Ahold Delhaize Q3: +2.1% to €15.1bn

Date : 08 November 2017

Ahold Delhaize has released its Q3 results, reporting that pro forma net sales at constant exchange rates increased by 2.1% to €15.1bn. Meanwhile, ‘income from continuing operations was €362m, €127m higher than last year’.

Net sales driven by Netherlands, Delhaize America and CSE division

The Netherlands continued to drive performance, with pro forma net sales up 4.1% to €3.1bn, while like for like sales increased by 3.6%.

Elsewhere, in Central & Southern Europe, pro forma net sales increased by 3.1% at constant exchange rates to €1.4bn. This includes the retailers operations in Romania, Serbia, the Czech Republic and Greece.

Meanwhile, at Delhaize America, pro forma net sales increased by 2.2% at constant exchange rates to €3.9bn. Like for like sales increased by 2.3%.

Performance less positive at Ahold USA and in Belgium

At Ahold USA, pro forma net sales increased by 0.8% to €5.7bn, while like for like sales excluding gas increased by 0.7%.

In Belgium, net sales were flat at €1.2bn, while like for like sales declined by 0.3%.

Netherlands highlights: optimizing customer experience, private label and omni-channel

Highlights from the Netherlands included the work Ahold Delhaize is doing on ‘optimizing [the] customer experience using data analytics at Albert Heijn’. This has seen it deliver '14 million weekly personalized offers to more than 2 million customers’, as well as take learnings from Peapod on predicting shopping lists.

The retailer also recognized ‘continued improvements in own brands’, which saw ‘Albert Heijn [receive] “Best Buy” awards for quality improvements of own-brand products’ while the ‘Delicata [chocolate] and Perla [coffee] heritage brands [were] relaunched with new designs and new products’.

Lastly, Ahold Delhaize presided over ‘ongoing investments in omni-channel’. This resulted in ‘the roll out of [a] subscription model at ah.nl with free delivery at a flat fee’ and the piloting the Rappie online service, which offers delivery in two hours.

One key event for the retailer's Bol.com website later this year will be Singles Day' on November 11th. CEO Huub Vermeulen has said that he expects 'Singles Day to produce the same effect' as Black Friday, which was a record day last year on Bol.com.

Belgium highlights: store openings and renovations

Meanwhile in Belgium, 18 new stores have been opened so far this year, while plans to renovate 120 stores this year are on track.

Central & Southern Europe highlights: Romania & Serbia, Etos, online and loyalty

Elsewhere in Europe, Ahold Delhaize recognized ‘continued strong sales performance in Romania and Serbia’ and the introduction of Etos health and beauty products in the Czech Republic and Romania.

In other news, Ahold Delhaize's fascia in Romania, Mega Image, has launched its own online grocery platform, mega-image.ro. The platform offers 20,000 products, available for collection or home delivery. Mega Image previously began a partnership in 2014 with online platform eMAG.ro to introduce an online grocery service.

Meanwhile, in Greece, the retailer is ‘piloting digital personalized communication’ with the AB Plus loyalty scheme.

Delhaize America highlights: volume, Easy Fresh & Affordable and loyalty

Highlights from Delhaize America included Food Lion’s ‘volume growth for the 20th consecutive quarter’, with the acknowledgement that the format is ‘successfully facing new competition in the Carolina’s'.

Meanwhile, the retailer is continuing to roll out its Easy, Fresh & Affordable program. This has driven performance in Charlotte and Greensboro, North Carolina. A further 160 stores are due to be refurbished in 2018.

In other news, loyalty programs have been developed and enhanced. This includes the launch of Food Lion’s mobile app, personalized ‘shop & earn offers’ and the introduction of the digitalised ‘My Hannaford Rewards’ programme.

Ahold USA highlights: private label, digital and Peapod

Meanwhile, at Ahold USA, the private label range of 20,000 products represents 38% of sales.  Developments include the extension of the Nature’s Promise range to include 1,400 products and it is on track to build ‘a $1.5bn brand by 2020’.

Other work included ‘strengthening our digital capabilities’. This has resulted in the retailer ‘gaining one million new digital users over the last year’, an increase in website and app traffic and record use of personalized digital coupons.

Peapod also continued to strengthen its ‘leading position’ on the U.S. East Coast. This has been supported by growth in 'Podpass', which offers unlimited free deliveries for a low annual fee. The programme has high renewal levels and growth in total spend. Other highlights included more voice-activated technology and implementing learnings from ah.nl.

Outlook: €5bn online sales by 2020, €750m in gross synergies by 2019

Looking ahead, Ahold Delhaize expects to deliver ‘nearly €3bn online consumer sales in 2017, close to €5bn by 2020’.

By 2019, it also hopes to deliver ‘€750 million gross synergies, of which €250 million will be reinvested in our customer proposition, in addition to the "save for our customers" savings'.

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