William J. Grize, who oversees Giant Food and the other U.S. grocery operations of Royal Ahold NV, will step down next month, the Dutch company said yesterday.
Grize has been directing the merger of Giant, the Washington region's biggest grocer, with its corporate sibling, Stop & Shop. Ahold executives have said the merger, which shifted control of Giant to Stop & Shop, cost Ahold $15 million during the second quarter and diverted executives' attention from the day-to-day operation of the stores.
"Management's attention was on integration, to the detriment of operations," said Fritz Schmuhl, a spokesman for Ahold.
Ahold's second-quarter operating income in the United States dropped 29.9 percent, to 209 million euros ($253 million). Analysts said the decline in U.S. operating income is worrisome because Ahold generates 75 percent of its sales here. Ahold will report third-quarter earnings a week from today. Industry analysts who track the company do not expect its U.S. supermarket results to improve significantly.
Schmuhl described Grize's departure as a long-planned retirement. "He has been saying, very openly and for some time, that he wished to retire," Schmuhl said.
A spokesman for Grize did not respond to a message. But in a statement, Grize said it is "a logical time for me to begin my transition to retirement."
Grize may remain at Ahold as an adviser until April 2006, when he will reach the company's mandatory retirement age of 60, Schmuhl said.
In a report, analysts at Dutch brokerage house SNS Securities said the retirement "is earlier than expected."
Ahold has no plans to replace Grize. Instead, it will eliminate his position, formally known as chief executive of U.S. Retail, Schmuhl said.
The heads of these chains will now report directly to Anders Moberg, Ahold's chief executive in the Netherlands.
Grize joined Stop & Shop 40 years ago as a part-time employee and became the chief executive of Stop & Shop in 1997. In September 2000, he was appointed the head of Ahold U.S. Retail.
Barry F. Scher, a spokesman for Giant, said the Giant-Stop & Shop integration "is basically done."
Jeff Metzger, publisher of Baltimore-based trade publication Food World, said the merger "is not very successful." Giant's sales are lagging, he said, and the company "has not solved the puzzle of how to bring Giant back to where it was" before Ahold bought the supermarket chain in 1998.