A History of The Ahold Food Company
..., Ahold was able to continue its global expansion into what is now known as Czechoslovakia, which was made possible due to the fall of communism in the region. The following year, Ahold acquired Tops Markets Incorporated of New York, and in 1992 it expanded into the Portuguese market as well (Royal Ahold). By 1993, Ahold was being traded on the New York Stock Exchange, as well as being publicly traded in Amsterdam, Zurich and Brussels. In 1994, Ahold furthered its presence in the United States by acquiring the Red Food Stores’ chain of stores, consisting of approximately fifty grocery stores in Georgia and Tennessee. In 1996, Ahold not only purchased the New England based Stop and Shop grocery chain, but it also expanded into several new markets for the first time, including Poland, Malaysia, Thailand and Singapore. Ahold then acquired the Maryland based Giant Food Incorporated grocery chain in 1998, and in 1999 made significant expansions in several different countries. These expansions included acquiring seven different companies with approximately 150 grocery stores in Madrid, Catalonia, and southern Spain, a partnership with ICA Group, the dominant food retailer of Scandinavia, and a partnership with the main food retailer of Central America, which resulted in new Ahold interests in Guatemala, Honduras and El Salvador (Royal Ahold). In 2000, the most significant of Ahold’s actions included its purchase of the U.S. Foodservice food distributor and the Chicago based internet grocer Peapod Incorporated (Hoover‘s Online History of Royal Ahold N.V.). In January of 2002, Ahold announced that its sales from the previous year totaled approximately 66 billion euros, shattering previous records for the company (Royal Ahold). In 2003, however, Ahold’s rapid growth pattern changed dramatically, as the company was faced with an increasing number of questions regarding its accounting practices. In early 2003, Ahold announced that due to financial irregularities at its U.S. Foodservice subsidiary, its financial statements for both the 2001 and 2002 fiscal years would be restated by at least 500 million dollars. As a result of these ‘irregularities’, both Cees van der Hoeven, the chief executive officer of Royal Ahold N.V., and Michiel Meurs, the chief financial officer of the company, announced their resignations (Economist.com - Ahold). Following the resignation of these two men, the company announced that its earnings had actually been overstated by approximately 880 million dollars, as opposed to the 500 million dollars it had initially predicted (Hoover‘s Online History of Royal Ahold N.V.). In addition to the massive financial mess at Ahold’s U.S. Foodservice subsidiary, it was also soon discovered that another of its subsidiaries, Tops Markets, had also overstated its earnings by approximately 30 million dollars (Royal Ahold). Later that same year, the Ahold company was faced with yet another challenge stemming from its accounting irregularities. In July of 2003, Ahold publicly announced that the Public Prosecutor in Amsterdam had launched a formal investigation into the company’s accounting practices (Royal Ahold). As a direct result of the company’s widespread financial blunders, Ahold soon began to sell off many of its interests in an attempt to raise funds. The subsidiaries the company sold include its Santa Isabel chain of stores in Chile, which was sold for a mere fraction of its estimated value and its Supermercados Stock chain based in Paraguay (Hoover‘s Online History of Royal Ahold N.V.). By October of 2003, the company had released its Annual Report for the 2002 fiscal year, which stated that the company had absorbed a loss of approximately 1.27 billion dollars. The same month, the company continued its attempt to raise funds to cover the increasing costs of its financial problems, by selling its Tennessee based Golden Gallon chain of convenience stores (Hoover‘s Online History of Royal Ahold N.V.). The following month, the company deve...