Ahold may not be able to successfully implement its strategy or may not achieve the anticipated benefits due to adverse macro-economic conditions and competitive pressures.
Ahold’s strategy for profitable and sustainable growth has several main areas of focus. We have realigned our portfolio to focus on our core retail businesses in the United States and Europe, building our individual retail banners into powerful local brands. We are using our continental organizational structures to ensure that management decisions are made at the most appropriate level and economies of scale and best practices can be effectively leveraged to support our local operating companies. In addition, we are working to meet our financial targets, including a €350 million cost reduction program and bringing a more focused and coordinated approach to our Corporate Responsibility program. For more information see Our strategy in this Annual Report. However, Ahold is subject to a number of risks, mainly macro-economic and competitive, that may impair our ability to effectively implement our strategy or realize the anticipated benefits.
The current global economic downturn has impacted all of the economies and markets in which we operate. Rising unemployment, reduced consumer confidence and disposable incomes and food and fuel price volatility can negatively affect customer demand and may negate the results of investments we have made through our Value Improvement Programs. The global financial crisis has restricted the availability of credit, which may impact customer demand, cause the failure of key suppliers or otherwise disrupt our supply chains, impacting the cost and availability of goods. As a result of the current economic climate, our competitors are taking aggressive actions. These factors or other unforeseen effects of the current economic climate could impair the effectiveness of Ahold’s strategy, reduce the anticipated benefits of our price repositioning and cost savings programs or our other strategic initiatives and may have a material adverse effect on the Company’s financial position, results of operations and liquidity.