project to consolidate and in-house important aspects of our supply chain, to have more control of our destiny as we innovate and grow.
I'm pleased to say that we are now self-distributed to a level of 85% of our volumes, with only two categories, HBC and frozen, left to do. In terms of operating model transformations, the Delhaize Belgium Future Plan, led by Xavier and his team, and the joint operating model work carried out by Jesper and his team in Central and Southeast Europe, were major initiatives, and both are now close to being successfully completed. Beyond organic growth and efficiency programs, we have also selectively been active inorganically through acquisitions and/or new franchise partnerships, such as, for example, the acquisition of the BI-LO stores for Food Lion, the partnerships and acquisition of Deen and Jan Linders stores for Albert Heijn.
Shortly, we are looking forward to closing our largest transaction in recent years with the intended acquisition of Profi in Romania, which will double our presence in that country in a very complementary way. Finally, we also have been active on the other side, disposing or divesting assets we felt would not yield long-term returns, or where our analysis suggested we could deliver better unit economics with third-party partners. For example, in the U.S., our divestment of FreshDirect, shifting our e-commerce fulfillment operations, disposal of the U.S. meat facilities, or entering into an exciting multi-year partnership with DoorDash for instant delivery, which has already surpassed at the me... in the meantime, already 1 million orders. So what has all this yielded in terms of return, in terms of long-term value creation? Remember, when I talk about this, we are here for, for the long term.
And if I take a step back, considering our investment profile, our mentality to never rest and to be always accountable to serving our customers and winning in our markets, I think the scorecard behind me is pretty compelling. Because looking back, we've grown sales by EUR 22 billion. We delivered almost a 30% CAGR in net consumer online sales. We maintained a consistent underlying operating margin above 4%. We delivered over EUR 8 billion of free cash flow. We realized a 10% compound annual growth rate in our earnings per share and dividend per share. We increased the share of our own brand healthy food sales by seven percentage points.
We reduced our food waste by 37% compared to our 2016 baseline, and we reduced our carbon emissions in our own operations, our Scope 1 and 2 , by 35% compared to our 2018 baseline. This ability to compound growth and cash flow consistently through the cycles underpins the attractiveness, we think, of our investment case. Therefore, as we pivot to our new strategic plan, with the volatile years of pandemic behind us, and as inflation becomes to become more benign, I'm confident we have everything we need to extend our value creation track record and even accelerate it. This is certainly our goal and how this leadership team, you will see and meet today, have concluded on the choices we are undertaking to drive a strong growth agenda towards 2028.
What I would like to do now is give you a little flavor for the rationale behind our choices. Let's step together with me into our growth model. As you saw in our press release this morning, our plans are ambitious. The most eye-catching component, I hope you agree, is to outperform the traditional grocery market and grow at a 4% net sales CAGR, which means, for sure, in this environment, market share growth. The four levers of our growth model are: invest in our winning customer value propositions, densify and grow our markets, innovate for growth and efficiency, and leverage and lower our cost base. These levers are then powered by six strategic priorities, which support and mutually reinforce each other.
The six strategic priorities are, and you can read them faster than I maybe can talk, but are trusted product, vibrant customer experiences, healthy communities and planet, driving customer innovation, portfolio and operational excellence, and very important to all of us, thriving people. JJ and Wouter will do most of the heavy lifting, explaining how this all will work in practice. However, let me share you my thoughts on the biggest of the opportunities in our growth model, the ones that will make a difference, and the ones which we'll be fighting hardest for as a company. Let's start, of course, with the customer. We know that strengthening our competitiveness always brings the fastest and highest return on investment. This is because staying sharp around the basics, delivering trusted products, excellent prices, and creating those vibrant customer experiences.
This is our customer value proposition formula that ensure we can continue to win with existing and future customers. The things we will be pushing here, including double down on our award-winning own brand assortments. While our own brands have served a critical role in our growth path so far, I can assure you the story won't end here, post-inflation. We are doing a lot of great work on our own brands in center store, that means the dry assortments and in fresh, to enable differentiation, offer a wide range of price options, balance our assortments, and support our healthy people and planet commitments. In terms of ambition, we are raising the bar significantly, and to intent, push own brand penetration towards 45% for the entire company by 2028. We will do this by moving faster with cross brands, best practice sharing, and consolidating activities.
We already have a few champions in our portfolio, and you saw for sure one today on private label, who have more than mastered this task, and you will hear from some of them later in the conversations with Wouter and JJ, and some very nice proof points by video. In addition to product, we will also take the next leap in creating vibrant omni-channel customer experiences, and this means in-store, digitally, and any shopping journey, combination of the two. We are leading in loyalty and personalization, providing millions of personalized offers each month. We know that an omni-channel customer spends 1.5-3 times more with us in our most mature markets.
Therefore, by infusing more life and more content and transforming our loyalty systems to lead with digital-first, we aim to drive up our omni-channel sales and loyalty sales up to over 80% by 2028 from a penetration point of view. Along the way, we intend to funnel loyalty customers from physical cards to our digital app ecosystems, which should yield a rapid increase in monthly active users, where we target 13 million by 2028. And this, in turn, will also play an important role in feeding growth of complementary income streams, which I will touch on in a minute. Now, let's look at the lever to densify and grow markets , 96% of our sales today are from trade areas where we are, and with our brands, are the number one or two player.
By prioritizing and optimizing and sharpening our portfolio, you will see a more pronounced and rigorous focus on activating our portfolio to grow customer reach and extend leading positions in our most profitable markets. This is all about quality, quality sales, quality brands, quality customers, and of course, our quality people. Again, I will leave it to the regions to explain how they are shaping up their plans in this direction, but the few call-outs I'm excited are the following: There is a clear and deliberate Stop & Shop plan, which we have already begun executing. Our Belgium Future Plan will shift from execution to growth. Central and Southeastern Europe, including our intended Profi acquisition, will provide outsized growth for the company versus the European peers, as that region becomes a consistent contributor to sales of more than EUR 10 billion.
And our stance on bol has not changed. bol is a gre at asset, and we are remaining confident that it will have a very bright future. We will continue to keep an open mind on the best and most appropriate way to crystallize the brand's value. Now, let's talk about innovation and innovating growth and efficiency. As Ben, my colleague in the executive committee, you will see him later, puts this in a very nice British idiom: Innovation only cuts the mustard when there is meaningful and tangible benefits for our customers. And within this plan, you will again see accelerating capability innovation, accelerating existing business models, and developing new business models for B2C and B2B customers.
And whether that is accelerating our retail, media, and data practices, or using analytical and generative AI in new ways, because we are already doing a lot here, by the way, we will continue to build, buy, and partner to stay at the forefront of industry disruption and transformation. And you will hear later from Ben and from Karin and uncertain and Jelmer, how we are taking a future-back approach from well beyond 2028, to ensure we have the right steps now and in our infrastructure to unlock the full suite of future growth and efficiency potential. While I'm on the subject of innovation, I would like to take a slight detour for a minute to talk about our healthy communities and planet ambitions.
First of all, we are really pleased that so many of you attended our separate healthy, communities, and planet deep dive and dialogue of yesterday. We really appreciated it to share this with folks who are into the topics, have the right questions, put the pressure on us, have the dialogue, and make us also co-create even in a better future. Engagement is, on this topic, is really important to us, and we welcome the partnerships of the financial community on these kind of matters. The reason I bring this subject up is because I passionately believe that innovation, and even more so, innovation is a fundamental part of the solution here. To achieve the aspirations we have on the screen, you'll see that we will embed those initiatives across our growth model and with our strategic priorities, leading and leveraging innovation, data, and dialogue to drive results.
Key areas of focus will be inspiring our customers and communities to engage in positive habits, and supporting our associates to be ambassadors, inspiring everybody to eat and live better. For climate, we are accelerating value chain de-carbonization in our own operations, the Scope 1 and 2, while working with our suppliers to identify and implement initiatives relatively to their business, and also helping them in a Scope 3 type of targets. For nature, we will strive to protect nature and biodiversity by promoting regenerative agriculture, water stewardship, working to stop deforestation, land conversion, and pollution, while we respect people, animals, and their habitats. For circularity, we plan to scale circular models for packaging, for unsold food, designing for re-cyclability, and driving higher valorization of our unsold food. And while getting after these initiatives, we will require additional resources, prioritization, time, and energy.
It's also clear to us that many of them will yield good paybacks and positive business benefits. With that, let's go to the final lever of our growth model, to leverage and lower our cost base. With our size and scale, we are known for ability to deliver consistent operational and financial performance. We are a strong partner for our suppliers and for our vendors, and we have built meaningful alliances with international peers to drive value for our customers and our operations. Examples of these are, for example, in Europe, Copernic, Eurelec, and on a more international scale, our new initiative, W23 Global. Also, we have a strong mentality internally when it comes to cost.
Well above our weight here in future years, which we think is why we are lifting our cumulative four-year ambition for save for our customers to EUR 5 billion. And most of the levers are the usual suspects, and you will get plenty of additional details on these from the regions and in the deep dives. Therefore, I will leave that opportunity to Jolanda to share some highlights and summarize in her presentation, a little bit more details, how we think we're going to make those targets work. So now that I have done the full tour of the growth model, let me spend some time on driving accountability and execution of the plan, and ultimately also on what value Growing Together should deliver for our stakeholders.
Firstly, it starts with thriving people, who are necessary to deliver and deliver our powerful organization, and this is the most important task for our strong, deep and talented bench of leaders across the total organization. I'm proud of our track record with our people, their desire to win, their commitment, and hard work to service and serve communities, especially during the last difficult years of pandemic and then soaring inflation. Those were not easy times in 7,700 stores, DCs, and offices, I can tell you. And today, as you will hear and see from Natalia, we have a highly engaged, productive, and caring team of more than 400,000 people.
We continue to break barriers on diversity, equity, and inclusion, and when you combine this with our ambition to be the number one or two employer of choice in all of our markets, we are investing and putting the tools in place to grow our people and future-proof our organization. In addition, the thoroughness that has come and has gone into defining our strategic choices, we also have paid great attention to how we create shared ownership and to deliver Growing Together. This is clear in our incentive systems, in our ways of working, in our ways of communication, transparently with each other, and I believe we excel in this area. You'll see those details later also with Jolanda's presentation. Before I finish, let me say a few words about our financial ambitions.
As I said in my opening, I believe this is a very compelling set of ambitions, which, on delivery, will yield strong growth in our shareholder returns. We have a strong foundation, and we are ready to set the pace for change in our industry, and this creates an opportunity, and we will capitalize on this. Our 4% sales CAGR to 2028 means we are fully intent and aim to grow faster than the industry average. We also keep our standards on maintaining industry-leading, underlying operating margins. Of course, we will not be penny-wise or pound-foolish. At one time or another, if we need to take additional resources in hand to drive a quick win-win, or to step in to remedy a challenge, we will do so, so that we are always defending our market shares or reinforcing our leading positions.
And given all the important structural work we have behind us, we also do not foresee the need to change our annual gross cash CapEx of 3% as a percentage of our sales between now and 2028. The real fuel for our growth will come from unlocking more efficiency, investing more in our winning propositions, and shifting more capital to even more profitable and more obvious growth opportunities. And all in all, that also means we will continue our path to grow, to grow shareholder returns annually, and which Jolanda will detail as she will wrap up our formal sessions for today. So here it is, our Growing Together strategy, and now it's all about execution. And as you can probably tell, I'm very excited about this plan and all of the work our teams and associates have put into it.
As I said in my opening, now you know the results of our joint teamwork, together with our top leadership in the company, together with our broader leadership in the total group. Growing Together is our new plan that we are unveiling today to the market, to the associates, the 400,000 people around the network. With all of you in the room, too, and many of our stakeholders online following this event, I invite you to join in with us to Growing Together. Growing Together is about care, protecting the legacy of Ahold Delhaize and growing our company with the right leadership behaviors. Teamwork, winning in our markets with our customers, driving market shares, elevating brand strength, and always providing the best assortments, great competitive prices at the freshest and the healthiest products we can find.
Growing Together is also about integrity, being transparent, delivering on our promises, and running our business in a sustainable way. Growing Together is about courage, taking on the big issues in society, collaboration with our partners, and sticking to our healthier communities and planet ambitions... even if and when the path might take longer. Growing Together is also about humor, because humor creates the space for humility, for optimism, for innovation, and for creativity. And finally, Growing Together with your support, our financial community, our community, where our promise is to fight hard to grow, nurture, protect the intrinsic value of our great company and our powerful portfolio of great local brands. Thank you again for your time and for your attention.
I would like now to transfer to our next topic on the agenda, and I would like to introduce to you JJ Fleeman, our CEO of Ahold Delhaize USA.
Good afternoon, and good morning. Thank you, Frans, and I'm excited to be with you today to talk about our business in the U.S. For the past 30 years, I've been in the grocery business and have worked in nearly every part of our business. I've played a key role in more than a few strategic growth opportunities and transformation, like the one that you're well aware of at Food Lion, and I truly believe that the Growing Together strategy really positions the U.S. well to accelerate growth in the future. In the U.S., as you already know, we have a strong, thriving business led by more than 225,000 associates, who are incredibly passionate about making customer connections each and every day.
As we move ahead, we'll leverage the strength of our people and our brands' rich local heritages, alongside the strength of our total scale as we grow and evolve with the customer at the center of everything that we do. Let's take a look at our U.S. business. In the U.S., we have five local brands, what I call five beautiful brands, Food Lion, Giant Food, The Giant Company, Hannaford, and Stop & Shop. Considered together, our brands are the largest retail group on the East Coast. We have $59 billion in sales each year. Our brands serve more than 24 million customers every week across 19 states, through more than 2,000 stores and online platforms. As our brands have evolved over the past several years, we are now truly omni-channel retailers. That's exactly how we're talking about our bus iness today.
As I talk about our brands, I'm speaking to the combination of both the in-store and our online business. I believe that this is really important because it represents the significant progress we've made in the U.S. and is part of our winning combination of local and scale. Through the capabilities that we've built, each brand now has a seamless, integrated shopping experience that builds trust and loyalty across all of our channels. I personally believe this is where the magic begins. This is the power of food re-retailing as we move forward and into the future. Our brands are more than places to shop. As you know, they are really the heart of our communities, and some for more than 140 years. During the most difficult and celebratory times, our stores are the hubs of their communities.
They're the go-to place for people to connect, cheer for, and support each other. We're really at the core of our communities. Being local is really important to us, and these local connections give us a competitive advantage. As we move through the presentation, I hope that you'll hear us speak more about that and learn more about why we feel like this is such a powerful combination. As you can see on the screen, our brands have a significant presence across the East Coast and hold the number one or the number two position in the majority of the markets where they operate. When we combine these leading positions with significant scale, we create winning formulas for business performance. By truly leveraging the combination of local and scale, we have built a robust omni-channel grocery business, and our business is growing.
From 2019 to 2023, we've had growth every year and have maintained over 7% sales CAGR and 43% e-commerce sales CAGR. Additionally, since 2019, 85% of our 54 DMAs have seen positive share growth. Before we move on, I'll punctuate this once more. We have a very strong business today, and we are growing. The performance is built on the combination of trusted local retail brands, our incredible people, loyal customers, and new capabilities, which have enabled our brands to win and take advantage of our highly fragmented markets in the U.S. Trust, passion, and loyalty are words we take very seriously and care about deeply. Our growth trajectory has also been fueled by bold moves we've made to evolve our business.
A few examples: we've built key omni-channel capabilities, like our proprietary e-commerce platform that we call internally Prism, and other native applications. The local brands have also developed a robust click-and-collect and delivery infrastructure across the East Coast that now includes more than 1,600 store-based fulfillment centers. If you think about speed, the importance of speed, just a few years ago, we only had 58. It's an incredible accomplishment from our teams. This infrastructure, coupled with a strong digital experience, now offers pickup or delivery for 99% of our brands' customers across the 19 states. We've executed operational efficiency, something that we're known for, of course, so that we can further invest. We've also transformed our supply chain, as you heard Frans mention, and now have 85% of volume self-distributed through a network of more than 20 distribution centers across the East Coast.
We've taken further action to make the most of our assets, including selling the FreshDirect business and two meat processing facilities in the Northeast. Finally, we've enhanced commercial processes, like planning with vendors, to create strategic relationships to improve cost, trade rates, innovation, but more importantly, to grow the business together. Our focus on operational efficiency and simplification programs has resulted in significant savings over the past four years, and as you hear us talk about this more today, it remains an important focus for our teams going forward. We believe that there's a lot more room to save and to find more efficiencies. Through this work and the capabilities we've built, we've learned a lot as well. For example, our omni-channel customers spend 2.5-3 times more than other customers.
Fulfillment from the store is the most effective solution for us in the US. Personalized value is a critical driver for loyalty and repeat customers, and these learnings will help our brands continue to offer trusted, seamless experiences for customers going forward. As you can see, hopefully, in the images behind me, our connections with customers matter. They are at the center of everything that we do. For example, Guiding Stars, our nutritional guidance programs, make it really easy. I can tell you, on a Sunday morning, when my three-year-old grandson comes, and I can go tell him to find two stars, it makes it really helpful. Shoppable recipes through our Savory magazine are also another way. Options like making shopping more convenient, like Scan & Go Checkout, to name a few, are other ways that we connect.
By keeping the customer at the center of all we do, we build trust and drive loyalty, and that's the beauty of our business. That's the power of local brands connecting with customers and communities. As we now look at the next four years, the U.S. businesses are focused on delivering the Ahold Delhaize growth model and strategic priorities that Frans introduced in his opening. In fact, each of these are at the core of what we do and who we are. We'll continue to grow and expand our business. We'll also expand in markets where we have density, grow our relationships with existing customers, and make smart, disciplined investments. Now, let's take a talk about this in just a little bit more detail. As you can see here on the slide, we will leverage both our local connections and our scaled opportunities to expand our portfolio.
While our brands lead in the majority of their markets, it's important to note that there's still significant room for growth. Over the next 4 years, we'll increase brand strength and density by remodeling and/or adding more than 1,000 stores. We will strengthen our value proposition by investing over $1 billion in price, while at the same time expanding digital relationships and e-commerce capabilities. We will lead, we will grow, and we will differentiate in own brands by aligning our assortment to leverage scale and to innovate, to get to the core of what customers need from our brands, and I'm really excited about this opportunity. We'll talk more about it later. It's a significant opportunity for us.
We will drive complementary income streams through opportunities like retail media, and we'll build new digital and e-commerce capabilities to achieve our ambition of 50% digital engagement by 2028. And finally, we'll continue reducing operating costs through robust efficiency programs. These moves, along with others, will earn us the right to win with our customers and in the marketplace. Here's a look at what to expect for each brand. Food Lion, a powerhouse brand, already strong, will further accelerate growth through focused market expansion, including an enhanced omni-channel remodel program. Food Lion will build density with new stores in key markets and expand their outer edge reach, and Meg will share more on Food Lion's growth plan shortly.
Likewise, gains in market share and strong brand reputation, as I'm sure you have heard and hopefully experienced, give us confidence at Hannaford to invest and grow through targeted remodels, new stores in high-growth areas, and expansion on the outer edge of Hannaford's footprint. In the Mid-Atlantic market, The Giant Company will grow with a focus on maintaining its leading market positions and increasing density in key markets, along with targeted remodels and price investments. Also, at the same region, Giant Food will build on its strong heritage through strategic investments in price, private brands, and remodels. Stop & Shop has done a thorough evaluation and is focused on ensuring a stable and thriving future, which includes investments in price and customer service, along with optimizing the portfolio to focus on core markets where it can win.
Finally, we'll go into more detail today about three of our brands, Food Lion, The Giant Company, and Stop & Shop, to show a few examples of how our focused portfolio approach will solidify brand strength through each of our regions. I'd like to now take a bit of a time to listen from Meg Ham about how Food Lion continues to grow by serving its towns and cities.
Thanks, JJ. Hi, I'm Meg Ham, President of Food Lion. At Food Lion, we rely on a disciplined approach to move our business forward. Our brand, strategy, and culture guide our assortment enhancements, growth plans, pricing strategy, and the customer and associate experience across our 10-state operating footprint. We hold the number one or number two market share position in many of our DMAs, especially in our most dense markets. Our strategy, easy, fresh, and affordable, you can count on Food Lion every day, is the expectation for how each store meets the needs of customers in the towns and cities we serve. When it comes to assortment enhancements, we leverage our ric h internal data, along with marketplace data, to reflect evolving trends and changing customer needs. Relevant assortment is essential to achieving our strategy.
We're especially focused on expanding our produce and home meal solution offerings to better meet her needs. By partnering with local suppliers, we provide unique local items customers expect from their neighborhood Food Lion. As an omni-channel grocery retailer, Food Lion also delivers a seamless experience for our customers, whether they shop in store or online. 100% of Food Lion's operating footprint offers Food Lion To Go pickup and/or home delivery, allowing customers to shop whenever, wherever, or however they choose.
Through remodels, Food Lion introduces a modern experience with relevant and enhanced offerings that deliver consistent growth in sales per store. Our remodels create the platform to evolve the store experience and consistently generate strong return on investment. In addition to remodeling existing stores, we'll accelerate new store growth and brin g a differentiated shopping experience to even more communities, especially those where the population is expanding.
In fact, Food Lion operates in some of the fastest-growing markets in the United States. Market share has grown over time, and Food Lion is well-positioned to continue driving growth by delivering sales and creating customer loyalty. Food Lion has a long-standing heritage of low prices and convenient locations that are easy to shop. Because price is our core equity, we prioritize making price investments to maintain our low price position and perception inside the marketplace. Our industry-leading and award-winning MVP customer loyalty program, launched in 1995, is one of the very first in the retail industry. Customers can take advantage of great everyday low prices and weekly promotions. Our digital Shop & Earn program has saved customers millions of dollars with personalized offers. The more customers shop, the more they earn. This drives return trips, customer loyalty, and brand equity.
Based on our disciplined approach, comprehensive strategy, and operating footprint, Food Lion is poised for continued growth. Every day across our 1,108 stores, Food Lion's 82,000 associates are fiercely passionate at putting the customer at the center of all we do, bringing our brand, our strategy, and our culture to life. We have a proven plan that's delivering outstanding results, as evidenced by our recent achievement of 46 consecutive quarters of same-store sales growth. All of this gives us strong confidence in our business today and into the future.
I hope you found that pretty exciting. I'd like to thank Meg and the entire Food Lion leadership team. Food Lion's growth story is incredible, and it's unprecedented in our industry. I'm excited about our ambitious plans for Food Lion and the brand over the next four years, and I'm absolutely confident that Food Lion will continue to win. Next, let's take a closer look at The Giant Company. Just like Hannaford, which you've heard about on our most recent quarterly call, The Giant Company has an incredibly strong regional presence and loyal customer base. John and team, who just celebrated their 100-year anniversary, has built a really strong, durable brand that fulfills its customers' core needs of saving time and money. But it has an opportunity to further increase density and reach in the Mid-Atlantic region.
The Giant Company has seen great success in two primary states, Pennsylvania and Maryland. Thanks to the brand's work deepening relationships with customers through personalized offers, in-store service, fast, convenient delivery, and value, the brand now has the highest NPS score in its 100-year history. The Giant Company has also increased its e-commerce sales penetration nearly 40% since 2022. Its Choice Rewards loyalty program has helped fuel these results. Millions of households participate in the program, which now accounts for nearly 9 0% of all transactions. I think it's pretty cool, but imagine the possibilities with this program when you start to really connect with families and communities to save them money, but more importantly, to help them in everyday life. The Giant Company is also achieving historic returns as they remodel their stores to be fresh, modern, sustainable.
Last year alone, they remodeled 29 stores, and this trend continues. To enhance customer value and to further grow, the Giant Company will strategically invest in price and explore, explore new stores and formats in its region. I look forward to seeing the Giant Company continue to win in markets. Next, let's take a look at Stop & Shop. Stop & Shop, located in the northeastern part of the U.S., has a rich heritage and holds a strong market share position despite fierce competition. As you already know, Stop & Shop has strong real estate positions, locations, and markets with close to 400 stores across seven DMAs. While there are many examples, I'm excited to share just a couple with you of the investments that we've made in Stop & Shop since 2018.
We've now completed more than 190 remodels with many customer-focused upgrades. The remodeled stores are outperforming the non-remodeled stores. They've worked to strengthen their value proposition, both online and in store. They've expanded digital capabilities to further enhance their already strong e-commerce experience. In fact, Stop & Shop ha s the highest e-commerce penetration across all of our five local brands. They've enhanced GO Rewards, its loyalty program, and other programs to grow digitally engaged customers. Lastly, they have driven operational efficiency through supply chain cost reductions, programs, and through new technologies like RELEX, which is our forecasting and replenishment system. That's not enough, and it's not where we want to be or need to be. As Stop & Shop embarks on its next phase, we will be decisive and take deliberate and appropriate actions to ensure a stable future for the brand.
We will use the learnings from the past several years, especially the last 12 months, to make improvements. We're moving forward confidently in three key areas that I'd like to talk about. The first is we're going to improve the cost structure of Stop & Shop. Second, we're going to optimize the store portfolio. Third, we're going to celebrate and delight customers through CVP improvements and differentiation, starting by intensifying our price investments. More specifically, Stop & Shop will have a relentless focus on operational excellence and efficiency at every level of its organization. This will include a more efficient organizational structure, along with a focus on quality, fresh products, well-stocked shelves, further supply chain efficiency, and fantastic service in each of its stores.
Stop & Shop will focus on the markets that are most important, including those where the brand has strong density, holds a strong market position, or has stores that are performing well. Stop & Shop has already evaluated its overall portfolio and will make difficult decisions to close underperforming stores to create a healthy store base for the long term and grow the brand. As we talked about, customers are already responding positively to Stop & Shop's remodel program. As Stop & Shop now begins to optimize, the brand will use those learnings to deploy a more efficient use of capital as we further the remodels. The value proposition and pricing at Stop & Shop are simply not strong enough. We will improve the end-to-end customer experience, value proposition, started with a large multi-year price investment. While price is critical, we will differentiate the CVP across multiple dimensions.
These investments will be fueled by leveraging scale to lower cost, streamlining operations, and creating efficiency, not only at Stop & Shop, but across the entire U.S. By making these moves, we are confident Stop & Shop can contribute even more to the U.S. business. So that's about a few examples about our portfolio. Now, let's take a look at how we'll enhance our winning customer experience to grow trips and baskets across all of our brands. Our brand's customer value proposition includes three key areas. The first, fresh and unique assortments available in every shop. Second, personalized value every day, both in stores and online. And third, one-of-a-kind, convenient experiences across the full omni-channel shop. Offering customers, as you know, fresh, local, healthy, and sustainable assortments is something our brands already excel at. Having the right everyday local assortments builds trust and connections with our customers.
At the center of each brand's assortment is their own brand offering, which we'll talk more about later. Already a strong business today, 95% of our U.S. baskets already have an own brand item product in that basket. Across our total store, we offer nine own brand labels that span categories across the entire store. In fact, you're likely aware, I hope you're aware, of Nature's Promise, which is one of the nation's best organic brands. Going forward, we'll have a clear opportunity to lead across all of our own brands, like we've done with Nature's Promise. You'll hear more about the importance of own brands and, more specifically, about the plans for own brands in the U.S. from Peter, here shortly.
In addition to continuing to expand and cultivate a compelling assortment, we will make a landmark $1 billion strategic price investment in our U.S. brands over the next four years. In an environment where customers are watching every penny, this will enable our brands to offer incredible value to their customers. Alongside the price investment, our brands will strengthen their award-winning loyalty programs. We will also continue to deepen relationships with customers by delivering value that is most meaningful to them, from personalized pricing to promotions. As a result, our digital customer engagement will be more than 50% by 2028, which, of course, will contribute to our goals of increasing omni-channel loyalty sales, as you heard Frans talk about, and also our monthly active users. Another area that will fuel our growth is the use of technology, data, and AI.
As you'll hear in Ben's presentation a bit later, technology and data are at the core of delivering for customers in the U.S. and around the globe. In the U.S., we've invested in the right set of digital capabilities already to create seamless, tech-enabled experiences. We will build on this to drive further personalization, flexibility, and delight, and convenience that will increase customer connections. Underpinned by technology, we'll continue to build new omni-channel features and functionalities that will drive growth. Building on those digital and tech capabilities, I think, and we've committed, to have a large opportunity to grow complementary income streams, like retail media. We're well-positioned to do this because we know our customers well, and we know what's important to them. We've taken bold moves to accelerate the growth of our retail media business already.
One of those bold moves was bringing our retail media platform in-house last year. Since making this transition, we've increased retail media income by approximately 30%, significant increase. To further grow in this area, we will create unique, shoppable content across channels and leverage innovative technologies for a truly connected shopping experience. As a result, customers will receive inspirational, hyper-personalized content that makes shopping fun. That's the power of the connection, but the beauty of our focus in this area is to provide a better customer experience so that they get more value for their money, that they have a better experience in their stores, and we continue to expand our brand's permission sets with customers.
Imagine the potential of this when we combine this with our already award-winning loyalty programs and the significant value propositions our brands have in the U.S., along with the significant price investments that we're going to make. And I think that's a great segue to our next topic, operational efficiency, one that I'm super passionate about. Strong operational efficiency will also be critical to help us fund and to grow all of our business and to keep top of mind for our teams. As you know, we've already demonstrated our ability to generate these dollars over the past several years, but we're even more confident that we can drive even more savings and further efficiency. First, we'll continue to simplify and streamline our U.S. operating model to remove redundancy, to deliver the absolute best customer experience each and every day.
Second, we'll drive efficiencies in our supply chain and e-commerce fulfillment by improving operations and pivoting to more store-based fulfillment. Third, we are investing in technology and AI to create greater accuracy in our operations while reducing cost. And finally, as you'll hear from Jolanda, efficiency and effectiveness is key to freeing up the funds our brands need to fuel more growth. In the U.S., we're committed to unlocking savings to reinvest in our customers. Now, before I close, I'll say a few things on our commitment to our communities and our people. As I said earlier, our brands are at the heart of the communities that they, that they serve. That relationship is critically important to us and is at the core of each of our local brand strategies. Our teams make that connection every day... A few examples of that, hopefully, you've experienced some of it yourself.
We've donated more than 1 billion meals since 2020. We offer fresh and healthy assortment to all customers and associates, and we're committing to sustainability ambitions across the entire value chain. I'm super passionate about our people. Our people are what really makes our company. In fact, it's one of our key parts of differentiation across all of our brands at Ahold Delhaize. We remain committed to being the best place to work in food retailing and beyond. Among our teams, hopefully, you've seen we have a highly disciplined approach to managing the business every day, driven by precision, accountability, and doing what is necessary and right to grow our brands. In Natalia's presentation, you'll hear more about the importance of people and communities. As you've heard, in the U.S., we've already cultivated customer connections and leveraged the significant scale of our businesses.
These customer-centric experiences are the foundation for accelerated growth through the Growing Together strategy. As we move forward, I'll close by summarizing what you can expect from the U.S. as we go forward. First, I hope you've seen that we have big plans for all of our U.S. brands. We will make strategic investments in each of our businesses, with a focus on growing in markets where we have the best chance to have the biggest impact and generate the best returns. We will take decisive and deliberate actions, starting with intensifying our price investments to solidify Stop & Shop's position. We will further accelerate growth at Food Lion, which already has 46 impressive quarters of consecutive growth.
We will invest in price, remodels, and market expansion at The Giant Company and at Hannaford, and we will build on the already strong heritage of Giant Food with continued investments in price and remodels focused in the Baltimore and the Washington, D.C., markets. The combination of these actions account for opening and/or remodeling nearly 1,000 stores over the next four years. We will lead, grow, and differentiate in own brands by innovating and aligning them across our local brands in the U.S. to better leverage our size and scale, but also across the entire group. We will also make a landmark $1 billion investment in price over the next four years to strengthen our overall value proposition, fueled by continued cost reductions. And we'll grow complementary income streams, prominently through retail media, while we expand our digital and e-commerce capabilities.
All together, and truly aligned as one connected team across Ahold Delhaize, these moves will continue to earn us the right to win with customers across a highly fragmented marketplace in the U.S., and I look forward to sharing our progress with you as we move forward. A quick invitation for anyone who lives in one of our brand's geographies, come in for a visit. I look forward to letting you see our Growing Together strategy firsthand. We're proud of it, and we welcome the chance to have you experience it with us. You'll listen to a lot of things today, but I'd like to leave you with one thing. One thing that I'm very certain of is we're going to grow, and we're going to win. Thank you for your time. I'd like to turn it over now to Wouter to talk to us about the European business.
Thank you. Thank you. Welcome, good afternoon or morning, or evening for the ones on the video. I hope that I can still capture about 30 minutes from you before we have a break, because I think you already got a lot of content from Frans and from JJ. I must say, JJ, when I see Meg talking so passionate about Food Lion, I always get super excited, so I'm looking forward to see her again in June when we are visiting with the board. I can assure you, we have a lot of these passionate people working at Ahold Delhaize. That makes me also super proud.
I also want to thank you, JJ, before I start, of your performance of the last quarters, because in Europe, we had Ukraine, we had hyperinflation, we had high energy costs, we had big, big changes also in Europe. The U.S. performance has always been very steady and solid, and so as a group, we can really compensate each other as well. So that's also the strength of the portfolio. Before I start with the story, maybe it's good to start with who we are as Ahold Delhaize Europe and Indonesia. We are 11 exceptional local brands with a very rich history, and I could throw a quiz at you, because in Europe, we have the oldest brand and the youngest brand. Is anybody still awake?
Does anybody know who the oldest is and the youngest? Sorry? No, Delhaize is the oldest. It's, it's about 160 years, and bol has just celebrated its 25th anniversary two weeks ago. So this is a very diverse portfolio of very much and strong existing brands, and also a family of 175,000 associates, which serve our customers every day through our stores, and which amounts to about 5,600 in Europe. Last year, we also announced the intention to welcome a new comer in our portfolio, Profi, and welcome to our central southern eastern business in Romania, which I will call later on in the presentation, the CSE group.
Each of our brands has a strong local identity, and this is coupled, of course, with regional scale, and this combination is unique for our success in the past and in the future. Our portfolio vision is quite simple: We would just like to be the number one or the number two in every market we operate in. In these volatile times, we have grown our omni-channel capabilities while adapting to changing consumer needs. We have proven our resilience and our commitment to serve our customers and partners. This has reflected in our annual sales growth in Europe of 7% since 2019, which is significantly higher than the average of 3% across many of our competitors.
Since 2019, our store footprint has grown with 3% on an annual basis, and our e-commerce penetration has moved from 9%- 4% versus 2023. Our market leadership is built on highly concentrated investment program, and we have the capabilities to support our ambitious strategy. I would like to highlight a few success stories of the last years. Firstly, we provide excellent value to our customers. We have introduced approximately 2000 Price Favorites in each of our brands, which is a total of around 7000 unique SKUs in total in Europe. These match, and mind you, these match hard discounters in terms of price and also in quality and in design.
Secondly, we have increased our e-commerce penetration 1.5 times since 2019, and we have launched and grown our e-commerce offering across all our markets, because when we started, we didn't have e-commerce everywhere. Thirdly, we have introduced a very comprehensive loyalty program in all our markets as well, and I will talk about them later because they are very important for our future. We have funded these initiatives through our comprehensive Save for Our Customers program , which has grown every year by 15% since 2019, when we started the program. Next to that, we have been investing continuously in our infrastructure. Many of you here visited a couple of beautiful centers yesterday and today, for instance like bol Waalwijk fulfillment center.
And this is one of the most sustainable logistics buildings in the Netherlands and for Belgium, featuring a solar roof, numerous innovative and new packaging machine, also to help to reduce the carbon footprint and also carton and miles of conveyor belts and an enormous automated shuttle system as well. Also, at Albert Heijn here, we have a warehouse in Zaandam, which is another example of how we are deploying a state-of-the-art mechanization capabilities to boost productivity, and I hope some of you have seen that. Another exciting one is the recent innovation at our warehouse in Barendrecht. This is a fully automated Home Shop Center, which is really on schedule to deliver the productivity levels that we have aimed for. Let's have a look for the video.
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And this is also one of our partners, Swisslog, as Frans talked about. But last but not least, we've also developed our complementary income streams, including in-store digital experiences like you see behind me. Frans also mentioned in his opening, our Growing Together strategy ensures that we execute our purpose while delivering on our health, on our financials, and our healthy communities, people, and planet commitments. We have everything we need to drive further success by leveraging our strength. So why do customers love our local brands? First of all, we are a purpose-led organization. We inspire everyone to eat and live better for a healthy future for people and planet.
Our purpose-driven approach is something both our customers and our associates also really love, and I am personally very proud that we are the employer of choice in most of our markets, and where we consistently rated as top employer with high associate engagement scores across all the brands. Second, once we get something right for one of our brands, we leverage that success across the whole group, where we are able to unlock additional value by leveraging this regional scale in several areas, including the technology, which Ben will talk about. And finally, our brands are deeply local and cater to the unique needs of customers in each market. Whether it's a strong focus on local assortment, personalized engagement, or our deep commitment to local communities, we take immense pride in delivering differentiated local experiences.
Let me now show you how all of this comes together with our growth model for Europe, starting with our winning CVP. This all starts with getting really close to the customers, and this is also what I meant with the loyalty programs. Our ambition in Europe is to really increase the monthly active app users. This deeper engagement is the gateway to building stronger omni-channel relationships with our customers. We have brought our loyalty programs, all of them, onto our apps and into, and able to engage more deeply with our customers and offering better personalized offerings than competitors do. And for example, Albert Heijn, who started years ago with the Bonus program, has now 4.5 million monthly active app users, of which 1 million are member of the Albert Heijn Premium part.
30% of our sales at Super Indo in Indonesia are made by members of the My Super Indo loyalty program, which was only started three years ago. In Greece, more than 80% of the sales of our Alfa Beta brand are made by our 1.1 million loyalty members. This is something that differentiates us from discounters and from other local brands in our markets. We believe that the future of customer engagement will be highly personal, social, and very gamified. To that end, we are growing our engagement, engagement capabilities even further. I have a nice example for you. We are also introducing for Albert Heijn cardholders to pay for all their groceries, both online and in-store, with their digital wallet.
And this wallet contains all the saving programs like Air Miles, but also the famous Koopzegels, and the Dutch people among you might still remember it from sticking real zegels in a little booklet. We've made it digital, and now a lot of customers are using it, and they can use it as currency to pay for their groceries. This is a real option that boosts convenience, loyalty, and of course, also our ability to cross-sell other products. But let's move on also to our offerings. Here, own brands play a critical role. JJ talked about own brands.
We will have a own brands deep dive later on, but own brands will help us to differentiate better by allowing us to give customers product that they love faster and much more effectively and efficiently than the CPG companies can do, because we own the retail chain. By tailoring our own brand offering to each of our markets, they can also become a vehicle of localization and innovation, which are really a key for our winning CVP. This includes also value options for local delicacies and creating an assortment that is better for our customers and better for the planet. For instance, at Albert Heijn, and you've maybe seen it at Gelderlandplein, the huge range of our own brands, but especially also the bio range, which includes almost 2,000 options, available.
At Delhaize, we are continuing to remove plastic to be more planet friendly. For instance, our own brand cheese range, we have reduced plastic in our packaging by almost 60%. Secondly, it allows us to drive healthier choices and to make this easier for our customers through products like our meal kits, fresh soups, and ready-to-eat meal. And thirdly, and lastly, we continue to offer great prices for our customers through our best value offering across our brands. We ensure our Price Favorites have a local name and flavor in each market. For instance, here in the Netherlands, we call them, Price Favorites, but in Belgium, they are called Little Lions, and each brand has their own way of communicating this, to the local customers.
But let's move on to another critical element of our CVP, the role we play in leading the transition to a more, a healthier and more sustainable food system. Leading health efforts in this area has always been in the DNA. This is not something we started a couple of years ago, but already many, many years ago, and we were very aware of our role, and it's also really a part of our DNA. And it's also very important for me as a person, that we take the responsibility that we can. We prioritize three critical areas. The first is supporting customers to make healthier choices. For example, the SuperPlus loyalty program at Delhaize is unique because it gives our 3 million loyalty customers 10% discount off all the healthy and fresh items with a Nutri-Score. In the U.S., we use Guiding Stars.
In Europe, we use Nutri-Score of Nutri-Score A and B. With, for instance, in Czech Republic, with the myAlbert app, customers can save 15% on healthy food. Secondly, so besides price, secondly, we offer more and more low carbon footprint products. All our brands in Europe will commit to establish a baseline of their current protein ratio and setting a target by the end of 2024 for 2028. Here, we will take a huge step towards the transition to more plant-based protein. I'm also extremely proud of our teams taking on this massive challenge, which is quite unique in the European market. Then thirdly, we also work closely with our suppliers and our farmers to achieve net zero across the entire value chain by 2050.
All our European brands' C limate Hubs, which we have developed ourselves, where our suppliers can learn more about how to reduce emission. We are also closely collaborating with our farmers to reduce scope, their Scope 3 or our Scope 3 emission, by the program, which is called in Dutch, Beter voor Natuur en Boer. This program we've developed at Albert Heijn, we've also opened this up for all the competition to join forces in order to help the society to move closer and to a lower carbon footprint. So I have just explained our efforts to improve our CVP. Let me now talk about how we see our brand portfolio today and in the future. In the Benelux, as you know, we are the number one retailer in food and non-food.
Albert Heijn, where you are here currently, leads the way in innovative retail with a strong omni-channel, multi-format network. Our high level of digitization is evident through self-scan technology, electronic shelf labels, and our digital screens in all our stores. At Delhaize, the team of Xavier, they have taken on the challenge to turn around the operating model to meet local challenges and opportunities, and which is going quite as planned. Are now 100% affiliated store network, positions as well for the future growth, while retaining a very strong connection with the affiliates. Moving on, bol, led by Margaret, is also a powerful brand in our portfolio, whose financial performance is accretive to our growth and to our return on capital. bol's journey, if you look back, when it started with Bertelsmann Online, has been quite spectacular.
At transforming from a simple online bookseller in 1999, to a multi-category, full service marketplace and platform as it is today. We are nearly twice the size of the nearest competitor in the Benelux, as Frans already mentioned, and we have built a very strong brand over the years. Our business is balanced, with half our business today coming from the platform and half of our own retail. We serve 14 million customers and have 50,000 and growing partners, which all find each other at our bol platform, our bol app. This is a very rich first-party data on sales and consumer buying behavior, which is, of course, a huge asset to our ambitious monetization plans. bol is also a constant front runner in sustainability.
I don't know if you're aware, but last year, bol received the B Corp status, which is the gold standard for sustainability of corporates. bol continues to play an important role in our portfolio, providing complementary skills and knowledge to our grocery business, and also helps us to diversify our portfolio. We are very excited to see what the next 25 years and beyond will hold. Now, let us move on to the fastest-growing part of our portfolio. Over the last year, we have built a strong and growing portfolio of the CSE brands under the leadership of Jesper. We have created a setup for success by harmonizing our operations, and by doing so, we are also able to leverage the Benelux model to deploy and scale best practices very fast in the CSE region.
For example, we have expanded our Perla, which is one of our oldest own brands, and it's almost 130 years old, and also Delicata ranges in CSE. We've also took Nature's Promise from the U.S. and implemented into CSE. We've also deployed Gambit, which is our group monetization technology that is part of the company of Adhese, where Frans was talking to, and we started now to deploy that in Alfa Beta to professionalize our monetization capabilities, and we will do that across the region. But we have also harmonized almost 70% of our store equipment in order to reduce costs across the region. We've also taking on the challenge of making our brands more relevant for our customers. One example is also the successful Price Favorites approach in...
And as you might know, in CSE, is a very heavily discounted and dominated market, as a very successful approach. And lastly, we have created enormous community impact. For instance, Albert is the only food retail company in the Czech Republic to be in the top 10 ranking for sustainability. Mega Image in Romania was the top employer in 2022 and 2023, and has won various awards for sustainability and energy efficiency. Maxi, in Serbia, has won awards for being the top and most inclusive, employer, as well as the customer's, favorite online supermarket in 2023. And these awards are a testament to our investment in the region and the fact that we've been creating real leading brands, in that region.
Now, I've given you a flavor of the different parts of our portfolio. Let me talk about how we drive synergies and scale across the region. As a EUR 34 billion company, we can leverage our volumes to unlock sourcing opportunities. We source better and more economically through alliances, which we, after the merger, started with Copernic for A Brands and AMS for own brands. We have scaled our strategic partnerships on fresh products, which are now handled by the same partner across Albert Heijn and Delhaize, and we have harmonized more than 50% of our not-for-resale purchases, and they are done centrally. Finally, our regional setup allows us to export best-in-class retail technologies across our portfolio.
We have rolled out our self-checkout technology, our AI in-store digital capabilities, like screen and shelf labels, and we have unlocked that with a speed and efficiency that the customers are really benefiting from. Now that you have heard about our winning CVP and our world-class digital capabilities, let me tell you about how we will further densify and grow our position in the region. In the Netherlands, with a strong market share on both food and non-food, we will continue to level up our capabilities to drive growth at a higher share of wallet through more personalization, and in addition, we expect to see more growth in new models, like which we've just done with Jan Linders affiliation, which Frans also mentioned.
With Bol, given the slower macro environment, we are exploring new growth curves and opportunities to make our organization leaner and more efficient. For example, we are testing new B2B services and circular business models, which we believe can deliver fast growth and high margins. In terms of monetizing bol, as Frans mentioned earlier, we will continue to monitor the environment, but for now, our focus remains on enabling bol to continue to thrive. In Belgium, from a store perspective, the team is close to switching from execution to growth mode. We are well positioned in Belgium with Delhaize and Albert Heijn in food, and of course, bol in non-food. We will accelerate investments in our CVP to grow all three brands more profitably.
The CSE, as I already mentioned, will be a major force for growth in the future. Our focus for now is to successfully complete the announced acquisition of Profi, which is, of course, subject to conditions, including the merger clearance under the applicable competition laws and regulations. What we like about Profi is that it extends our customer reach and brings us to parts of the country, where we are not currently present, and we are not currently serving. Profi will double our size and bring us to the desired top two position in Romania. Historically, we were adding roughly 80-90 stores per year in Romania. Profi will give us a ten-year boost by adding nearly 1,600 stores. The strong format fit and the complementary customer propositions between Profi and Mega Image will allow us to serve an even more diverse set of Romanian customers.
The deal is expected to to be sales growth and EBIT margin accretive to the Ahold Delhaize Europe business and EPS accretive to the total group after synergies. Now, let me talk to you about another exciting source of growth: innovation. Europe will be a significant contributor to Ahold Delhaize complementary income streams growth will which will reach approximately EUR 3 billion for the group in 2028. We have already grown this since we started in 2021, five times. Our retail media model leverages our omni-channel approach to capture traffic from both online and physical stores. This results in more personalized offers for customers and higher conversion rates for advertising, advertisers. To achieve this, we are partnering, building, and acquiring technology and capa bilities.
Our investment in advertising technology company Adhese, which we have done, started a couple of years ago, and of course, we can use our existing network of 10,000, mind you, 10,000 in-store digital screens across Europe, which really demonstrates the commitment to this strategy. We're also looking to use innovation to better leverage our large customer base, which we have everywhere, thanks to our loyalty programs and our current existing infrastructure. For example, bol is working on new business models to make sustainable shopping easier, as I was mentioning earlier. Albert Heijn is exploring ways to convert waste to value, such as up-cycling waste streams with other partners, and we've also started to offer vehicle charging stations in our parking lots at Albert Heijn and Delhaize for our customers.
Examples I have used capture our ambition to drive business growth, but also with the spirit of our purpose. As you can see, we have a tremendous number of growth opportunities. So now, how are we going to fund all of this? Would Jolanda ask me, "Wouter, how are you going to do that?" Well, we are also super committed, just, just like JJ, is to do our part in our Save For Our Customer group ambition of the total of EUR 5 billion. And, JJ, I think we split the ambition half/half, didn't we? EUR 2.5 billion, EUR 2.5 billion. That was the plan. Now, to do this, and we have already been doing this for the last couple of years, but we really wanna up our game. Firstly, the first part is to take our sourcing practices to the next level.
An essential part of the sourcing contribution will be done through a collaboration with others. And also here, the just announced collaboration on Eurelec is very critical, and also, of course, a further harmonization of our private label offering will help to achieve this goal. Second, to future-proof our operations, we are also implementing automation, and you've seen some examples here already, today and yesterday, and also AI across the region. And you will hear more about how technology can help us also to operate more efficiently with Ben later on. And finally, we are also deploying new models to maximize efficiency, including the very successful affiliate model in Belgium, but we also have it in the Netherlands, we also have it in Greece and in other countries.
And we expect that this affiliation model will account to more than about 30% of our sales in the future. So bringing this all together, I'm extremely proud of where we are today in Europe, driven by our strong teams and front runner mentality. I am very confident that our Growing Together strategy will ensure that we do what we do best, is win with our customers and deliver on our promise, inspiring everyone to eat and live better for a healthy future for people and planet. I'm also very confident because this is my third capital market day or strategy day, that and as some of you know, that will be my last one.
But I'm also very confident that the team will carry this ambition forward, because we have a very strong team with Marit for Albert Heijn, Xavier for Delhaize, Margaret for bol, and Jesper for CSE, to take this challenge on and to achieve the results in the future. So I wanna thank you very much for your attention. You really deserve the break now for 15 minutes, and we will call you back. But thank you very much and see you later. Thank you.
What we've done is focus on everything that's happening now and will happen in the future.
Like, what should we do differently tomorrow or in 10 years?
You need to have a vision. You really need to show to the outside world where you're going to be at.
I think we need digitalization, but I think we also really want to focus on the human side. We worked from efficiency to focus on the experience.
You get some education, you get some inspiration. I can taste something, I smell things.
Like really focusing on the good and healthy food. It really touched me about what kind of shift we are making within 10 years.
More value, more responsibility, healthier on your end, have less hassle.
We all need to believe in this to actually make it work. Welcome to the super market of 2034.
So welcome back. I mean, 2034, is it far away for you, or is that quite close by still? Or do you believe this is 2044, or this is next year? I think those are interesting things for all of us, to look at, and that's why, with all the knowledge and strength we have in our teams and a lot of bottom-up talent in our company, who can sometimes see the future clearer for us because they are well-educated or a different type of generation too, we try to read the future a little bit, and this looks pretty cool to me, I must say. That's what I said in my opening, we would like to go with you a little bit and jump forward.
Step away from the short term and jump into the future together and think a little bit about long term, where does this all go? And it's not only about technology, but where does the climate view go? Where can we help customers with complete new technologies to, to fight food waste and all these kind of things, but also a little bit imagine where the future is heading for. And while we have a strong foundation in our markets as hopefully also JJ and, and Wouter has, have made very clear to you, with a strong base in the markets where we are in strong positions, we also know that the pace of change across our total industry continues to accelerate.
That is pretty cool, but we also would like to look this through the lens of the consumer and of the customers. We see long-term customer preferences, which you sometimes can read, in ten years we didn't believe that was coming, and then it came much faster than we thought. So the rate of technology change, that is not slowing down, as we all see. Automation, Internet of Things, GenAI, are key themes, we need to keep an eye on and to have the hand on our pulse where it is moving, because otherwise we are too late.
And when it is more seamless or effortless shopping, hyper-personalization to give you the best potential offer, completely fitting to your needs, or the dynamics of an aging society, which is in most of the mature markets, the case, or the increased consciousness about health, sustainability, or the community, we need to stay very, very alert to these kind of developments. And to understand the consumer shifts and to take advantage with our learning with our great local brands. And to showcase this, we selected four deep dives for you, and yesterday we had a very good deep, deep dive dialogue on sustainability, and I hope you also enjoyed it from your side.
I'm with the team, very very grateful and open for these kind of dialogues and candid discussions, because you come from different angles, and you look at different angles and industries on sustainability, and we only can learn where the dialogues are, and we only can help each other where the dilemmas are, because it's not an easy topic when we talk, for example, about Scope 3. But let's now go to the next three deep dives. Great businesses thrive with great culture, great products, and the agility to move fast to capitalize on disruptive technologies. So with that, let's kick off with great culture, and welcome Natalia to talk about people and communities. Natalia, please.
Good afternoon, everyone. Good morning, good evening. Great to have you here. I will start by saying what is my favorite part of working for Ahold Delhaize? Well, in addition to working with great people who are here with us today, my favorite part is to be able to make a difference for 400,000 people and millions of customers each day. Frans, JJ, and Wouter have spoken to you about the strengths of our business, how we will keep innovating, and how we plan to deliver on our new purpose: to inspire everyone to live and eat better for a healthier future for people and planet. When I think of this purpose, I really think of this, how food connects us, how it creates a shared experience, how we make a positive impact that extends beyond our walls.
How we serve not only customers, but associates and communities. Today, we have shared our new strategy, but we know that nothing, absolutely nothing, happens without people. Their passion, their talent, their creativity is what will help us bring it to life. Therefore, our ambition is to be the most local, most future-proof, and most inclusive grocery retailer. Let me walk you through how we think about this already today, and how we will continue doing—what we will continue doing to meet our ambition. I am sure you have felt this from all of our presenters today. What sets us really apart is our great local brand approach. Each of our brands represents the unique character and the needs of the communities they serve. This local approach would not be possible without our greatest asset, our brands, great local people.
They are our colleagues, but they're also our neighbors and our customers, and they represent all the vibrancy and diversity of the communities they serve. They reflect not only our deep leadership bench, but also the people you see across every one of our stores, but also people you don't see in our distribution centers and head offices. From teenagers as young as 13 years old here in the Netherlands, working on the weekends or after school in the afternoons. One of them is my son, who started working for Albert Heijn a little bit over a year ago, to newcomers building a life in their new home country, to people in their golden years looking to stay active and connected, some of them as old as 94, 95 years old. It is both fascinating and a great responsibility to offer jobs and connect people across five generations.
I find it really cool. Our stores, distribution centers, and offices are home to a range of people and their unique stories. I'd like to share one with you today. Last year, the HR leadership team was visiting Albert Heijn Gelderlandplein store, the same store some of you visited today. There, we heard the story of Padma Pampana, a colleague in operations department, you might have also met her today, who has been working there for three years. She came to the Netherlands from India when her husband got a job here. During her first days in the Netherlands, she found it cold, it was winter, and she didn't feel at home. She decided she wanted to start working and not just be at home waiting for her children to come home from school or her husband after work.
So she joined Albert Heijn and quickly found that it was more than just a workplace, but a kind of a home, too. She encouraged other expat wives to join Albert Heijn as well, and now, out of 420 associates in that store, 60 of them are from India, mainly expat wives. Together, they bring unique perspective, a new culture, and a whole new set of national holidays to celebrate together with the rest of the team. Because of their passion, their feeling of ownership, and their enthusiasm, they create an excellent example for the rest of the team. For us, fostering great local brands begins and ends with building strong talent pipelines, attracting, developing, and retaining the best people that also reflect their communities.
We do this through our thriving people strategy, where we promise to create a caring place to work, inspiring growth and collaboration, a place where everyone is heard and valued, a place to find purpose in serving your communities. How are we living up to that promise? Well, let me leave it to our colleagues to tell you.
I come in, everybody's saying good morning to me. I mean, very nice people here. The thing I enjoy most about working at Food Lion is being able to shop orders, because shopping is a hobby of mine, so shopping orders while I'm at work is, you know, really nice.
To learn something new every day, to develop and pursue my career, and to be surrounded with inspiring people.
Sense of teamwork, and belonging that we have, and responsibility to each other to help provide the best outcome to our customers and communities.
We have every single day, around 600,000 customers, and very often, actually, we know our customers by their name.
When my kids were born, they were born in...
... were premature, and I had all the time I needed to take care of them, in the beginning, and that makes you very loyal, very appreciated.
I am a very shy person, so having communication and talking to customers, even my employees, my bosses, it's made me a lot more comfortable in my own skin, being myself around everybody.
Food Lion has helped me develop my skills by moving up from position to position. When I first started, I started out at Food Lion To Go. Then I became a cashier, customer lead, part-time office, full-time office, and now I'm a manager.
I got a job here when I was 16. I didn't really see myself being here this long, but it—I am, because they took care of me.
You know, everybody is treated whether they believe what they believe, and I just love that. Yeah.
With the different, like, programs and, like, the cooking demos and stuff we have, they seem really quick to embrace, like, everyone's different backgrounds and kind of, like, teach other employees about it, stuff that they otherwise wouldn't know.
I've worked here for three and a half years, and I don't plan to change jobs or leave. No, definitely not.
What I would like to wish them is to keep expanding.
Don't you just love these stories? I do, especially the laughter and humor in them as well. We demonstrate our local approach in everything we do, but we also share a common set of values. In my many visits to the brands, our value of care especially stand out. I'd like to share an example of a Stop & Shop School Food Pantry. Stop & Shop works directly with schools and communities to establish and support in-school pantries to ensure kids have access to food at night and over the weekends. The goal is to help kids thrive in school and beyond by giving them consistent access to healthy food. This is the families that don't have access to food easily otherwise. They operate food pantries in five states, in 230 schools, and serve over 40,000 students in need and their families.
What this demonstrates is great commitment and passion for our local communities, because there is nothing more fundamental to one's well-being than access to food and education. What this also shows is the great empowerment our teams feel. The fact that they felt empowered to shape and implement such a wonderful program is equally inspiring as the cause itself. This brings me to our first thriving people ambition, Most Local. Each of our brands has the aspiration to be the leading employer of choice in each of its markets, and we are well on the way. Our brands have continuously been recognized externally as both a top employer, but also an inclusive and diverse one. We're proud of what we have already achieved, and we continue to build on it. Now, to our second ambition, Most Future-Proof.
We strongly believe that to enable the best customer experience, we need to enable the best employee experience. While, of course, our brands have come up with many ways to meet their team's unique needs, there is a lot we do together to drive scale and impact. The jobs we have in our stores and our distribution centers, and even our offices, are constantly changing as a result of customer expectations, changing quickly evolving technology, and now with the introduction of GenAI. Our brands invest in upskilling and reskilling our associates to ensure they continuously learn, challenge themselves, and keep growing. This way, we ensure our people are always prepared to go beyond customer expectations and are also prepared for the future of work. We're constantly investing in leveraging technology to help us do this.
For example, with our SuccessFactors platform, where we host 400,000 associates, which enables seamless, paperless process for all associates and line managers. Or another example, LinkedIn Learning, with more than 21,000 courses available to everyone. In the past years, our people have shown incredible resilience, dealing with crisis, COVID, two active wars, energy price hikes, unprecedented inflation, social polarization. Despite all these challenges, our people grew stronger together and delivered outstanding results. We took care to provide resources and support as needed, including focus on mental health and well-being, as well as developing tools and technology to improve the human experience of our associates. From leveraging mobile app, My Hire in Netherlands, to hire and onboard new store associates in 8 minutes.
Think about it, in food retail, where we hire literally thousands of associates, you can apply to a job and be hired and on-boarded in eight minutes. This is a fantastic productivity lever for us. To increasing associate self-service, to helping associates in our distribution centers pick the right box size using artificial intelligence to pack your order. We know we have a future-proof organization that can handle anything, and we will continue using technology to help our people be more productive, efficient, and make their jobs easier. Naturally, we do this ethically and responsibly. We will always be a very human, people-focused organization that uses technology to learn, advance, and accelerate. Now, let's take a moment to talk about our third ambition, Most Inclusive.
At Ahold Delhaize, our simple commitment is to be open for everyone, and by this, we mean everyone, associates, customers, partners, suppliers, every member of our communities. Our brands do this through our commitment to diversity, equity, and inclusion, which is brought to life through our 100, 100, 100 aspiration. A workforce that is 100% gender balanced at all levels, a workforce that is 100% reflective of the communities we serve, and a culture that is 100% inclusive. I'm often asked whether we have representation targets. We do not. Instead, you'll notice that I describe them as aspiration.
There are many downsides to, and pitfalls when you set representation targets, including misunderstanding the demographics of your location or industry, limiting the definition of diversity to only one dimension, or establishing targets without putting thought into how to achieve them, and more importantly, how to sustain them. But you may say, what gets measured gets done, and that is very true. Since we don't have targets, we must measure other things. So what our brands do, they measure things like, external and internal hiring balance slates, individual development plans, pay equity and psychological safety, to name just a, just a few. And it works. Ahold Delhaize have seen progress since 2021 on gender representation.
Women represented two years ago, 27% of our leaders at VP and above, and by the end of 2023, this number became 37%, so that's a significant difference. We have also seen positive progress in pay equity, ethnic and racial diversity and inclusion. While we're happy with the progress, we know and we see opportunities to do more, and we're committed to doing so. We also know that by connecting with our communities, we can strengthen our leadership and make an impact beyond our organization. Let's see for a moment how our brands do this.
Yeah, we' re really excited to be here today from Stop & Shop, with our community partners at New England Baptist Hospital, here at the Tobin, where we are giving out 500 turkeys and stuffings and all the sides to neighbours in need.
Thank you so much. Thank you so much.
We are serving breakfast and lunch here today from the Street Eats Food Truck. Thank you!
Oh, my grand...
Yes.
My grandbaby going to be happy. Thank you.
We are also able to offer adults meals. This has been a really big key to our success this summer because it really incentivized families to come out.
It's a really important contribution when a local company, like Giant, is invested in its community through its farms that really support environmental stewardship.
Personally, I always find these stories and numbers tell best what we stand forJJ already mentioned that U.S .brands have donated, since 2020, 1 billion meals. Just think about it, 1 billion meals. Last year, Stop & Shop donated 21,500 Thanksgiving turkeys to hunger relief. Albert, our Czech brand, supports a local orphanage. Mega Image has... Mega Image in Romania has a program, Twelve Acts of Kindness, where they continuously support from the very beginning of the war in Ukraine up until now, they support Ukrainian refugees. The Giant Company in the U.S., the colleagues have contributed 50,000 volunteering hours per year. It's more than one hour per person on average.
Albert Heijn, here in Netherlands, offers jobs to, people with distance to labor market, 2,000 jobs, providing these colleagues, with the social, mental, and financial support. Along with our local approach, we also like to drive impact at a broader societal level through a few key partnerships, some of which are displayed behind me and including our newly extended, partnership with the Global FoodBanking Network, which Frans announced earlier today. People are the core of building a better world. With this approach, we aim to create a place where not only our people thrive, but our communities and our planet, too. We believe in taking a systemic and holistic approach to driving sustainability. Our brands engage our associates in sustainability in, in many ways unique to their markets, but we also do many things together.
Some of these ways are our new purpose, our leadership development programs and incentives, which, in addition to rewarding business results, also reward the sustainability results. 25% of each, our STI and LTI, are dedicated to sustainability measures, and that cascades to more than 1,200 associates, our leaders. And before you ask me about bring your own bottle in the workplace, this is not wine that we encourage people to bring to office. This is a water bottle that we encourage people to bring, to avoid using plastic.
Our great local people with deep experience and passion for customers have and will continue to be our key differentiator. Together with them and our aspiration to be most local, most future-proof, most inclusive, our brands will be the leading employer in their markets. They will improve productivity, serve our customers better, and foster more innovation and humanity for future to come. We are all set to grow together, and we hope you will join us for the journey. Thank you. And let me welcome back JJ and Wouter to tell you more about the great potential we have in the growth of our own brands. Welcome.
Welcome, welcome. You first.
Would you, would you like me to stand here or somewhere else, Wouter?
That's fine.
It's fine? Okay. Now to a topic that excites both Wouter and I as retailers, own brand. As you heard Wouter and I speak about in our presentations earlier, own brand plays a critical role in driving customer loyalty and business performance across each of Ahold Delhaize's brands. You've heard lots of examples of that so far this morning. Our own brands differentiate us and are one of the key reasons our customers continue to shop with us each and every day. This is why we've chosen our brands as one of the core areas or focus areas of our Growing Together strategy. Earlier today, you saw the Ahold Delhaize company video on how both big and small are important for our Growing Together strategy within own brands. There are a lot of great examples of how we are bringing the concept to life for fresh and center store.
I talked a little bit about Nature's Promise earlier, and I'll leverage that as one of those examples where we were small and then big or big and small. Within Nature's Promise, we're leveraging the brand across the U.S. and in Europe, creating both benefits for the customers and company. We took the Nature's Promise brand from the U.S., and we brought it to Romania, where this brand is now available for customers. In the U.S., equally, we've taken the strong own brand wine business in Europe and brought it to our U.S. brands. This enables us, of course, to be able to leverage global shared producers and learnings across our businesses.
Those are just a few examples of what we've done so far, but as you've heard in the other presentations today, we have even bigger aspirations in this space, and we see really untapped potential for growth in own brands. In fact, at Ahold Delhaize, we will now have a super aggressive target. Hopefully, you'll, you'll see that as well, but I hope that you're excited about it, because it's very exciting for us, of having towards 45% of our total sales of own brands by 2028. Wouter, anything that you would want to add about the European business for private brands?
Yeah, yeah, yeah, of course. Thank you.
Okay.
Today you've actually experienced some of our lovely own-brand products. In front of you, you see at least my favorite, the mini stroopwafels, and I can assure you, you can run a marathon on it if you eat all of them. I think your favorite is the Giant Food trail mix, JJ.
When I look across here, it looks like mine might be winning, Wouter.
Okay. Oh, yeah, they're more emptier, yeah. No, but and, of course, you also had some tastings in your lunch, and later on as well. But yes, we are very proud of our own labels, and I hope that you've seen also a good display of them for the ones who went to the Gelderlandplein store. Albert Heijn, where you've been, has already started with own brands 130 years ago with Perla and Delicata and Brouwers beer, and really helps us to strategically balancing our own brands, also together with national brands. And this is setting what we consider, at Albert Heijn, at least, the diamond standard in the industry.
And, since we have a long industry, but we have also accelerated a lot of our own brand expertise and, and penetration, at Albert Heijn, I'm very proud to, to introduce Marit, which I've mentioned before, the CEO of Albert Heijn, who has successfully led the company over the last five years, to share that success story, in a video, short to come. Next to that, to Marit, we also have Peter, the SVP of Omnichannel Merchandising at Hannaford, who will share the U.S. growth story in own brands, and then, JJ and I will, will be back to wrap up, what else we can do on the own brand part, and later on, we also have space for questions on this part. So, I think over to the video and over to Marit.
Thank you for your introduction, and I'm delighted to tell you about our own brand at Albert Heijn and successes that we share with the other European brands. Our trusted products are the reason why our customers continue to shop with us, and at Albert Heijn, over 98% of all baskets contain at least one own brand product. Own brand sales at Albert Heijn have grown to well above 55%, which translates to more than 62% in terms of volume, and I'm pleased to report that we have maintained and continued our success in this area. During this short presentation, I would like to put the spotlight on various roles that our own brand plays for us. As I mentioned earlier, own brand line serves us by keeping shopping affordable for our customers.
With our 2,000 Price Favorites products, we have built a very strong foundation based on the high level of quality that our customers expect from us.
This is offered at a competitive price point that doesn't break the bank. These everyday essentials, which can be found storewide in every category, are easy to recognize in store, online, and in our app, which means our customers have no reason to shop anywhere else. We are thrilled to see that the other European Ahold Delhaize brands in the Czech Republic, Greece, Belgium, and Serbia have implemented the Price Favorites concepts as well, with enthusiastic responses from customers. This enables us to source the products together and create even more synergies. In addition to Price Favorites, with our unique set of own brand labels, such as Albert Heijn Terra, Albert Heijn Organic, and Streeckgenoten, our local specialties, we have solidified Albert Heijn's front-runner position when it comes to eating delicious, high-quality food, while at the same time taking sustainability into account.
With our expertise and deep customer knowledge, we keep adding new concepts and building new fresh food categories based on the well-known insight to eat better, fresher, more variety, healthier, and with the right size and packaging to avoid food waste. Our fresh package category, for example, has grown beyond EUR 100 million in sales today, and is one of the jewels in the Albert Heijn crown. Customers love us for our great mix between own brand and national brands, and also in specific high involvement categories where national brands are powerful, we are able to build strong and solid own brand alternatives, and we call these our venture brands. Perla, our venture brand in the coffee category, offers a wide variety of tasty and appealing products with a brand experience that is competitive to other national brands globally.
The same goes for Delicata, our chocolate brand, and Care, our venture brand for health and beauty. Our successful venture brands are now making their way to Europe as well, serving customers at Alfa Beta, Mega Image, and Albert. Our dedication to our own brand development has enabled us to grow customer loyalty and share of wallet, and to create a distinctive customer value proposition, and to strengthen our position as leading food retailer in the Netherlands. This passion is also the driving force behind our health and sustainability achievements. One of them is in the upgrade in own brand packaging. This has resulted in a reduction of over 20 million kilos of packaging over the last 5 years. We've also taken great strides in making our products healthier, reducing the amount of sugar, fat, and salt from our products, while adding fiber to our bread products and pastas.
I'm extremely proud that we were among the first European food retailers to be transparent and show our CO2 footprint on a product level. We are leveraging our capability with a year-round, 360-degree marketing campaign and unique and tasty designs. We see that our efforts are recognized by our customers, as the number of award-winning products keeps increasing. With our integral approach to own brand, we have been very successful in growing Albert Heijn, and we will continue to do so today, tomorrow, and all the years to come. By bringing our trusted own brand products to more European families, we help them to live and eat better every single day. Thank you for your time, and now over to Peter.
I'm pleased to speak with you today about the exciting potential of own brands in the United States. At Hannaford and across each of the ADUSA brands, we've been on a journey to transform the own brands approach. Thanks to this work and more we have planned for the coming years, each of our retail brands is well-positioned to unlock even greater value for both the business and the customer through these offerings. Own brands help the ADUSA retail brands meet a wide range of customer needs. They're an integral part of customers' lives, nourishing day-to-day routines, holidays, and special events. Customers can count on a wide range of own brand products found across all the U.S. retail brands, including our best-performing Nature's Promise and Taste of Inspirations lines.
In addition, we have ADUSA-wide own brand products that cover virtually all categories throughout the store, including pet, baby, home care, and much more. These offerings are complemented by trusted house brands in virtually every category across the store that deliver on decades-long connections each of our retail brands have with our customers. With more than 25% growth across the own brands portfolio since 2019, these trusted products account for more than $14 billion in sales across the U.S. each year. We're incredibly proud that today, more than 95% of shoppers across ADUSA brands have an own brand product in their basket. In addition, the U.S. brands have driven over 16 consecutive periods of own brand unit and penetration growth. At Hannaford, we believe in the power of own brands, as anyone visiting our stores or digital properties can clearly see.
We have a blended approach balanced across ADUSA-wide own brands and our Hannaford-branded products. By locally curating and delivering and communicating the value proposition of these offerings to our customers, we have achieved a year-to-date own brand food penetration of well above 35%. To inspire shoppers to purchase own brands, our customers earn 2% rewards on all own brand products when they sign up for My Hannaford Rewards. We have also strengthened our overall price position through own brands, and the customer appreciation of these efforts has been outstanding. In a geography where we invested in own brands, customer perception for overall price and value went from trailing the entire network by 500 basis points to outperforming the total Hannaford network by 500 basis points. And Hannaford is just one example. Winning in own brand transcends all our U.S. retail brands.
While ADUSA companies are proud to have a vibrant own brand business, we believe there's more potential to lead in own brands, significantly grow own brands, and differentiate with own brands. As Hannaford and the other ADUSA retail brands move ahead, we're accelerating performance in own brands by continuing to invest in price, to drive sales, and ensure competitive pricing that provides customers with the best value possible. We also see additional opportunities to continue to improve productivity and margin, while offering customers more options by expanding our label's presence throughout the aisles and exploring new alternatives to offer value. Across each ADUSA brand, we see own brands playing a more prominent role in assortment, enabling the retail brands to streamline the number of labels in each category and giving us the space to innovate and grow our presence in emerging customer segments.
Driving innovation across own brands is key as we continue to find ways to best meet the evolving needs of today's customers. To do this, we'll leverage and build upon our strong digital connections to continue to drive loyalty and grow baskets. Likewise, we'll enable our healthy sustainability ambitions through our own brand products by expanding fresh and organic options, increasing nutrition transparency, and driving meaningful reductions in plastics. All the while, we will further leverage the scale as the largest U.S. retail group on the East Coast to deliver efficient and high-quality customer offerings to win bigger in own brands in the U.S., as well as explore how we leverage the total scale of Ahold Delhaize across the globe, all while doing what we do best, creating meaningful customer experiences that inspire lasting connections.
Yeah. Oh, very good. Yeah.
Yeah, thanks, thanks, Marit and Peter, for sharing the EU and U.S. perspectives on own brands in, I think, such a compelling way. As you've heard from Pieter just now, in the U.S., we have a significant opportunity to lead, grow, and to differentiate with own brands. Hopefully, you can see evidence of the fact that we're already accelerating. Our ability to do this will depend on how we continue to leverage scale, share product lines, and implement best practices across the globe. I hope that you can also see evidence of what Natalia was talking about earlier. Marit and Pieter are two very talented leaders, very great people, and that's the real connection of Ahold Delhaize, is not only do we understand our customers, make that connection with customers, but together we're a team.
We focus locally, but we leverage our size and scale across the industry, across the globe, to make sure that we're really bringing the best forward of all of our - of all of our brands. So hopefully you'll see more and more of that as we, as we move forward. Wouter?
Yeah. No, JJ, thank you. And, I think there is a lot of value that we can drive by leveraging our global knowledge, and also our scale, and especially when, you know, I also look at our combined sustainability ambitions. For also, for instance, Albert Heijn pioneering with, Terra, which was just launched in the second half of 2023, which is our new plant-based assortment at Albert Heijn, and already has 250 SKUs and helps us in that protein transition. And, you know, and already the first sales are really promising. What maybe some of you have also seen at the, Gelderlandplein store is also a new, refill packages at Albert Heijn. And if customers choose for refills, they can really save up to 70%+ in packaging material.
So that's a win-win from a customer and also much more cost-effective, and we've seen also some examples of that in the U.S. So yeah, there is a lot to do together, I think, JJ.
Yeah, I mean, I think I reflect back to when I first started in the role. I had the opportunity to go with you to Albert Heijn. It wasn't my first time to Albert Heijn, but I was looking there to really understand how we could accelerate own brand in the US, and we talked a little bit about Nature's Promise. We talked a little bit about wine, going back and forth, and we saw a lot of opportunities in the Albert Heijn XL store that day. I won't pretend to know the name of it, or particularly in my Southern slang, to be able to pronounce it, so I'll leave that one alone. But are there other things that we-
Well-
-could leverage, Wouter?
Yeah, I think so. I think... And then we are slowly moving into the next chapter with the infamous Ben at the moment on technology. But I do think that it is nice that the teams are coming together also with our AMS organization, where we can also joint source on pasta and on, not only on wine-
Yep
... but much more. But the other thing is, I think it's good for everybody to understand, is that we are not only leveraging scale, but also know-how and technology. Our teams, when we built Barendrecht, which you've seen, actually in the U.S., in Philly, you already had an operation running, and the teams went over there and really learned a lot about the mistakes, about how to ramp up productivity. So when we designed Barendrecht, we were actually really learning already from our U.S. colleagues on how to really process, and how to ramp up quicker than we would normally do. So I think that's a real benefit, not only about scale and private brands, innovations and designs, but also about technology.
And I think it's good to switch over to Ben, where Ben can explain a little bit more about technology and AI and how does it, how can we apply that in our business? So Ben is here. So, thank you very much, and move on.
Well, thank you, JJ, and thank you, Wouter, and a very warm hello from me to everybody in the room and to the 1,400 or 1,500 or so people we've got online. It's an absolute pleasure to be here with you to talk about tech and AI. I don't think I've ever made a presentation where the expectations have been set so high by everybody that's gone before me, so I just trust that I can cut mustard today. As you've seen in the previous presentation, our company manages an enormous amount of detail, an enormous amount of complexity. We have huge numbers of customers online and offline, 16 brands, 9 countries, lots of stores, lots of associates, and as Frans said in his opening, the daily activity in our business is incredibly dynamic.
Everything that happens in society and in our local communities, the good and the bad, is felt by us. It requires speed, agility, and insights to move fast in serving our customers' needs in those circumstances. Therefore, resilient technology enabling real-time data, predictive analytics, and AI solutions are fundamental to managing and mastering this complexity. That's kind of the hard part, the part, the machine behind it. But then there's the fun part, because when all of those things are in place, the tech enables us to continuously improve and transform customer experiences, enhance our associates' experiences, and drive efficient and sustainable operations, delivering the goods to meet our purpose, to inspire everyone to eat and live better for a healthier future for people and planet.
Our scale and unique combination of brands and markets provides us with an abundance of knowledge so that we can really get to grips with the best of both worlds, fulfilling our customers' needs and leveraging the creativity of the scale to deliver winning solutions and industry best practice across all of our markets. Today, I'm looking forward to sharing those innovations that are driving today's successes and introducing you to some of our extraordinary tech and data science leaders, charting the path to tomorrow. Just as we continuously invest in our store estate, we also invest in our technology, maintaining but also enabling us to serve customers better with new innovation every day.
For example, we're driving efficiencies by investing in the tech that powers our supply chain, furthering the development of infrastructure for our U.S. distribution centers, and launching a world-class, fully mechanized e-commerce home shop center in the Netherlands, in Barendrecht, that many people in the room had the opportunity to visit yesterday. It's scaling up after only 14 weeks towards the 45,000 order per week target, with 300 robots and approximately 20% improvement in efficiency. We deliver better customer experiences through tech-powered investments in our stores, such as electronic shelf labels and putting handheld technology in our associates' hands to free them up so that they spend more time on the shop floor doing things with customers, serving customers.
On the back of our tech stack and on our data, we're building a retail media and data insights income stream with revenues of around EUR 1 billion, and we're doing that in partnership with companies like Adhese and LiveRamp. We track the use of plastics and recycled materials in our products and packaging with tools like Trace One in the US to support our sustainability ambitions. On top of that, we leverage our scale to deploy winning solutions across the portfolio. To share a couple of examples, I'd like to highlight the forecasting tooling we developed in Albert Heijn and scale through Delhaize and now into some of our U.S. brands. Our online product recommendation engine, which we deployed rapidly across first Belgium, then Romania, Serbia, and Greece.
JJ mentioned the e-commerce platform, white label e-commerce platform in the U.S., that, that serves all of our brands. Finally, our global assortment optimization tool that we implemented in partnership with Oliver Wyman. Alongside these, technical solutions, we've been working extensively with AI to improve our customer experiences and optimize our operations. I'm going to introduce you to two of the leaders building these solutions, starting with Noortje van Genugten, who is a leader in our product, analytics, and data science operations at Albert Heijn. Noortje, please take the stage.
So good afternoon, good morning for the people listening from home. I'm Noortje. I'm head of product operations at Albert Heijn. I've been with the company for over 17 years, and I'm really passionate about data and food, and especially in the combination of that. Today I would like to give you an example of that. Marking down products that are about to expire to optimize revenue and minimize food waste is not new. By adding AI to this, it means we can up our game and add a whole new level of sophistication. At Albert Heijn, we've developed a state-of-the-art AI solution called Dynamic Markdown. With Dynamic Markdown, we incentivize customers to buy products that are about to expire by increasing the discount over the day. This allows us to significantly reduce food waste and consequently improve efficiency.
It makes us very proud that we're one of the very few supermarkets in the world to have developed this AI solution in combination with electronic shelf labels. So with Dynamic Markdown, we try to make products that are about to expire, more attractive to our
customers by giving these items an increasing markdown during the day. The closer to closing time of the store, the higher the discount. In this way, we avoid wasting perfectly good food. How does it work? An employee scans the products that are about to expire and puts a sticker on it saying, "For discount, see the shelf label." The shelf label immediately displays the discount. From that moment on, we can remotely change the discount shown on the shelf label and in the point of sale system through the cloud without any actions from our store employees.
So we can do this whenever we want, as many times as we want. Our algorithms determine the optimal discount, and we evaluate the discount every 15 minutes for each registered product. We have already saved more than 250 tons of food waste, and we expect to save another 450 tons the coming year. Dynamic Markdown has been very effective in achieving our goals, thanks to a great team of data scientists who developed the solution. I'd like to introduce Jelmer, a machine learning engineer at Albert Heijn, to tell us how we have developed this state-of-the-art solution.
We are very proud of Dynamic Markdown, and there are three main reasons for its success. We started out by using a simple rule-based model to gather data to learn to understand how the dynamic markdowns affect the customer. We started out by trying to understand what is the effect of the dynamic markdowns on the sales and also on the food waste that we try to minimize. Secondly, thanks to close cooperation between our data scientists and engineers, we were able to build a state-of-the-art machine learning platform. We need this platform because the number of markdowns throughout the day varies a lot, so we need a solution that can adapt and scale to this change. It allows our data scientists to experiment, to try out new models or improve existing models. Thirdly, we're always looking to learn and improve.
To ensure that our customers receive the most optimal markdown, we continuously perform A/B tests in the stores. Another great example is the transition to reinforcement learning. Reinforcement learning is an advanced modeling technique that allows the model to learn from the decisions that it takes. We use this technique to try to learn and understand the customer even better. Using this type of technology to improve Dynamic Markdown even further makes us extremely proud, and it also makes Albert Heijn Data Science a very cool place to work at.
So what's next? Given the great success, I'm really looking forward to expanding this Dynamic Markdown solution to more assortment groups this year, improving value for our customers, and preventing even more food waste. So isn't it cool that data can do this? Back to you, Ben.
Thank you. I think it's really cool that using data, we can have a big impact on something as simple as just food waste. It also, you know, makes me proud that we've got the infrastructure, with the technology, the algorithm, but that we can then get that out across the network at the speed that Noortje describes. I'm only aware of one other retailer in the world who can do that. So thank you, thank you, Noortje. I think you can see it is a great example of how this technology, data, and AI can enable us to deliver a healthier future for people and for planet. Next, all the way from Chicago, I'd like to introduce you to Karin Chu. Karin leads our data science teams in the US.
Karin, come and tell us about some of the things you've been doing.
Hi. Hello, everyone. It's a pleasure to be here with you all today. I'm Karin Chu, head of Data Science and AI for AD USA. I've been here three years, and prior to this, I spent several years working in financial services, doing a lot of quant and data science. My background is a PhD in statistics from Texas A&M University in the U.S. I've been doing data science, quant, long before it was deemed cool or sexy or exciting, for that matter. So with that, let's go ahead and get started. In the fiercely competitive U.S. grocery market, where customers expect home delivery in as little as 15 minutes, having precise and adaptive customer demand forecasting is essential to maintaining a competitive edge in an e-commerce fulfillment process.
So, as a customer orders online, after a customer orders online, the associate at the Giant Company and Stop & Shop fulfill the order by picking in store, this is our pick from store process, using a custom-built e-com fulfillment platform, Spectrum. And what you see, Spectrum is the app they're wearing to manage the orders, while also organizing products in bags to optimize for space and batching. What you may not see here is the complex science, data, and technology that enable this process. And optimizing this process is our core goal as we design the next generation of demand forecasting algorithms using machine learning and artificial intelligence. So our solution will help to ensure our great local brands are well-positioned to schedule the right amount of labor at the right time, with greater efficiency and at reduced cost to serve our customers.... So how does this work?
Our solution consists of two sets of ML AI algorithms. The first set, this is going to be slightly technical. The first set forecasts hourly item level customer demand at each store. The second set forecasts hourly order volumes by store. Both are forecasting 12 weeks into the future, so quite a lot of lead time, providing substantial lead time for strategic planning and operational adjustments. Our computational workflow forms a feedback loop, continuously cycling from data to model training to implementation, and then updating dynamically based on user input. It's a very complex forecasting problem to solve. Since I only have 3 minutes here today, I will spare you the math and the calculus behind it. We'll save that for another day. But our team's final solution demonstrated impressive 90% accuracy in demand forecasting.
Just in this initial phase alone, our work will translate into real-world efficiencies of up to 5% savings in the first year alone. In the next phase of the project, we plan to expand these algorithms by adding growth trajectories, thus unlocking revenue generation opportunities in the e-com fulfillment space. I want to punctuate. This expansion signifies more than just a leap in our modeling capabilities. It also represents a strategic advancement in fully harnessing AI, data, and tech. As we move into the next generation of data-driven decision making, this strategy will inform smarter, more sustainable business practices. What is next on our plate? We're looking to build out the next generation of solutions in e-com fulfillment, and here are some examples. Leveraging AI to batch customer orders more efficiently, reducing pick time, and optimizing space in bags.
Optimizing the routes the brand associates take inside the stores to enable them to move faster and with less friction. And finally, integrating GenAI, we are enhancing our e-com fulfillment platform, such as upgrading the substitution algorithms to further refine product recommendations for out-of-stocks. So all this translates into getting the orders out the door more efficiently and at a lower cost. We look forward to not only supporting our e-com fulfillment growth ambition, but also building AI ML capabilities and solutions that are transferable across brands . Thank you. Back to you, Ben.
So Karin, Noortje, thank you. Thank you for sharing those inspiring examples on your great work in AI. With the advent of generative AI, we and the industry are at a pivotal moment to reshape food retail. Gen AI has the potential to disrupt the world more radically than any other technology we've seen in the last three decades, and it impacts every domain of our business, customers, operations, our people, and the planet. In combination with AI, Gen AI will enable us to unlock previously inaccessible opportunities. We're investing in generative AI solutions and building the foundational capabilities. We've set up valuable partnerships such as Kickstart AI, which helped accelerate the development of the Dynamic Markdown solution that you just heard about. Kickstart AI works closely with the Dutch Food Bank to support our local communities.
Albert Heijn's launched our Gen AI Lab, a start-up incubator to develop and roll out generative AI applications, such as the recipe scanner, which enables customers to take a photo of a recipe, translate the ingredients into Albert Heijn products, and add them directly into their shopping list. We've also leveraging Gen AI to help customers reduce their food waste, with solutions coming soon, such as Scan & Cook, to help recipe ideas based on what's in your fridge, and Scan & Bewaar, or Keep, which is showing customers how best to store fresh food to give it the longest life and reduce their domestic food waste. In the U.S. e-commerce business, we've launched a semantic search solution that understands the context of a customer's online search request and returns better results, even if the customer didn't get exactly the right words in the first instance.
We use Gen AI to pre-populate a shopping list from short-form videos, helping customers discover new recipes and new products from our assortment. In addition, we're deploying and scaling these tech and AI solutions, we are also projecting ourselves into the future. We've shaped a vision, you saw the video with people with all the Post-it notes, where we're aiming to drive significant value and significant innovation by optimizing our customer value propositions and our core retail operations, enhancing our associates' experiences, and reaching our sustainability goals. Today, I want to try and share with you a sense of that vision. So come with me into the future, to 2024. Let's set the stage by imagining who the customer is going to be and how they're going to act.
Ten years from now, just as you heard from our colleagues in that video that opened these deep dives, we see a world where the customer will experience a whole new way of shopping. We will automatically replenish their homes with the basics. We will provide hyper-personalized offers, which are based on their purchase history, their preferred brands, their budget, their health goals, and their sustainability preferences. With the help of an AI conversational shopping assistant, our customers will always have someone available to answer their questions and provide suggestions. The seamless omni-channel experience offered through the messaging platforms will allow our customers to communicate with the AI assistant, receive updates on their orders, no matter where they are or what device they're using.
Our tech, data, and AI foundations will empower our teams to leverage AI and make the shopping experience possible for our customers, and I think sooner than we might think. So I'm really pleased to bring Karin and Noortje back on the stage one more time to talk a little bit more about the work our teams have been collaborating on to create our vision for the future of Ahold Delhaize. So, Karin, Noortje, you've both been very involved in the workshop processes that we've been running to really shape this future. Let's spend a little bit of time talking about what you and the teams have envisioned. Noortje, perhaps I can come to you first. How do you see AI, generative or otherwise, transforming the work in our commercial teams?
In the end, we see that AI would be able to support full dynamic assortment and running promos in all our stores. As an example, AI could integrate social media data that a local event, like a festival, is coming up near a store, include weather data, and automatically make adjustments to price, promo, and assortment to attract customers. And you, Karin?
Yeah. So building on that, I can see how AI will streamline the supplier negotiation processes, such as managing the interactions with the smaller suppliers through AI-powered systems. Or think about using GenAI to help prepare for negotiations or simulate scenarios for the larger supplier negotiations. This will really help ensure consistency in an otherwise rather complicated process.
Everything that happens in the merchandising operation flows through into the supply chain. How do you see the supply chain operations changing with this technology, Noortje?
For supply chains, we see that they become fully self-steering, meaning they will automatically simulate multiple scenarios and pick the best one, making complex trade-offs between cost, sustainability, and service levels. For example, think of self-steering warehouses that make dynamic real-time adjustments to product locations, picking routes, and truck loading, monitor safety, and automatically manage labor planning.
It's not that we're not working on these things today, it's just the tools that we have today aren't so sophisticated. It gives us the opportunity to go to the next level. Karin, I know you've got some passion for how these technologies can really transform our sustainability ambitions. How do you see that showing up in the supply chain?
Yep. So I think AI will be a powerful tool that enhances sustainability and supports ethical sourcing throughout our supply chain, process, helping us manage carbon footprint, packaging, plastic, and waste. And AI has the potential to evaluate suppliers based on their environmental impact. And on the consumer side, the algorithm will enable us to develop pricing strategies that will help the consumers make healthy and sustainable choices.
It's very compelling when you start to get into it, and I think it's easy to see that, or easy to imagine the impact that this will have on our ability to deliver our customer value propositions more efficiently. Karin, if we shift our focus to store operations, where do you see the big levers in the stores?
Good question, Ben. I believe there are lots of applications. AI and machine learning will transform store ops by empowering the brand associates. By using predictive analytics and AI, for example, we will enable store managers and brand associates with more efficient scheduling and task management. Now, on the maintenance op side, I think by using AI and machine learning algorithms, we'll be able to predict equipment issues and schedule any sort of preventative repairs, thus which will minimize downtime and ensure ongoing quality control.
And adding to that, one of the most important priorities for our customers is that what they want to buy in the store is also available in the store. And AI will help us have full inventory visibility, ensuring that we will always bring the right stock to the right store and not bring too much, so we can prevent food waste. This will give our associates more time to focus on value-adding activities.
Absolutely. I think increasing the day-to-day satisfaction for both associates and customers is a fundamental goal. I think everybody needs to really see that we will always be a people-led organization. We see technology, data, and AI increasing and enhancing our associates' roles in the stores and in the offices. So, Karen, Noortje, last question: What are you most excited about how these technologies and how AI will transform the future of work?
Yep. So for me, remembering that I have worked five years in HR, personalized training and development is something that I am very passionate about. Imagine the potential of AI to equip all the associates to be top performers. Think about a model that derives or extracts insights from all the actions of the top-performing colleagues, and translate that into personalized training content, and recommending the next best actions for these associates. AI will transform our ability to help our associates grow into their fullest potential.
....Noortje , what do you think?
I'm really looking forward to the potential for AI to automate all routine activities and enhance decision making. For example, by analyzing all data available, extracting relevant conclusions, and actionable insights. Imagine that, no more routine tasks. I would like to work in a world like that.
Absolutely. As the colleague said on the video, less hassle. I can vote for less hassle. So thank you both for taking so much time to share your insights that I hope have created a truly exciting picture, so you can see how this will enable us to create exceptional experiences for our customers and for our associates in the future.
Thank you.
Thank you very much. It's an exciting time to be part of Ahold Delhaize. I think it's, in my 11 years, always been an exciting time to be a part of Ahold Delhaize. But as we continue to push the boundaries of what's possible in the retail technology, it's even more so. Bringing these innovations to life will, of course, require focus and resources. And to deliver on the vision, we continue to commit significant investments towards our tech foundations and our data and AI capabilities. The foundational investments enable rapid integration of new technologies alongside data that is reliable, available and secure. We're investing through our ecosystem of in-house capabilities and with partners like Microsoft, and through thoughtful collaboration in initiatives like the W23 Grocery Retail Innovation Fund. Great talent is also key to our future.
We recently opened the Tech Studio AD01 in Bucharest, in Romania. This further strengthens our ability to attract top talent in Europe, and we'll continue to reinforce our unique model that enables us to experiment locally and scale winning solutions across our markets. We're going to do so responsibly, as you would expect us to do. Responsible to our customers, our associates, and our shareholders. Be financially responsible, building on our strong track record of selecting the use cases that matter most for our customers and associates, and drive efficiency back to invest in price. Also be the responsible custodians of technology with the right policies, privacy, governance, security, while always retaining a human touch. We're very excited to further transform our business and the industry on behalf of our customers, unlocking more value for them, for our associates, stakeholders, and the planet.
I'm sure you're excited as I am, as we are about to deliver the value. Sorry. I'm sure you're as excited as I am. I was doing pretty well until I had a tip of the tongue there. I'm sure you're as excited as I am, as we are about to about the value delivered to date, and even more so, the great potential that we're poised to realize. I want to say thank you, and now who better to take us on the journey of how we will realize all of this than our CFO? Let me hand over to Jolanda.
Thank you, Ben. Well, thank you, Ben, and hello to everyone. It's great that you are here with us today. So thank you for being here, and I hope you are as excited about our plans as, as we are. In the next 20 minutes, I will take a step back, and tell you more about our ambitions. We shared that we are committed to sustainable value creation with our strategy, rooted in our purpose, fueled by our growth model, and enabled by our strategic priorities, which together allows us to achieve our ambitions. We will specifically focus on the following areas. First, driving profitable growth by selectively investing where we see optimal growth and returns, ensuring we maintain our industry-leading margins, supported by laser-focused cost discipline.
Second, embracing and driving transformational change by further leveraging the power of data and AI to support our business now, but also sow seeds for the future. Third, enabling our journey towards healthier communities and planets by ensuring we have what we need to make fact-based decisions and to take timely actions to deliver on our purpose. And last, but certainly not least, continuation of our track record of cash flow generation, reinvested in our company while delivering growing returns to our shareholders. Before we step into our ambitions going forward, it's good to reflect on the plans we shared in 2021. If we look at the scorecard from Leading Together, we are delivering in line or ahead of our aspirations. We are particularly proud of our free cash flow development, margin stability, and solid earnings per share, and our strong market positions.
But like with any longer-term plan, there are a few areas where we underperformed our ambitions. The slowdown in the online market has resulted in lower growth and a longer path to profitability. And as you heard from Frans and JJ, the path to revitalization for Stop & Shop is taking longer than we would have liked. However, it's also exciting to see the new green shoots that have emerged, and I believe there are many areas such as technology, AI, and commercial best practices, that will provide more synergies in our future than in our past... So, grounded in this reflection, let's look into our ambitions going forward. And there's a lot to like about our plans for the coming years. It's balanced. It's about growth, industry-leading margins, cost discipline, investing in the future, cash generation, and all this results in growing shareholder returns.
There are a number of avenues to deliver on our ambitions. We are not dependent on one element to drive the value. We have multiple levers to deal with volatility in economic, political, or social context. Our Growing Together plan is anchored in the core attributes of what it takes to being a great retailer. It starts with consistently investing in our customer value proposition, creating exceptional customer experiences, and providing trusted products to strengthen loyalty and engagement, which allows us to densify and grow our markets, strengthening our foundation and expanding our horizon into new growth territories. We continue to innovate and create new opportunities to fully utilize our assets, our data, and accelerate complementary income streams, while we relentlessly leverage and lower our cost base through enhanced digital automation and infrastructure capabilities.
Strengthening competitiveness in our omni-channel network, and thereby remaining top choice of our existing and future customers, is the most profitable and the fastest way to grow. We've put together a strong set of levers to drive market share and volume growth, increasing own brand shares to 45%, leveraging mega consumer trends such as healthy sales and driving healthy sales across the full store, and taking the right actions on assortment and promotions to enhance our price position, whether it be the $1 billion in price investments in the US or expanding our price favorites across our European brands. These are just some of the examples that we are truly excited about. As we strengthen our customer value proposition, we will continue to scale opportunities to grow our customer reach and our market density.
Portfolio excellence is a significant part of our plan, incorporating both organic and inorganic components such as Profi, delivering strong and rapid returns. Together with the growth elements of the customer value proposition that I've just mentioned, we envision these levers will help us grow online loyalty sales to 80% and to grow our digital monthly active users to 30 million. Densifying and expanding our strongest brands will be top priority. Some examples: Returning to more pronounced organic store growth in the US, particularly with the acceleration of our winning brands, Food Lion and Hannaford. Further leveraging our Benelux stronghold through Albert Heijn, and capturing new growth opportunities in the CSE region, with new store openings and with accretive bolt-ons such as Profi, bringing scale and synergies.
On the flip side, making necessary interventions when brands are challenged will also be an essential contributor to elevating the quality of our sales. Our recent Belgium Future Plan demonstrates our ability to do so, and we will apply the similar rigor to the transformation of Stop & Shop. I'm confident the interventions highlighted by JJ will secure a bright future for this brand, and we will communicate transparently and regularly on the progress at Stop & Shop. These combined actions enable us to grow our complementary income streams, an excellent example where we see more synergies in the future than in our past. Over the past few years, markets, technology, and consumer sentiment shifted at high pace, and these changes have resulted in an unprecedented opportunity to leverage both our tangible and intangible assets in many ways.
Last Investor Day, we made the commitment to deliver over EUR 1 billion in complementary revenues by 2025, and we are on our way to deliver this target, despite the slower general merchandise e-commerce market in the Benelux at Bol. To create acceleration, we introduced several group focus areas to leverage the diverse expertise embedded in our different brands to find innovative and scalable solutions. With strong teamwork, we've identified additional opportunities which have increased our scope, and it's all about capitalizing on our abundant data to drive retail media business, partnering with other industry leaders to innovate and develop required strategic capabilities, as we will do with the W23 Global, and scaling new business models in the B2B and B2C areas, such as those at Albert Heijn and bol, as highlighted by Wouter.
Taking this into account, our ambition for complementary income streams is to grow to around EUR 3 billion in 2028. For context, including the wider scope, that implies a doubling versus 2023. Which brings me to the last part of our growth model, the Save for Our Customer program. As you know, we have a relentless focus on driving operational efficiency and cost discipline. We need it to fund our growth plans and to simplify where we can. We believe in simplicity.... Over the past 4 years, we've achieved a lot with the Save Our Customer program, and this is a muscle we want to flex.
We are again raising the bar to EUR 5 billion in the 4-year period, and this is by no means an easy lift, and will certainly require a lot of hard work and discipline, but those are qualities you all know we excel in. Many of the mechanisms to deliver savings are ongoing, and as Frans already said, usual suspects. We expect to step up in areas like cost of goods sold, as we see significant benefits in joint sourcing through alliances such as Eurelec, and in growing scale in own brands, and in further leveraging the power of data and analytics in our assortment building and procurement negotiations. But also in logistics, distribution, store operations, and back offices by infusing AI and automation, and by simplifying and refining our operating model, which will enable more efficiency and lower our G&A spend over time.
The savings from the Save for Our Customer program will be reinvested in our CVP, technology enablement, and in our sustainability agenda, which in itself drives growth again. So on that note, it's a good time to turn to our capital investment allocation. Maintaining our stance and cadence as a well-invested company is, and always will be, one of the key elements of sustainable success, and striking that right balance of investment in front and consumer facing and back-end infrastructure is critical. As our omni-channel capabilities evolve, we need to drive seamless integration across the value chain and lay out a strong foundation for future growth and opportunities, and this will ultimately feeds into our margin again. We will maintain our CapEx guidance on an average of 3% gross cash CapEx as percentage of sales.
To optimally deploy our money and increase our return on capital, we will continue our rigorous and disciplined capital approach, and selectively invest in the best opportunities in our portfolio of brands and functional capabilities. JJ and Wouter have already shared details here, but there are two areas we are particularly excited about. Our return to net store growth in the US in the coming years, and the strengthening of our core infrastructure to capture scale and efficiency opportunities from data, technology, and automation, as Ben, Kaat, Karen, and Noortje already touched upon in their interesting session. As I said in my opening, enabling our healthy communities and planet journey by ensuring we have what we need to deliver on our purpose is an important focus area, and how we invest is also an essential enabler of our sustainability agenda.
While we do not report on these investments as a separate category, sustainability is interwoven in our investment and capital allocation processes, and in our performance management systems. You could say it's part in everything we do. Looking at our purpose, our ambitions are translated into concrete targets where possible, and we are creating the necessary roadmaps to deliver on those. While there are elements of our sustainability journey that add cost, many of the steps we are taking also bring financial and business benefits. For example, investment in energy efficiency projects generally have short paybacks of only two years, and growing the share of healthy sales, particularly in fresh, tends to have better margins and faster throughput in our system, which is a positive driver for working capital.
This brings me to the final part of my presentation, where I would like to share how our Growing Together plan translates into our financial ambitions for 2025 to 2028. Let's start with a 4% compounded annual growth ambition in net sales. For us as a leadership team, this is an exciting and important element of our plan, directly related to our profitability. In the assumptions, we have included Profi and potential portfolio interventions in the U.S. Building a quality top line will also benefit a quality bottom line. We have an industry-leading operating margin, and are committed to strengthening our position. Given our regional and brand diversification and the blend of growth and self-help opportunities, the power of our portfolio lies in the opportunity to leverage our scale and drive synergies.
To maintain a strong upward trajectory in absolute euros and dollars, which ultimately fuels growth and shareholder returns, the art, but also the science, lies in how we sequence our strategic long-term priorities, maintaining enough flexibility to capitalize or intervene in the short term as opportunities and challenges arise. To realize the faster than industry growth rate that we are targeting, and to ensure sufficient flexibility to top up investment if needed, we are planning for an average 4% operating margin over the period. And although we do not give specific regional guidance, we remain steadfast in our view that both regions are 4%+ businesses over time. Two of the biggest drivers to unlock additional funds will come from complementary income streams and from the Safe for Our Customer program... And this brings me to how we plan to drive cash flow and shareholder value.
Following strong and consistent performance, combined with our outlook for growth, we see a path to over EUR 9 billion in cumulative free cash flow. Our number 1 and 2 market positions, industry-leading margins of 4%, diligent focus on working capital, and focused capital allocation are the most important drivers. The lessons that we've learned over many years will guide us in the future. The ambitions that we discussed translate into growing shareholder returns. Assuming consistent exchange rates at current levels, as well as interest rates, we expect to generate a high single digits earnings per share CAGR for the period of 2025 to 2028. Our guidance for 2024 remains as is.
Although it's too early to give specific guidance for 2025, barring any unexpected economic or macro-related shocks, we expect to return to diluted underlying earnings per share growth as of next year. Our intention is to continue with a EUR 1 billion annual share buyback program in the lifetime of this plan, which is subject to the usual disclaimer and continuing with the usual approval procedure during our November supervisory board meeting. In addition, we will continue our annual increase in dividend per share within the ranges of our dividend payout policy. For me, the financial strength and the courage to take on the growth and investment plans we are laying out here today is firmly rooted in our confidence in the strong cash flow generation of our company and the strong financial fundamentals, which you can see on the screen behind me.
We're in this together as our incentives are closely aligned with our ambitions, centered around growth, margins, cash flow, sustainability, and shareholder returns. I believe in our ambitions. We can grow together, and that's because of our people. They drive our strategy. For more than 150 years, we've been successfully serving our customers, growing our business, and expanding our markets, and we achieve this together as a team through passion, dedication, innovation, agility, and in no small way, with a human touch. We've weathered storms and focused on opportunities to remain relevant for our customers in an ever-changing environment. We are ready and willing to pioneer, scale, and lead through innovation, backed by strong data, a real-time pulse of the customer, and carefully iterating and learning into new areas.
We have a strong track record of delivering on our promises and being there for our customers and our communities in good and bad times. We have created multiple angles to deliver on growth, margins, and cash flow while reducing risks to meet, and hopefully exceed, expectations over time. Our differentiating factor, without any doubt, is our people. They are the essence of Ahold Delhaize and enable our operational strength to outperform. Together, we are Ahold Delhaize, and we are here to grow together, and we look forward to it, and we hope you do, too. Thank you for your attention.
... So good afternoon, everyone, also from my side. I'm the invisible voice in the room today. So we're now ready to get started with our Q&A. Like always, I'd like to ask you to minimize your questions to two, and there's no discounts today, so no two and three parts, please. And if you're nice to Roger and Martine, they will give you the microphone to ask your questions. We've got the whole ExCo here with us today, so I think it would be great if you could also spread your questions around amongst the colleagues on the stage. You get to see Frans and Jolanda often enough, and we really appreciate it if you go down that road.
With no further ado, Frans, I'm gonna hand the floor back to you and have a great Q&A session.
Thank you very much, the invisible JP. Before we start, I just would like to thank one colleague of ours who is going to retire from the company by the end of the month. That is Jan-Ernst de Groot. Since the merger, he was our Chief Legal Officer, and the last year, he also took the Chief Sustainability Officer role. Jan-Ernst is transitioning by the end of the month. Alex Holt, our new Chief Sustainability Officer, is joining us as from next week. And guess what? We have already a successor for Jan-Ernst on the CLO role, the Chief Legal Officer, because Linn Evans joined us on the fifteenth of April already in the role. So welcome, Linn. We haven't seen you live on stage, but now you are. And that makes also our team even more complete.
That makes us ready for opening the question round. I saw a few hands already. I start for the moment with Sridhar. And two questions, Sridhar. We know you from the analyst calls.
Many subparts, several subparts. No, no, so you talked about growth. I'm sorry if I'm very crudely bringing this back to a couple of very financial points, I guess. 4% growth is clearly ambitious relative to where we've come from. If you could flesh it out a bit more, is there a ramp-up phase here? Should we be anticipating growth from 2025 already? You've touched on space growth, but you've not given us an idea how much space growth is in there. And also expand a little bit on interventions. You've touched on interventions, and yes, we don't really know what it means. So if you could explain, that'll be very helpful on growth. Secondly, margins. You've talked about averaging 4% relative to what we've become maybe more used to at least 4%.
So are you hinting at a, you know, period where margins could be below four, or is that not a conclusion that you want us to get to? Yeah. So that's it. Thank you.
Can I start? Yes. The first question on the growth trajectory, it's rather linear over the period that we foresee, but bear in mind, also for the modeling, that in the first year, we include Profi in 2025, which has a positive impact, of course, so that supports that first year. But a negative effect in the first year, and that's more or less also a bit of an answer to your second question, is that we foresee that we will close underperforming stores in the U.S. We have to take that formal decision ahead of us, but it has been included in the guidance as well, and that is in the first year, a negative impact on the growth.
But apart from that, it is rather linear over the period, and as I said, in a subsentence somewhere, we do expect earnings per share growth already in 2025.
Do you see them offsetting each other, Profi and US, or is that-
Sorry?
Do you see the Profi and US offsetting each other or?
It is included in guidance-
Okay.
and it's not of the same magnitude.
Yeah.
It is a positive and a negative impact that we've included in that growth number.
And space?
The margin, the margin question, I think, for sure.
Yeah, that was what...
Sorry.
Yeah, there were two questions in two.
As in-
The average margin.
Space, yes.
Yes. Maybe you can touch upon space first, and then-
The square meters, Sridhar, we still have to figure that out. Depends also a little bit on the plans that JJ already alluded to. But I think you will hear soon about this also still in the 2024 year.
Then the average 4%, let me start with the statement that I already made, that for us, both regions are 4%+ businesses over time. Our guidance is an average of 4%, which allows us to do the right thing at the right time to enable our company to grow and to top up investment if needed. And that allows us to deliver, in the end, more profit, a high single-digit growth in our earnings per share, the commitment to grow dividends year-over-year, and also to share the intention with you to have a EUR 1 billion share buyback program over the lifetime of the plan. So it's all interrelated, and that's how we came to the average of 4% for the lifetime of this plan.
Thank you.
Isabelle, yeah.
Hello Isabelle from Morgan Stanley. I have a couple of questions. The first one is the cadence of the price investments relative to the cadence of the savings. Should we assume a linear path for the savings relative to the price investments being front-loaded? That's the first question. And then I have another one for JJ.
Okay, I have a short answer to that. It's well-balanced.
Yeah.
There's not a big discrepancy in timing of neither of the two. It's spread over the period for both of them, the savings and the price investments.
Thank you. My other question is on Stop & Shop in the U.S. I wanted to follow up on the question of what exactly intervention means. What percentage of the portfolio are we closing? Are those stores loss-making or maybe not, if it's a way on growth in the first year? But also more broadly, when we talk about the $1 billion of price investments, what do you have in mind when it comes to your price gap versus the market average for Stop & Shop?
... Yep, thank you for the question. Maybe just for a little bit of context, for the group here on Stop & Shop. So in the Northeast, we have, Stop & Shop holds the number one or number two position. It has across 7 DMAs. We have 54 DMAs in the U.S., and Stop & Shop occupies 7 of those. Over the last 4 or 5 years, we've remodeled 190 stores, and to your question, we've actually already made investments in price in those, in those stores, and we've strengthened the value proposition. We've completed the overall portfolio assessment. We won't share the exact number of impacts on those, on those stores today, but we will come back later, later in the year to talk about that. That is factored into our overall, financial, financial plan that Jolanda shared.
Of the $1 billion in price investment, a significant investment will go into Stop & Shop, but it's not the only brand that we have a price investment in, and it's not the largest investment that we have. We'll do price investments across each of the businesses that occupy the U.S. geographies, and it'll vary based off of the pricing strategy and their position in the marketplace. So if you look at the Food Lion banner, of course, it has a very different price position in the marketplace based off of its brand position, high-end convenience, high-end personalization, very, very strong quality in convenience, but also a very focus on everyday price. Whereas Stop & Shop has a heritage of assortment, strong equity in assortment, but also needs to strengthen its value proposition.
So we make a significant investment there, but it's not the only brand that we put investment in for price.
Yep, please go ahead.
Good morning. Thank you.
Hi all, Freddie Wild from Jefferies here. First of all, thank you all for a fabulous event over the last couple of days. First question, and maybe this is sort of can be widespread across, JJ and Wouter as well. But a breakdown of the guidance by region. My impression—I know you don't want to sort of be too specific. But my impression is that there may be more sales growth opportunity in the US, with maybe a little bit of margin retrenchment there, certainly in the near term, and then maybe more margin opportunity than sales growth opportunity in Europe. Is that a fair way to characterize how you're thinking about the businesses?
No, as you have understood already, it's a rather rhetoric question. We, we don't give that guidance. But I think what you've seen in the last quarters, that we are already recovering our margin profile for Europe, and that there's a very logical reason, because we are out of our Belgium Future Plan and going to grow again. We see a more benign effect, although still heavy on energy, commodity prices, also linked to the Ukrainian war. So I think it's a fair expectation that European margins, like Jolanda already mentioned, will be at coming at the usual 4%. That's what we always worked on. And I will pass on your higher expectations for growth in the US and Europe to my colleagues.
To the colleagues, yeah. I noted.
But I think, I think like Frans mentioned at the beginning, 4% CAGR on sales is in the present, inflation environment. Of course, it's not so easy to have that outlook for four years. I think it's an ambitious plan, but we worked on those plans. It's, top-down and bottom-up connected, so in all the plans of the brands, it all adds up to that 4% CAGR.
And then on Stop & Shop, you've obviously got some remodels under your belt, and I realize these are- this is a question you'll be very familiar with from the last couple of years, but could you share some details on how those remodels are performing, maybe the like for like difference, the margin uplift you're seeing? And will you be sharing those details on sort of an ongoing basis or?
I've shared in the past already quite some data on the sales uplift of the Stop & Shop remodelings, but maybe JJ, give a little bit more color from your side. You're much closer to the fire than I am.
Yeah. So of the 190 stores, for sure, we see a marked difference between the remodeled stores and the unremodeled stores. We see kind of strength in a couple of key areas. First of all, in key attributes around freshness, quality, and service, really important to Stop & Shop. We see those improving over time, and not only at the time of the remodel, but continues over time, over each quarter. We also see strength in overall volume performance inside of those stores, different than where we see the other stores. But we also need to strengthen our value proposition, and that's why we're bringing in more price investments into that business.
We also, as you know, when you remodel a lot of stores, I can tell you from experience, you learned a lot, and so as we move forward, we're applying those learnings to not only the Stop & Shop business, but areas across the U.S., and that's where we believe we can get more efficient with our capital, at the Stop & Shop, at the Stop & Shop business.
JJ mentioned already a more efficient allocation of capital earlier with the remodelings also. I think we learned a lot along the way, starting in Connecticut, starting in Long Island. I think later on, the later remodels were already more efficient on capital allocation, so I think there was a good learning there, too. What we also should realize with the Stop & Shop brand is that we talk about self-distribution of the supply chain on the East Coast, and that means, for a big part, that the third party provider of supply chain services, C&S, that we replaced them by our own people and our own operations. And Stop & Shop had by far the biggest share in that C&S operation.
Now, having that massive supply chain operation almost in the middle of COVID is an unfortunate timing, but nobody could tell us this. So also, Stop & Shop there was harder hit by that supply chain, let's say, deficiencies there, and is now enjoying again a better and fuller supply chain. So we have good expectations there that will be also a little bit of tailwind as well, for Stop & Shop, too.
That's great. Thank you.
Yep. Yep, please.
... Thank you. William Woods from Bernstein. So when you were talking about US store growth, you talked about densification in areas where you were strong already. I was surprised that you didn't mention much M&A in the US, and also potentially regional expansion. You'd be moving into Georgia and things like that. Do you still see both of those things as an opportunity?
Yeah, the answer, the simple answer is yes. JJ did a very deep work on densification. Where can we win more? Where there's an opportunity in that very fragmented East Coast for growing our business? At the same time, we always said that inorganic growth or M&A is a part of our strategy. And we also said that, looking at the most profitable way of growing is on the same square footage to start with, existing store base, then to fill in the tuck-ins in areas where you are already there, where your brand is there, where your supply chain is available. And the third thing is an acquisition, let's say, in an adjacent area. So that is the same strategy. Strategy should be fitting our strategy. It should be an accretive proposal for us and our shareholders.
And we have a strong financial base to do so. So yes, both strategies are valid, and can work in parallel and can work together very well.
Mm-hmm.
Calling out Growing Together.
Perfect. To come back to the US margin, obviously pre-pandemic, you were below 4.5%. Post-pandemic or during the pandemic, you've been above 4.5%. It sounds like the costs and the investments are self-funding to some extent. Do you think we should see US margins stay above 4.5% during the course of the plan?
We stick to the guidance that we've shared with you, that it is on average 4% over the lifetime period for the both regions together.
That would be stability in the U.S. margin, or...?
That's your third question.
Thank you.
Thank you.
Next question, yeah.
Colleague in the back there, and then I... Thank you.
Robert Jan Vos, ABN AMRO. Thank you. I have a question for JJ. Apart from the Stop & Shop outcome and maybe some store closures, you talked a little bit more about store expansions in the US than what you have shown in the past-
Mm-hmm
Few years. It was pretty much flat. What number of stores should we think of? Is that a couple of hundred, or is that less than that? And related to that, is that fully by choice? Could you open stores if you wanted to, or are you dependent on opportunities, small add-ons, add-on M&A, or could you easily open stores?
Yeah, good. Thank you for the question. Maybe just building on the question up front as well. So if you look at the portfolio assessment that we, we've done across the 54 DMAs that we have since 2019, we've seen good, strong market share growth. In about 29 of those, we've seen more than 100 basis points in growth where we have the number one or number two position. We talked today about, you know, a combination of new stores and remodel being somewhere around that 1,000 stores. Of course, the more of those will be remodels than new stores, given our store base, but there will be a significant uptick in new stores in that projection.
What we don't talk about a lot is we also have areas on the outer edge of some of our larger DMAs that we hold a 3 or a 4 position in, to where we can dense up. It's not a new market entry, but we're densing up. Think about the outer edge of the Food Lion regions. Think about the outer edge of some of the Hannaford regions. So a lot of those stores are ground up stores that would either be a new store, ground up, or we would take an existing store that perhaps the market's grown away from it a little bit, and we would offset it.
Food Lion has a really strong track record of offsetting right now, so it's a combination of remodels, ground up new stores, and of course, to build on Frans' point, you know, we still see opportunities across the US. If you take a look at the majority of our markets across the U.S. and south of the East Coast, 90 competitors bring up, I think, about 90% of the total share population, that there's an additional 3,000 independents in that same geography. So we believe that there'll be an opportunity for small-scale acquisitions like we've done in other of the brands in the US as well in the future.
We saw that the acquisition of the 70 stores BI-LO to Food Lion in the same type of geography. People know the brand, people know the supply chain, people know the company, and our team has been-
Yeah
Extremely strong in integrating that. It's almost immediately accretive. So I think that, what JJ is sharing with us, a stronger growth in, in store, in store fleet and in remodelings, and that with a very, very specific capital allocation to those brands, which are the strongest and where we have the biggest profit potential. And that is for us also, let's say, a new type of strategy going forward, and I'm also pretty excited about that. With looking at the brands, which have the opportunity, giving them more, more breadth and more energy to grow in their geographies.
Thank you. Then my second question is for Wouter. I think on your slide, on one of your slides, there was this 15% square meter expansion in the European region. Is that also including Profi, or is that excluding?
Including.
Including.
Yeah.
And beyond Profi, where do you see most opportunity for that?
Ooh, well, I have a whole wish list, but I'm not gonna share that. No, but I think, I think CSE, as we positioned it, there's a lot of opportunities, and we've strengthened the brands. But we also look in, of course, in at Albert, a very strong brand where we still have growth opportunities. In Serbia, we still have them also-
...Of course, now with Mega Image and Profi, we have, you know, our hands full in Romania. I still think also in the Benelux, where we've now strengthened also Delhaize and Albert Heijn in Belgium, we still see opportunities there as well. There might be not so much white spots, but more conversions, where we can maybe take franchisees or affiliates over to our brand. So there are still some other brands around, that we can maybe entice people in to come over to us. So we still see opportunity, and we also still see opportunity in e-commerce. And it's not only stores, but also e-commerce growth is still pushing us forward. Yeah.
Thank you. Yep, jump to you on the back seat. My elegant assistant will hand you the microphone. Yep.
Clément from Bryan Garnier. The first one on own brands, do you expect to be wise in own brands, will there be margin dilutive or rather margin accretive? And my second question is on Stop & Shop. Why not sharing any clear targets regarding your number of stores, will they be closed, or in terms of market shares and so on? Thank you.
I think the second question, I answered in a way, that you will see this in the course of this year, that position.
Mm.
For this, we need a proper decision-making, and it is also an impactful, decision to make, and all the pre-work has been done, by JJ and the team, so we know exactly where we intend to go. But we would like to make sure that we do this also in an, in a proper way, from a planning perspective, and also in a proper way, of a social perspective, too. So, you have to be a little bit patient, but, the year is not that long anymore, and then we'll get a little bit more there. On, margins of, private label, Wouter, accretion, how does that work?
Yeah.
Higher margins, lower margins, higher price, margin in cents and margin in percents, these kind of things.
You have a lot of questions.
Now, the way we have done it already is also a lot of, say, for our customer, money has been invested in price, also for Price Favorites, for instance. What you also do is with Price Favorites, we use the kind of like the own brand is, or the Albert Heijn brand, and we most of the time have excluded the C level brand, like the AH Basic we used in the past. So we also rationalized SKUs. That frees up space, which also reduces costs in a way, which we can again put in the margin of the product. What helps us immediately is you scale.
So if we want to lower the price and increase the quality of the product, we then also buy that together in Europe and also with other European retailers. So actually, that scale helps us to offset a decrease in your margin. So what we are trying to do is improve our price position, improve quality, but maintain the margin of the product. I must also say that some categories are more sensitive where you have to invest a little bit more in price to be competitive. But other categories, like fresh categories, like the cheese, the deli, deli cheese innovations, are most of the time more margin-rich.
Overall, you see that our gross profit is kind of more or less the same, but our price points has, have improved and, and also how we see it in the future.
JJ, any difference from your, from your side, or anything you would like to add for the US?
I mean, the only thing that I would add is, you know, we have a couple of different opportunities in the US, so at the same time, we'll be making some investments like, Wouter and team are doing there. We see a significant upside for scale potential in the US. We brought the two companies together back, you know, after the merger, the first couple of years, we're really focusing in on, Ahold had a legacy set of own brands, and Delhaize had a legacy set of own brands.
And so we've spent a lot of time really building the portfolio of brands that we have, and what we're doing now is we're focusing in on common specifications, common assortment catalogs, joint buying together, commitment to volume, and really looking at SKU rationalization, and then assortment planning from an integrated perspective, from a total category, taking both the national brand and the private brand together to leverage them. So we think there's a lot of upside potential, not only in growth, but margin expansion, but of course, some of the categories we'll be making investments in as well.
Quite some opportunity in the US. You heard, earlier, our own brand share in the US is roughly 31%-32% and growing heard uncertain for Hannaford with 35%, if you hear him clearly. So that means, as an average, we have also opportunities within the brands. In the Benelux countries, we have a 50+% own brand share. You heard Marit talking about 55% for Albert Heijn. So there's quite an opportunity of learning between the geographies and quite an opportunity, in the US also to grow, like the same for the CSE regions. That's why we're confident to raise that 45% target to the 45% target, because we see opportunities and learnings, across regions to do so.
What is interesting also, what people don't realize, that in the end, it's for customers also, a basket of, of own brands and national brands, which are important to us to have that mix. And it's also a way of loyalty and traffic, and, what cannot happen, what should not happen to us, that we lose customers also in times where value is getting more important. So that's why those Price Favorites, you heard a lot of them, or those price entry products, are so important to make sure that if a customer has a different choice in a week or a month or in a year, because the budgets and the wallets are changing, that in the store, he or she can make that, that choice. And that is so super important.
Private label, own brands, plays a role there to make sure that the loyalty is there, and that we keep the customer in store, and that he or she makes the choices there.
So as a whole, it supports our growth, but also our margins.
Yep.
But that's because of all those different factors that play a role.
It's a little bit more complicated than only a category or only, yeah, so yeah. I don't want to avoid the question, but it's actually more complex than we think. Yeah. Go to James, and then, then I come to you. That'll be mixed a little bit, the U.K. and the French.
James Anstead from Barclays. So the first question for JJ, so do correct me if I'm wrong, but my impression is that number of outright new stores you've opened in recent years has been very, very small number. I'm just interested, if that is the right impression, why it now makes sense to invest capital, opening lots of new stores when it didn't seem to-
Mm.
Do that in the past? And secondly, a question for actually Jolanda and Wouter. So on the Profi deal, obviously, there's a reasonable gap between that deal being announced and closing later this year. I don't know if you can give us either any numbers or kind of general reassurance that that business has continued to grow and be profitable in the way that it was historically. As a cheeky, kind of, third bit, I mean, you're kind of getting critical mass in that region, arguably now. It's getting quite big and quite different dynamics, perhaps, to the rest of Europe. Any temptation to start disclosing that separately to really highlight the growth there? 'Cause otherwise it gets a little bit lost in-
Oh, so four questions, James, already. We start with you, JJ. Why, why, store growth now, and then we go, then-
Go to Profi.
The left-hand side to Profi, yeah.
James, thanks for the question. To start with your first question on, is this different than in the past? In fact, this plan would have significantly more new store growth in it than our previous, but we haven't had as much in the past. You know, there's a couple of reasons for that. I mean, number 1, as we were going through COVID, we saw, like, an explosion of omni-channel. We spent a lot of our time developing our digital capabilities, building our e-commerce capabilities, maturing that business, and as you know, when you go from a business that almost doesn't exist to billions of dollars, it takes a lot of effort, time and focus to get efficiency in that and to really make sure that you're connecting with customers. But that's not the only reason.
The other thing that we were doing at that time is we were expanding the Food Lion business. We were strengthening the overall omni-channel business, and to be frank, the real reason why we feel like new stores are more of a path in the future than they have been in the past is we've built confidence in our abilities. We've built market share, we've built density in those markets, and we now have the courage and the confidence to move forward where we have number 1 and number 2, and moving from number 3 to number 2, or number 4 to number 3. And so that's a little bit more of why, and we're really excited about the opportunity and super confident in it.
Capital allocation, priority, where we see the biggest potential. I think those are... It's a new difference in choice we make now.
Yeah.
A number of you guys asked me already over the last years, "Why don't you grow faster?
He listens.
with Line, for example, so. But I, I think we have, we have, we are very determined here that that is an even better allocation of capital.
No, and we've invested a lot in the foundation that we now build on.
Yeah.
Profi, you start?
Yeah, well, there are, of course, limitations of what you can do. So we cannot interfere with how they run the Profi business. Of course, the teams are working and preparing integration. This is not the first time we've done this, by the way, so we have also extensive good experience of the merger, and also we've done other deals like Delhaize and Jan Linders. So we use that, and we're preparing the teams, but yeah, and unfortunately, we cannot influence, of course, how Profi is running its business. It's of course a market where everybody sees what's happening, so do we.
But yeah, we are banking on that, you know, the Profi team also really is looking forward to join. So, they have all the best interest to deliver it to us, as best as they can. So, it's on both interests.
Maybe two things, on top of that, James. One is, we cannot disclose more data now because it's under the-
Yeah
... authority's approval process. And the second thing is, we made agreements because the timing between signing and closing is so long, we made agreements that at closing, we look at the valuation of the business and look at the performance of the business to finalize the final price.
Yeah.
But with the public data available, we are still confident in what we shared earlier, that it is growth accretive, margin accretive-
Sure
... and EPS accretive post synergies. So we're looking forward to welcome them to the family as soon as formal processes have been closed.
And the timings, we knew already up front. This is not-
Yeah
... a surprise for us. This is what we have also calculated, and we're still looking at the same. Yeah.
If, uh-
Reporting it as a segment.
Yeah
... we, in the past, we did it, by the way. But,
It's not our intention at this point in time.
I think we just stick to the Europe and U.S. segmentation. Yeah.
Those of you who have a question for Natalia on this beautiful people and community element, or for Ben on technology or AI, or for Linn on legal, get priority treatment. Who has a question for the college there?
There, there's one here.
Yeah, Monique. Yeah, very good. It's a very selective process here.
Hi, it's Monique here from Citi. I do have one for Jolanda, but I've got one for Ben, so I'll start with the one for Ben. I'm just wondering, obviously, you're talking about a lot of the processes you're bringing in stores in terms of, you know, the replenishment algorithms, the dynamic pricing, et cetera. Just trying to understand how much ability people in store or the store managers have to overwrite some of those processes, and whether that creates any issues in the operations.
They have minimal opportunity to overwrite once the-
... They've done their bit of handing over to the process. So on Dynamic Markdown, the store needs to sort of flag the product, and they, we give them some help in confirming that the product is as we suspect it is. And on replenishment, when you move, and we're kind of talking a little time ago, going in history, really, this isn't a new thing. When you move to an automated replenishment process, then the role of the store in managing stock is radically different, and we're kind of through that already in most of our brands, through that transition, where the role of the store is increasingly about book stock accuracy and counting, rather than making recommendations.
There's a limited opportunity, particularly in our franchise operations, for them to dial up and dial down and add a little bit of assortment to the range. But broadly, on the core range, it's when the machine is driving the process, and we monitor that from the center, and we talk to the stores, and we take feedback about what their experiences are and how we can improve, but-
Like Noortje said, our systems get smarter over time.
Yeah.
So where in the past, people didn't see nice weather coming, and the store manager made adjustments on the reordering process, now the algorithms can more or less see that coming. So I think our systems also got better, so less need to make an intervention. Your second question was for Natalie, Natalia.
Second question for olanda, just on the complementary income stream.
Yep.
So the EUR 3 billion target-
Yep.
For 2028, I think you mentioned that that's a doubling on the expanded definition versus 2023, and I just wanted to understand, because I think the last we'd heard at around 2Q last year, that complementary income we were hearing was at about EUR 500 million, rather than EUR 1.5 billion.
That's why I mentioned in a sense, and it's a widened scope. So there are three buckets now in our complementary income streams. It's about business commercialization related to, for example, the fee that we receive from third parties for using the platform of bol. It's about commercial services in store, for example, selling gift cards, and it's about data and retail media. So we've found new opportunities going forward, so we've broadened the scope, EUR 1.5 billion in 2023, and we're doubling it to EUR 3 billion in 2028. That's the ambition. But the former ambition was a subset of that scope. And if you take that subset, we envision to reach a EUR 1 billion, and we are well on our way to reach that target as well.
But that's a subset, so we will let go of that old definition.
The 1.5 definition is the same like the 3 billion definition?
Yes.
Okay, now-
We checked that. Yeah, we checked that.
There's no juggling here.
No, of course not.
So still doubling with the new definition?
Yes.
Thank you.
Are there questions for Natalia or for... Yeah, otherwise, I go to the colleague of Kepler Cheuvreux, because he was first in line, but-
Sorry, for Ben, if that's okay.
Oh, that's okay.
JJ, it's for JJ. We'll come back to you. We'll come back to you. No worries.
I'm curious, on the price investments that you're putting through, how do you get that message out to customers? Because there may be customers that have left Stop & Shop, who you know they've left, they still live in the area, how do you... Can you target them specifically? Do you have data on that to be able to say, "This particular customer gets hit with a message?
Ben, me or you?
You go for it, JJ.
Yeah, so there's, there's a lot of ways, and we could have a long conversation.
Good question, by the way, huh?
Mm-hmm.
Because I used to work in marketing. So, if you take a look across—if you look at Stop & Shop specifically, there'll be a number of things that we do. So we'll take a broadcast media channel, so we'll take TV, radio, out of home, we'll take ad flyer. We've revitalized the entire in-store package, the decor package. We've redesigned pricing, architecture, messaging in the store. So what you see up high, what you see at eye level, what you see on the shelf tag. We've got new locked-in deal savings. So just think about the store itself as being restructured around the price investments that we're having. That's one method. We'll support that, of course, with broadcast, as I said, but we also have the ability to send personalized offers to customers. You do that in a couple of different ways.
You could do traditional, but still effective direct mail. We also take personalized offers through loyalty, our Go Rewards program. And then, of course, online, we have the ability to follow the shop and then incent customers, either from a price perspective, which might be highlighting our price investment and/or shifting them from a national brand to a private brand in a like, in a like category. So we'll apply those methods, depending on the pricing target that we're trying to get to, depending on the market we're trying to get to, we use a wide variety of those options.
Mm-hmm. And Natalia, I heard yesterday a question coming to me, so I share this with the group here.
I think there is.
A question on the left here.
I had a question.
For Ben.
Oh, for Ben.
Okay, there's that...
Natalia may answer.
We talk about SuccessFactors. I come back to you. I first come back to you, but come back to you. SuccessFactors, 400,000 people on SuccessFactors, the SAP tool, where we're so rich in data and therefore also people in HR data. What kind of opportunity does that give to us to or to be more efficient or do a better job of that people feel included in our company?
... Well, many, many ways. First, I talked about the paperless, seamless process that just simply gives time back to everybody. Then it's about data quality. We have, as you know, lots of reporting responsibilities, and they're only increasing with the CSRD legislation and others, and we share things in our annual report and have 400,000 associates in one system of record with consistent templates and data that we can compare and contrast is very useful. But also, in our global data lake, we have the data of all of our associates, where we can combine data of ten-year performance, feedback, predict, you know, who can become the best store manager, most effective store manager, what are the main, main productivity levers, and how also the demographics is evolving.
So looking at workforce planning, but also how diversity factors will evolve if we change something or we don't. So, we have quite a cool team of data analysts in HR, and it's great to hear Karen works for HR, so you can see that data is also sexy in human resources, to predict all those things, and SuccessFactors is one of the tools that allows that.
We share quite a lot of passion on HR data, because the things Natalia mentioned, but also to recognize and discover talent in your organization, building the benches, building the succession planning, and getting to our overall targets is, for us, very important. But also that is an addition to our performance of the company as well. I go to you, because I skipped your hand already too many times. Sorry about that, but yeah.
Thank you. François Digard from Kepler Cheuvreux.
Yeah.
Just, about complementary revenues on the profitability, we can assume that some part of it's retail media, so highly profitable. So one could have expected some margin accretion in the future. Is your target implies that all, or at least most of the profits from this new stream is going to be reinvested in market share gain or on growth?
The complementary revenue streams I mentioned, together with the safer customer, fuels our whole strategy, and indeed allows us to invest in our customer value proposition in tech enablement, in our sustainability, and that, in itself, drives the growth of the whole model again. So the assumption is indeed right.
Yeah. Go to Charles. Good to you?
Yeah, Charles Allen from Bloomberg Intelligence. I mean, just another question on the media part of the complementary revenue. First, do you expect it to be actually incremental income, or is it just going to be the brands reshuffling how they allocate money to you, and so that you maybe won't get quite so much promotional funding, but you will get some digital media money? And then, secondly, how do you square it with your ambition on own brands? Because basically, you're saying that you expect the national brands to pay you more in digital media, but you want to reduce their market share within your store.
So, let me distribute the question, the second question, maybe to JJ.
Yeah.
The first question: What does it mean, Wouter, in Europe? Is it incremental money, media monetization, or is it replacing other sources of income, and is, in the end, a zero-sum game? That's what Charles is assuming.
Well, at the end of the game, it's not a zero-sum game, but there are shifts, because also in the Benelux, we see that in some cities, we are not allowed to bring brochures anymore, and so the paper folder is disappearing, and we have to go digital. And so there is a shift. The only good news is, with digital, you're able to do much more than you used to do with the traditional brochure and the weekly ad. So it is increasing, but some is indeed shifting. But there are also new media points, with...
The good news about an app, you can do it daily, you can do different things in the morning, because mindsets of people are different in the morning than in the afternoon and in the evening. We can do it daily instead of, like, a weekly ad. So the dimensions that you have and the opportunities that you have are much bigger than the traditional, you know, folders and brochures that we used to have. So there is some shift, but there is a big
Let's not forget, we have the primary customer data, and we were very conscious about having that protected for ourselves, with consent of customers, anonymized data, data insights. So also for CPG, FMCG companies, this is extra value they did not have before. Personalized, targeted, better conversion rates. So for them, it's also worthwhile and a good investment, to spend more money in this direction, partly on top what they did already, partly, like Wouter said, replacing other functionalities. The net, net gain is positive, and comes at a pretty high, pretty high margin component.
Mm-hmm. The other opportunity, and then I will hand it over to JJ, is actually our own brands, because we indeed didn't have a lot of money to promote our own brands. But now, since we also own our own media channels-
Yep
... we can make ads of Perla, we can make ads of Nature's Promise and broadcast it in our own stores, broadcast it in our own apps. So we have actually much more, kind of like, clout to promote our own brands. And I think that is the same in the U.S.
Yeah.
JJ?
Yeah, Charles, it's a good question, and I think it's, it's been pretty well answered, but I'll just add a little bit from a, from a US perspective. I, I think just to keep it kind of simple, I mean, at the end of the day, the CPGs, in most cases, are already spending these dollars. They're national, they're national media dollars that they're spending, and typically, they're either spending them through national media agencies with broadcasts and/or through FSI dollars, coupons, and those types of things. And what they're typically doing is going with big, broad reach in a market like a Charlotte. And to Frans's point, what we're able to do, is we're able to share our customer data, all optimized, of course, and we're able to target more specifically groups of people.
So really, this, if you think about the CPG, they already know what return they're getting. We know what return we're getting, and we're offering that as a publisher, we can give them a better return for their dollars. And so that's why we believe that the dollars are incremental. Is every single dollar incremental? For sure not, but a large percentage of those dollars are incremental because they're being spent in other publishers today, so that would be one point. From, from your point on, us trying to grow private brands, and does that get into their share? Of course, we want to grow as much private brand as we can, but we partner together really clearly with CPGs. We want to grow our total business together.
The reason why we believe that we can do both is we have huge upside potential for market share growth generally in the U.S. And in addition to that, we think that we have a lot more upside to get a more fair share for private brand. But at the same time, the CPGs will get a return, because in order to get an impression, you have to click on something, so the customers have to see value in it. And at the end of the day, you don't earn the U.S. dollars for it unless you're selling product, unless you're getting application of the media. And that's why we feel comfortable that it's incremental, and we can continue to grow it.
How good is our capability to share to CPG companies, how effective conversions are? Or how good our data are? How targeted it works back to them, because you have a whole cockpit on this, right?
Oh, yeah. We have... First of all, it's very good. So it's a part of our, it's a part of our negotiations. We know what our conversion rates are. We look at our conversion rates. We look at our bounce rates. We know where, where we're losing people with traffic through the system. We know which items at the top of the fold or the bottom of the fold are, are best performing for CPGs. But in addition to that, we partner with them to try to help understand kind of how we can grow the basket based off of what customers are looking for with us, not what we're trying to sell them, but what they're looking for, so that we can continue to grow.
The technology that we implemented last year, Frans, we saw a 30% increase in our overall media income as a result of that. So our capabilities are improving, and we're continuing to make them better over time.
We said this morning with journalists, Linn, journalists who said, "Okay, data, and who owns that data? And how do you work with privacy legislation and consent and all these kind of things?" Ethical use of data, legislation, privacy, what is our position here, or how do you look at this?
Well, it's something that's certainly very important to us, particularly in the US. It's a bit of a challenge, because we don't, like here in Europe, we don't have like the GDPR-type legislation in the US. So, what we've seen in the US is states take the lead, and we're seeing different state-led initiatives around data protection and data initiatives. But we've... It's really been a nice way for us to learn from our European colleagues. So, because GDPR had been implemented here, we were able to partner with our European colleagues, learn from that initiative, and help build a platform in the US so that we're able to comply with these laws in a very efficient way, a very scalable way.
Because unfortunately, states have different ideas about how they would like to implement these data protection rules. So it's been quite a nice partnership and quite a nice, good example of how we can learn from one another as a portfolio company.
You're already working now more than four weeks as Chief Legal Officer of the group.
Yeah.
How long are you with our company? How long are you with retail? Say two words that people-
Sure.
Yeah.
I've been with an Ahold Delhaize company for over 25 years. I started in 1998, working with the Food Lion brand, where I met JJ many years ago. And so, I've been a practicing attorney for over 30 years, with the company here for over 25 and in retail all that amount of time. So it's something that I've really enjoyed, and-
Strong combination with Jan-Ernst in the last eight years.
Absolutely.
So, I'm very happy that Jan-Ernst did an excellent job for us, but also I'm very happy that Linn is joining us. A lot of experience knowing retail, knowing Europe, and knowing the US, so an extra good addition to the team. Who else? Are there... Please, of course.
Burning questions.
Burning questions, of course, sure.
Hi, Emmanuelle Vigneron, HSBC. You didn't speak a lot about bol. com. Does it mean that it is not a strategic asset anymore? What are your targets, your ambitions for, for bol? And just a precision, you have a target of 45% share in terms of private label by 2028, but what is the current level today?
... Shall I get the last one or the first one?
The last one is a quite easy one, but go ahead.
That's why I want to take it. 38%.
Sorry?
38 geographies 38%. That is a very precise, typical CFO answer. So, on bol, we are very proud about bol. I think Wouter told a lot about bol already. Very proud about bol, a good company, gaining share, almost twice the size of the number two in the Netherlands, way out, the leader in Flanders, the Dutch-speaking part of Belgium. So very happy with them. A lot of plans with bol on more categories, on attracting even more partners on the platform, which grew tremendously to 50,000 partners on the platform. 60% of the business of bol is coming through the platform. Like Wouter said, the other 40% is our own retail sales. So very happy with them.
The only thing what I said is that, our plans, which we shared with you previously, did not fundamentally change, but we now concentrate on growing the business, getting the business even more efficient. And we have, with our existing warehousing capacity, we have capacity to grow, so there's not a necessity now, which we saw during COVID, a big spike of sales, and then we said, "Okay, we have to invest more." And I think we also mentioned to you earlier that as this big spike is not there anymore after COVID, and the market is softer, we also, let's say, reduce that, capital expenditure, ambition. And with the present capacity with bol, under the present CapEx envelope, we can, grow very nicely.
And bol has a five-year view on the future, and we have good reserves in the back of our pocket. If we might need more capacity, then we are able to get it on, but that is to be seen. So happy with bol, and what I said, yeah, and what Wouter said, the markets at the moment are not so great to let's say to bring our earlier plans into action. So let's see how that works. We have plenty of things to do. Margaret does an excellent job with bol, getting the business better, getting the business more efficient, and she took the measures which we which we expected to be. bol is an EBIT profitable company for those who might not have understood that earlier.
So also there, it's a good running business for us. Is there one last question? In the back, please. Shall we do two more questions, JP, invisible JP, what do you think?
Sounds good to me, Frans.
Okay. So-
He's there.
He's there. He's awake, yeah.
He's always awake.
Yeah. All right, hi. Michiel Declercq, KBC Securities. It's going a bit further on the, on the online topic as well, not necessarily on the bol, but also on the, on the home delivery. We saw a very nice center in, in the past days. I think this, yeah, what was highlighted also is that this helps quite a bit with the, with the productivity and the, and the profitability. Some centers are still manual. Is there something included in, in the CapEx budget to further, yeah, make these other centers also more technologically advanced, or how are you looking at, at this to improve the profitability? And the second question would be returning a bit to the, the first topic on the Stop & Shop, not talking about numbers, but I'm just trying to understand.
It's been struggling a bit for the past years, let's say. Why the decision has come now or what made you believe that now is the right time, that Stop & Shop will not reach, in some places, similar levels as Food Lion or Hannaford, for example?
Mm-hmm. JP, would you like to give some color on that question on Stop & Shop?
Yep.
Then we go to automation, mechanization, and the further profitability of e-commerce.
Yep. You know, I wouldn't compare the Food Lion and the Hannaford and the Stop & Shop together. What we're saying is that there's a certain part of the Stop & Shop geography that we think can be very successful. And then if you take a look at its core markets, and you take a look at those remodels and how they're overperforming those stores that haven't been, that we believe that there's strength there, that there's equity there, and that with further investment, further discipline, that we can grow it.
There's also a number of assets that we'll talk about later in the year, that we don't believe is the right fit for our long-term portfolio, and so as we've evaluated that, over the last 12 months, we believe the right decision is to focus in on our core markets so that we have a better effective use of our dollars, better effective use of our people and our, and our resources.
Wouter, a few things on the first question?
Yeah, no, the Barendrecht solution is definitely helping a lot in our journey to become more profitable with e-commerce. We have a couple of other home shop centers in the picture. The way Jolanda is teaching us about the 3% CapEx, you have to operate within it. So, the trade-offs, where do we invest versus stores, versus countries, versus warehouses, versus automation, is most time what we do here together, so that it's definitely calculated within that 3%. We have a second one coming up in Zwolle, so we are learning and ultimately, I would say in the Benelux area, we hope that this is the solution for helping the home shop centers.
In other countries where the productivity requirements are not so high yet, we are not, because it's also an expensive solution, we are maybe not doing that yet.
... Mind you, that if you wanna make e-commerce profitable, there are a couple of levers, yeah? It's not only about the productivity of a home shop center, but it's also about the baskets, about the routine. So if you have customers who every Monday order, and if we can increase that basket from 90 EUR to 120 EUR, then they suddenly become also profitable. We also growing a lot in the B2B sector, which is the small offices and the small entrepreneurs. That's also a very profitable sector for us. So there are many other areas where we can also improve our productivity and profitability of e-commerce.
What is also clear, just to give a little bit context, Jolanda said very transparently, we are not, we will not be fully allocated, profitable e-commerce by 2025, but we need a little bit more time. The main reason for that is that the bol volumes are much lower than we expected it to be. That whole discretionary non-food market did like this. If you see that in the mix with a profitable, EBIT profitable bol business, then you can understand why it takes a little bit longer.
The progress made in all our brands, if it's the pick from store at the U.S. brands, if it's the mechanization Wouter talks about, at Albert Heijn, if it's the growth of our business, the double-digit e-commerce growth of our business, then we did a very good job to come much closer to profitability. So, we have now to do it more alone with the food business in itself, but we're on a good trajectory. And the decisions we took last year on getting more self company-operated fulfillment, next day delivery and these kind of things, in our own operations to close that business and transfer that to pick from store operation in the US is very helpful. The elements Wouter mentioned are very helpful, growing your basket and these kind of things.
Mechanization environment is going to help. So, and of course, we also see that there's a very strong correlation between e-commerce and online, and media monetization, too. So, I'm hopeful that we're on the right trajectory, and we made a lot of progress. A little bit long answer, but just we should all understand a little bit, the mix, also, where bol plays in, in the total mix of fully allocated. And we are super integrous on how we calculate this. Fully allocated means everything is allocated to that business, also a part of the store operations, and the so we it's not an incremental variable cost, so we have a fully allocated type of business model. Last question, if there is one last question? Yep.
Your last one.
That's really the last one, because we are already a little bit over time.
Last question.
Thank you, and so this one's for Natalia, actually. You know, we've, over the last couple of days, seen some of these marvelous robots and technologies in your automation centers. And I'm gonna phrase this as diplomatically as I can, which is possibly not as not very well. It seems that one of the key challenges with maximizing the return on these automation centers is the pre-existing labor arrangements, particularly unionization. How do you think about responding to that and making sure that you can satisfy both the sort of human element of that transition to automation?
A good question, and the question we have experience with. If you look at some of the distribution centers in the Netherlands that are automated, we talked to with our works councils, with our CLA partners, on what that transition means for our people. So these were transparent conversations, where what we saw, it adds to profitability, to efficiency, effectiveness of how the distribution centers run, but it also increases safety. It also changes demands on the jobs. Instead of lifting, carrying heavy boxes, putting them up high, et cetera, people are now more focused on quality checking, using AI, picking different boxes. Their schedules are more comparable with their livelihoods.
So actually, we're finding that technology is not necessarily always an obstacle in our conversation with social partners, but how it adds to human job experience, we find a good, productive dialogue, and we were able to implement changes in partnership.
Thank you, and that's much more diplomatically than I did.
Thank you very much for being with us today.
Yeah.
It has been a long time you invested in our company. We are very grateful for that. I hope it was productive for you both with the visits yesterday and this morning. I would like to thank you, and I would like to thank all the folks online, too, for your presence and being with us as well. Like Ben, AI predicted 1,200 people online, so that is also pretty massive. So thanks for that enthusiasm and that commitment. I would like to thank, of course, my team here by delivering a good day and together engineering this Growing Together strategy.
And I would like, not only, like, to thank the invisible JP who did a tremendous job to make it here also for our investor community in a good event, but also would like to thank his department. I would like to thank also all the people around Ahold Delhaize who tried to organize such a day, and you can imagine this was quite an amount of work. So thank you to all the support teams. Thank you, JP, to you, and your department, and thank you very much for being here. After this session, we are open here for hosting for a small snack and a small drink, and keep in touch. There will be more questions coming from your side.
Our investor relations is open for all those questions. Same are our sustainability teams, open for all the questions you might have. That was also a very productive session. See you later, and see you at least in the next quarter, as I suppose. Thank you very much.
Thank you.
Thank you.