RETAIL NEWS

Ahold Delhaize focuses on AI, intros tech lab

BY Deena M. Amato-McCoy

A new partnership is putting Ahold Delhaize on the ground floor of artificial intelligence (AI) technology development.

The international supermarket retailer is teaming up with the Innovation Center for Artificial Intelligence (ICAI), a Netherlands-based firm that jointly develops AI technology through industry labs with the business sector, government and knowledge institutes. The duo’s first order of business was to launch a lab committed to developing AI technology.

The ICAI-Ahold Delhaize industry lab, called AIRLab, features seven engineers that will research socially responsible algorithms that can be used to make recommendations to consumers and into transparent AI technology for managing goods flows. In addition, AIRLab will focus on talent development tracks. Research will be applied at Ahold’s Albert Heijn and bol.com banners.

“Artificial Intelligence offers countless possibilities for the retail industry, the consumer and society at large,” said Frans Muller, deputy CEO, Ahold Delhaize. “With this partnership, we want to further develop our ongoing initiatives and learn how AI can be used to better serve the interests of our customers.”

Specifically, the retailer plans to explore how AI can further optimize Albert Heijn’s supply chain. “We want to improve the availability of goods, for example, by taking into account local weather conditions,” Muller explained. “Also, we will investigate ways to make the assortment of bol.com even more accessible to customers. These insights and knowledge can be applied to our brands in the United States and Europe.”

Both partners set up shop in the Netherlands in hopes of leveraging the country’s “long tradition in AI education.” For ICAI, it is a chance to leverage resources outside of the traditional technology segment.

“The Netherlands has all the resources to take a prominent position in the international AI landscape – top talent, innovation strength and research at world-class level,” said Maarten de Rijke, director of ICAI, and professor of Information Retrieval at the University of Amsterdam. “AI will influence every sector of society. The partnership with Ahold Delhaize is of major importance because with it we are making a serious investment in the development of AI talent and technology outside of the traditional technology sector.”

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Fred’s CEO Bloom departs

BY David Salazar

Mike Bloom has resigned as CEO of Fred’s, effective April 24. The Memphis-based company said it has appointed CFO Joseph Anto to the position of interim CEO. Fred’s said Bloom’s departure, which included his resignation from the board of directors, was to pursue other opportunities and not due to a disagreement with the company or its operations.

Bloom’s resignation comes as it seeks to sell its specialty pharmacy business — a decision that has delayed the company’s full-year and fourth quarter results — originally set to take place April 19 — until May 4 for accounting purposes.

Mike Bloom“The board is appreciative for Mike’s contributions, dedication and service,” Fred’s chairman Heath Freeman said. “Mike joined Fred’s with significant experience with retail drugstores. After the company was not able to purchase certain assets from the Rite Aid Corporation and following the end of the 2017 fiscal year, the timing was right, both for Mike and the company, for him to step down. We wish him the very best.

Anto has been CFO at Fred’s for roughly two months, joining the company in February following a roughly eight-month stint as a consultant for the company that began in July 2017. For three years, Anto was senior vice president of strategy and mergers and acquisitions at MediaNews Group. He had previously been MediaNews Group’s vice president of business development and CEO at Jobs in the US.com, a MediaNews Group subsidiary. His previous experience also includes investment banking and venture capital.

“The Fred’s board is confident that Mr. Anto will serve the company well as interim CEO,” Freeman said.

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GNC to shutter nearly 200 stores

BY Deena M. Amato-McCoy

GNC plans to shutter stores across North America this year.

As part of GNC’s ongoing plan to streamline its store portfolio, the retailer will close approximately 200 stores in the United States and Canada in 2018. It also plans to limit its new store openings for the year.

“Efforts toward favorable lease renegotiations or relocation opportunities are ongoing and may impact the amount of stores closings,” according to the company.

The company ended the first quarter with 8,905 store locations worldwide.

For the quarter, net income was $6.2 million, compared with $24.7 million in the prior year. Earnings per share was $0.07, compared with $0.36 in a year ago. The company also recorded a $16.7 million loss on debt refinancing.

Revenue was $607.5 million, compared with $654.9 million in the first quarter of 2017. The drop was primarily due to the sale of Lucky Vitamin in September, which resulted in a $22.7 million reduction to revenue. Ending the company’s U.S.-based Gold Card Member Pricing loyalty program in December 2016 also resulted in a $23.0 million decrease in revenue.

Same-store sales increased 0.5% in domestic company-owned stores (including GNC.com). In domestic franchise locations, same-store sales decreased 1.9%. Despite overall sales declines, the company credited its brand mix and private-label weight loss product for attracting new customers and driving larger baskets.

Loyalty membership increased 12.3% to 12.8 million members, compared with December 31, 2017. Included in its loyalty membership are 935,000 members enrolled in Pro Access, a 23.6% increase, compared with December 31, 2017.

“During the first quarter of 2018, we continued to see the business improve, and were pleased with the progress of our strategic growth initiatives,” said Ken Martindale, CEO. “Notably, we delivered meaningful gross margin growth, driven primarily by increased penetration of our private-label brands. We continue to work to leverage our strength in innovation, expand our international presence and deliver a consistent, compelling experience at every customer touchpoint.”

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