business news in context, analysis with attitude

by Kevin Coupe

Yesterday, while going through a bunch of stories about the possible merger of Ahold and Delhaize, I saw one piece with the following headline:

Potential Ahold-Delhaize merger likely would form super retailer.

Now, I don't want to go all English professor here, but ...

If Ahold and Delhaize were to merge, it certainly would create a big retailer. Lots of stores - more than 2,000 of them - up and down the east coast of the US.

But a super retailer?

Let me suggest that we don't really know that. Not yet.

I would argue that the combination has the potential to be super, but only if, when combined, they focus as much on being effective as being efficient. That doesn't always happen when big companies merge their operations. The dollar signs they see usually have to do with things they can cut, not things they can add. "Economies of scale" is a term often tossed around with glee. They justify their moves by talking about cost savings, and when talking about the advantages of being merged, they use language that could have been used 20 years ago.

And because these mergers tend to be big financial deals, the companies involved can be tempted to pay more attention to Wall Street than Main Street.

I'm not saying that this will happen if Ahold merges with Delhaize. Only that the jury is out. Too early to judge either way. So let's be careful with our adjectives.

Here's the lesson of the day.

Big is not a synonym for super.

And if you think it is, and you get the two words confused, that's the beginning of nine miles of bad road.

And to anyone paying attention ... it is an Eye-Opener.
KC's View: