Ahold Delhaize reports Q4 sales up 3.1%

Date : 12 February 2020

Harriet Cohen

Senior Retail Analyst

Ahold Delhaize generated net sales of €17.4 bn in the fourth quarter, a rise of 3.1% at constant exchange rates.

Its performance was driven by growth in the Netherlands, where net sales increased by 4.5%, and Central and Southeastern Europe, where they were up by 5.4% at constant exchange rates. At a channel level, Ahold Delhaize said net consumer online sales rose 30.1% at constant exchange rates, to €1.4 bn, during Q4.

The Netherlands drives growth in Q4

In the Netherlands net sales rose 4.5%, to €4.0 bn, in the fourth quarter, with comparable sales up by 4.3%. It noted the ‘strong market share gains’ it had made as the year had progressed, which was driven by a ‘successful holiday period as well as the positive response to Albert Heijn's new commercial campaign’.

The retailer said it continued to convert stores to its new fresh- and technology-focused concept. By the end of 2019 it had updated 123 stores, with a further 120 expected to be completed during 2020. Online, growth of net consumer sales rose 27.5%, ‘driven by the strong growth of both ah.nl and bol.com’.

Good progress at US operations…

In the US it said net sales rose by 2.7% at constant exchange rates, to €10.4 bn. Online sales rose 42.7%, reaching €299m during the quarter. It continued to enhance its stores, through its ‘re-imagine Stop & Shop’ programme, which it noted had seen updated stores perform ‘in line with expectations’. In relation to its Food Lion banner, Ahold Delhaize said it had recorded ‘its 29th quarter of positive comparable sales and volumes with market share gains’.

The retailer highlighted the introduction of Giant Heirloom Market brand, which is specifically designed for urban neighbourhoods. When we visited one of the brand’s first iterations of the design, we were impressed by how it enabled the local community to eat better for less. For subscribers wanting to see more on the banner, see our store visit here.

…As it announces Peapod is exiting Midwest market

In a separate announcement, from Ahold Delhaize US, it said Peapod was exiting the Illinois, Wisconsin and Indiana markets as part of a ‘strategic shift’. It said the closure would enable it ‘to focus on expanding the leadership position of its brands on the East Coast and execute its strategy of enabling each local brand to be the leading omnichannel grocery retailer in each of their markets utilizing the market-leading capabilities of Peapod Digital Labs’.

The company noted that from 18 February shoppers in the area would no longer be able to buy through Peapod for delivery or through click and collect options. It said that the Midwest division accounted for only US$97m of Peapod’s US$1.1 bn revenue. The company said despite its operational exit, Peapod Digital Labs, would remain in Chicago.

Positive performance in Central and Southeastern Europe division…

Ahold Delhaize said net sales in the Central and Southeastern Europe division rose by 5.4% at constant exchange rates, to €1.7 bn. The results were driven by comparable sales growth, excluding petrol, of 3.6%, with total sales aided by the addition of 162 net new stores, mainly in the convenience channel. The retailer called out its ‘strong performance in the Czech Republic and Romania’.

…While comparable sales growth stalls in Belgium

Despite total net sales growth of 0.2% and comparable sales growth of 0.1%, the retailer said Delhaize had ‘gained market share during the quarter, closing 2019 with its second consecutive year of market share growth’. Its performance was aided by online sales rising by 10.5% in Q4, to €16m.