Ahold Won't Be Changing Stop & Shop's Name After All

Ahold (AEX:AH) has no plans to replace the Stop & Shop, Giant, Martin's and Peapod banners with the Ahold name, an Ahold USA spokeswoman told Supermarket News on Tuesday (April 9). That contradicts a Dutch business newspaper report that the retailer is considering a Unilever-style rebranding across all the company's U.S. chains.

The report in Het Financieele Dagblad (in English, "The Financial Daily") is "completely false," Ahold's Tracy Pawelski said. According to the Dutch paper, Ahold has not made a decision but is exploring the option of eliminating the banners of the individual U.S. chains it owns—the paper specifically mentioned Giant Carlisle, Giant Landover, Stop & Shop and online store Peapod—and rebrand them all as Ahold to bolster that as an international brand.

It's easy to understand why Ahold would want a single strong international brand—after all, that has worked well for Walmart. Ahold has expanded by acquisition in the U.S., and as a result while it's known as Ahold in the Netherlands, Slovakia and the Czech Republic, there's no unified American branding for the €30 billion chain.

Word that Ahold was considering the name change came shortly after the chain sold its 60 percent share of Swedish retailer ICA. That lends credence to the idea that someone thought now would be a good time to consolidate branding in the chains Ahold completely owns.

The problem—one that Ahold shares with Kroger (NYSE:KR), Safeway (NYSE:SWY) and some other U.S. chains that don't have unified branding—is that customers really love their grocery brands. They don't care if products in their favorite regional chain carry Kroger-labeled products, for example, but they're likely to howl (and maybe switch to a different grocery store) if the sign out front is changed. An extreme example of that showed up when the Albertsons chain was split in two in 2006, and each of the two new owners maintained identical Albertsons branding for years until the chain was reunified this year.

For more:

-See this Supermarket News story

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