Dutch retailer Ahold Delhaize — owner of grocery behemoths Giant and Stop & Shop — has acquired a majority stake in supermarket delivery startup FreshDirect amid an online shopping surge propelled by COVID-19.
“We are strong believers that the future of grocery retail involves getting customers the best quality food, exactly when they want it, with the best customer service. We have built FreshDirect into a reliable and recognizable business to serve this purpose,” David McInerney, chief executive officer of FreshDirect, said in a statement on Thursday (Nov. 19).
He added that the deal is “an important milestone in the continued growth of FreshDirect.”
FreshDirect will retain its brand name, report to a seven-person board, and continue to independently operate in New York City. The deal, expected to close in the first quarter of next year, includes a minority investment from Centerbridge Partners, who will get a 20 percent stake. No financial terms were made public.
“Ahold is determined to get bigger to compete with the heavyweights like Amazon and Walmart,” Jon Springer, executive editor of Winsight Grocery Business, told CNN. “FreshDirect gets a parent with real buying power and the means to further expand in East Coast markets.”
Delhaize, founded in 2016 from a merger of Ahold and Delhaize Group, is among the biggest supermarket operators in the U.S.
FreshDirect has so far raised $189 million from investors led by J.P. Morgan Asset Management.
He emphasized the importance of the New York eCommerce market due to its huge population and the popularity of digital shopping.