Global food retailer Ahold Delhaize USA has invested $480m to transform the US supply chain into a fully-integrated, self-distribution model.
The latest investment is in line with the retailer’s three-year strategy, which aims to transform and expand its supply chain operations on the US East Coast.
Ahold Delhaize USA will use the fund for the acquisition of three distribution facilities from C&S Wholesale Grocers and leases on two more facilities. The total investment also includes $70m extra in lease commitments.
The company will also invest in two new fully-automated Ahold Delhaize USA frozen facilities.
The yet-to-be constructed frozen facilities will be built in the Northeast and Mid-Atlantic of the US.
The move to a new self-distribution US supply chain is expected to cut costs, enhance speed to shelf and vendor relationships, as well as improve the quality and availability of products.
Ahold Delhaize USA and Ahold Delhaize management board member chief executive officer Kevin Holt said: “Through this initiative, we will modernise our supply chain distribution, transportation and procurement through a fully-integrated, self-distribution model, that will be managed by our companies directly and locally.
“This will result in efficiencies and most importantly product availability and freshness for customers of our local brands, now and in the future, whenever, wherever however they choose to shop.”
The company said the investment will not materially impact 2019 results and the outlook provided on 6 November remains unchanged.
The company expects $160m in transition expenses for the first three years.
Last month, Ahold Delhaize launched its frictionless stores to the wider public in the US and Europe, following successful in-house trials.