Ahold Delhaize sold FreshDirect within three years of buying it (interview)

In an interview with Fortune published in December 2023, Ahold Delhaize CEO Frans Muller discussed why the Dutch owner of Stop & Shop and Food Lion was selling FreshDirect to grocery delivery service Getir less than three years after it announced the purchase in late 2020. The deal had been meant to build its e-commerce muscle and an inroad into New York City's online food market. Fortune described the sale as a 'misfire' that showed the challenges of grocery e-commerce.

Muller said the company 'learned that our type of consumer finds the omnichannel proposition of stores-plus-online easier'. FreshDirect is mainly in next-day delivery, whereas most of Ahold Delhaize's click-and-collect orders are same-day, usually within two hours, so using store staff for online orders is the more profitable route. Asked about the price, he said reports suggested $300 million and that it 'came at quite an expense'. He said the experience clarified what deals to pursue: 'what we truly believe in and what we can do well'.

These are Muller's own statements. He said the company aims to make e-commerce profitable by 2025, that e-commerce is about 8% of its US business, and that US e-commerce is growing at double-digit rates (self-reported in the interview). The interview did not give the sale price or any loss figure.

Reports suggest it paid $300M for FreshDirect; the CEO calls it 'quite an expense' and says it is 'unfortunate to buy something in 2021 and then sell it in 2023'.

FreshDirect's model centred on next-day delivery, while Ahold Delhaize's own shoppers mostly order same-day pickup within about two hours.

Running a separate online grocer did not use the existing store network and staff, which the CEO says is the more profitable approach.

The CEO says its customers prefer one brand combining in-store and online shopping.

Reports put the purchase price at about $300M, a heavy outlay for a business sold after under three years.

A stand-alone next-day delivery business did not suit shoppers who want same-day pickup from stores; buying a brand to learn that was costly.

Ahold Delhaize said it would keep building digital by integrating e-commerce into its stores, targeting profitable e-commerce by 2025, and Muller said the episode has not dampened his appetite for dealmaking. The sale to Getir had been announced the month before.