Ahold Delhaize has released its Q2 results, reporting that pro forma net sales increased by 3.4% to €16.0bn (up 1.9% at constant exchange rates). Q2 net profit increased by 68% to €355m, driven by savings from the merger between Ahold and Delhaize.
Ahold: USA & Netherlands drive growth, Czech flat performance
Within the Ahold side of the business, growth was driven by operations in the USA and the Netherlands. Ahold USA saw net sales excluding gas at constant exchange rates increase by 4.6% to €5.5bn. In the Netherlands, net sales excluding gas increased by 4.6% to €3.1bn.
In the Czech Republic, however, performance was virtually flat, with net sales at constant exchange rates only increasing by 0.1% to €403m. The retailer advised that, 'the competitive landscape in the Czech market remains challenging, with competitors continuing to compete on price'.
Ahold USA highlights: produce, bakery, price reductions, organic and free from
Ahold USA's Q2 successes included:
- ‘New produce department rolled out to 688 stores, new bakery to 640 stores, showing volume uplift; rollout of both to be completed in Q3
- Price reductions on 1,000 items, additional media campaigns and strong weekly ads drove solid growth
- Nature’s Promise organic and free-from brand continued to show strong growth, up 18%’
Ahold Netherlands highlights: innovation, health and personalized promotions
Meanwhile, in the Netherlands, successes included:
- 'Leading in choice and quality: new assortment of over 600 products launched, and quality of over 500 products improved in H1’16.
- Successful initiatives in produce to support a healthier lifestyle.
- Introduction of weekly personalized promo offerings
- Successful virtual reality campaign with dinosaurs for kids'
Delhaize Q2: growth across USA, Belgium and South Eastern Europe
Elsewhere, Delhaize US saw 'real growth' of 3.9% and continued solid comparative store sales of 2.9% at Food Lion and Hannaford, despite 'persisting retail deflation'.
In Belgium, Delhaize delivered comparative store sales of 2.1%, 'driven by performance of affiliated stores and inflation'. Despite this, the retailer said that company-operated stores were lagging in expectations.
Meanwhile in South Eastern Europe, Delhaize enjoyed 'continued strong comparative store sales at 8.7% driven by Romania and Greece'.
CEO: merger on track, expect to deliver €5bn in online consumer sales by 2020
CEO Dick Boer said, 'A year after the merger between Ahold and Delhaize, the integration of the two companies is fully on track and delivering results as we continue to focus on strengthening our local brands through our Better Together strategy. We expect to achieve gross synergies of €750m by 2019, of which €250m will be reinvested in our brands'.
On the future of its online business, he added, 'We have a successful omni-channel strategy in place that combines a thriving network of brick-and-mortar stores with leading online businesses. We are accelerating investments in our eCommerce operation to further unlock their promising growth potential. We expect close to €3bn of online consumer sales in 2017, putting us on track to achieve nearly €5bn by 2020'.