Dive Brief:
- FreshDirect is implementing unspecified price reductions on a "wide selection" of center store items for all of its customers starting Wednesday, the New York City-based online grocer announced Monday.
- The e-grocer has also added 250 center store products carrying private labels owned by parent Ahold Delhaize to its selection.
- FreshDirect's latest moves follow the company's absorption by Ahold Delhaize earlier this year.
Dive Insight:
FreshDirect's decision to lower prices on many products and sell house brands associated with Ahold Delhaize's brick-and-mortar chains underscore the significance of the companies' merger, which the Dutch grocer described as key to its goal of establishing a deeper presence in the prized New York grocery market.
Beyond giving Ahold Delhaize access to FreshDirect's established customer base, the tie-up provided the online grocer with the opportunity to bolster its e-commerce business by leveraging Ahold Delhaize's financial heft and strong brand presence. Those tools appear to be making a difference for FreshDirect, which serves shoppers in seven Northeastern states and focuses on Philadelphia in addition to the New York metropolitan area.
According to the announcement, FreshDirect is investing in price reductions for its entire shopper base after offering the markdowns to about a fifth of its customers during a pilot earlier this summer. FreshDirect also said it intends to later add "hundreds more SKUs" to its assortment of products under Ahold Delhaize private brands like Nature's Promise and Taste of Inspirations, which are a mainstay at banners the grocery company runs in the United States.
Those chains include Stop & Shop, which operates alongside FreshDirect in New York. Stop & Shop also runs stores in Connecticut, New Jersey, Massachusetts and Rhode Island.
FreshDirect plans to promote the price reductions and private label offerings with a marketing campaign known as "Fall in Love with Fresh," the company said.
"We continue to integrate the stellar resources and expertise of FreshDirect and Ahold Delhaize to super-serve customers so they can address all of their grocery needs in one purchase," Scott Crawford, chief merchandising officer of FreshDirect said in a statement.
Speaking during an earnings call earlier this month, Ahold Delhaize CEO Frans Muller said the company had already begun to reap the benefits of its takeover of FreshDirect, which it completed in January in conjunction with minority investor Centerbridge Partners. Specifically, Ahold Delhaize has been able to build its omnichannel position in the New York region by aligning Stop & Shop and FreshDirect in a bid to attract and retain customers in-store and online, Muller said.
Muller added during the Aug. 11 earnings call that FreshDirect had started offering center-store products sporting house brands sold by Ahold Delhaize's Hannaford banner, which runs supermarkets in New York as well as Maine, Massachusetts, New Hampshire and Vermont.
