Ahold Delhaize Q4 shows strong performance

Date : 19 January 2017

Announcing its first set of fourth quarter results, Ahold Delhaize has said that on a pro forma basis and adjusting for the impact of a 53rd week in 2015, its new sales rose 2.8% to €15.51 bn.

The retailer’s strong performance was driven by dynamic growth in the Netherlands, where they rose 7.5%, at Delhaize America, up 3.8%, and globally through the online channel, where net consumer sales increased by 27.9%.

Deflation still stalks US operations

Ahold Delhaize said that in the US, excluding petrol sales, comparable store sales contracted by 0.2% at Ahold USA, while they grew by 2.2% at Delhaize America. At the proforma level and at constant exchange rates the company said that sales rose 0.7% at Ahold USA and by 2.0% at Delhaize America.

Ahold Delhaize described Ahold USA’s performance as ‘solid’, while noting that at Delhaize America both Food Lion and Hannaford grew volumes ‘significantly’. Both divisions, though, were affected by deflation, with prices at the shelf falling by 0.2% at Ahold USA and by 2.2% at Delhaize America. Looking to the rest of 2017, Ahold Delhaize said that it expected positive inflation to return in the second half of the year, with a sequential lessening of deflation’s effects being felt as the fourth quarter proceeded.

Netherlands remained the standout market

The retailer’s operations in the Netherlands remained strong, enjoying comparable sales growth of 6.6%. The company noted the beneficial effects of innovations to its assortment and ‘improved service in… supermarkets’, while again highlighting the importance of its online businesses – both ah.nl and Bol.com – to its overall sales performance. At the company’s Capital Markets Day, online, and especially Bol.com, was called out as a strength for Ahold Delhaize, with this coming through in these results. More is likely to occur in 2017, following a busy 2016 that saw Albert Heijn extend its range of fulfilment options for shoppers to enable them to buy anywhere and at any time.

Belgium proving more of a challenge

Ahold Delhaize said that in Belgium, comparable sales fell by 0.9%, while total sales contracted by 1.0%. The retailer noted, echoing statements from previous quarters, that its franchised stores outperformed its company-owned stores. Ahold Delhaize said that it had put in place initiatives aimed at turning this around, which were hoped to take effect during 2017.

Romania a strength in Central and Southeastern Europe division

Across all its operations in Central and Southeastern Europe, Ahold Delhaize said sales rose 6.7% at constant exchange rates, while in comparative store terms they were up by 3.4%. The retailer spotlighted the strength of its operations in Romania, saying it had enjoyed ‘very strong comparable sales’, which had been boosted by continued expansion.