November 25, 2020
FreshDirect’s online grocery customers have nothing to fear, now that the company has been acquired by the Dutch owner of Stop & Shop and Food Lion, the grocery delivery service’s CEO David McInerney said on Tuesday, November 24.
The Dutch-Belgian grocery retail company Ahold Delhaize and New York City-based Centerbridge Partners, a private equity firm, are involved in the transaction. Financial terms of the deal were not disclosed, but Ahold Delhaize will acquire the majority stake and Centerbridge Partners will have a minority investment of 20%.
“Hopefully the only differences that customers see are the benefits,” McInerney said on CNBC’s “Squawk Box.”
The Dutch grocer already has a foothold in U.S. grocery e-commerce through Peapod, which was the first company to deliver groceries in the country. But FreshDirect’s specialty is fresh food, which represents about 60% of its total sales, and it has a higher market share than Peapod in the New York tri-state area.
McInerney said that he appreciated how Ahold Delhaize plans to preserve the e-commerce company’s brand. FreshDirect will keep its name and will still independently operate in its New York City facility.
“I think combining the knowledge of both companies, we can make it even more competitive and compelling,” Ahold Delhaize CEO Frans Muller said.
Stockpiling during the early days of the coronavirus pandemic made online grocery sales soar, and the trend seems to be sticking. Muller said that the pandemic accelerated Ahold Delhaize’s e-commerce business by several years.
“Being that we’re on top of our game right now … strong double digit-growth, we were naturally attractive, given where the world is in terms of adoption of online food,” McInerey told CNBC’s Becky Quick.
The deal is expected to close in the first quarter of 2021.
Research contact: @CNBC