Ahold Delhaize 2020 Q1: +12.7% to €18.2bn

Harriet Cohen
Senior Retail Analyst

Date : 07 May 2020

Ahold Delhaize has reported that its 2020 Q1 net sales increased by 12.7% at constant exchange rates to €18.2 bn. The retailer acknowledged impact of COVID-19, with Group comparable sales being ‘favourably impacted by 26.9% growth in March’.

 USA: Q1 +13.7%; comparable sales in March +33.8%

Performance was driven by comparative% in March due primarily to COVID-19’.

Europe: Q1 +9.8%; comparable sales in March +15.9%

In Europe, net sales at constant exchange rates increased by 11.0% to €6.9bn. As elsewhere, comparable sales were ‘favourably impacted by 15.9% due primarily to COVID-19’. While growth was reported across the region, Ahold Delhaize highlighted that stores in its Central and Southeastern European division grew ‘slightly faster’.

European net consumer online sales break the €1 bn barrier

In Europe, its net consumer online sales broke the billion euro barrier, surging by 36.3% at constant exchange rates to €1.0 bn, while in the USA, net consumer online sales increased by 42.3% to €324.0m.

USA highlights: COVID-19 response, online, click and collect, Stop & Shop & buying scale at Giant Food

In the USA, highlights included:

  • COVID-19 response: work to ‘provide a safe customer and associate environment’
  • Online: growth target revised from 30% to 50% in 2020
  • Upweighting click and collect: Increasing the number of click and collect points by 2.1% to 707 in Q1. Now targeting 1,000+ click & collect points by the end of 2020
  • Stop & Shop: New Stop & Shop stores performing ‘in line with expectations, pre COVID-19’, although store refurbishment timeline may be impacted. IGD Retail Analysis subscribers can access our exclusive store visit presentation 'Five ways Ahold Delhaize is investing to drive growth at Stop & Shop'
  • Purchasing efficiencies: ‘4-year collective bargaining agreements for Giant Food were ratified on March 5th’
     

Europe highlights: COVID-19 response, market share increase, Bol.com, online in the Netherlands & Albert Heijn new store concepts

Meanwhile in Europe, highlights included:

  • COVID-19 response: ‘Safety measures for customers and associates, such as DCs doing temperature checks at the entrance, staggered cafeteria hours, safety vests'
  •  Market share increase: in the Netherlands and Belgium
  • Bol.com: close to 40% growth in Q1
    Online capacity in the Netherlands: Albert Heijn accelerated the ‘opening dates of two new home delivery fulfilment centres’ and started to offer deliveries on Sundays
  • European new stores: 37 across the region
  • Albert Heijn new store concepts: ‘converted 30 more stores to its fresh and digital focused concept, on track to reach 120 in 2020’. Watch IGD's video of Albert Heijn's checkout free-store concept at Amsterdam's Schipol Airport
     

CEO: Q1 impacted by ‘unprecedented demand’ of COVID-19…

Commenting on performance, CEO Frans Muller said,‘Clearly, our Q1 sales performance across all geographies was impacted by the unprecedented demand and pressures created by the COVID-19 outbreak. We have responded by implementing additional safety and protective measures, enhancing associate pay and benefits, and making charitable donations to support local communities. The costs related to our efforts will more significantly impact subsequent quarters. Nevertheless, we maintain our full-year outlook that our group underlying operating margin will be broadly in line with 2019’.

…Continuing to learn from changing behaviour, prioritising digital, online and store investment

On what lies ahead, Muller added, ‘We will keep monitoring and learning from changes in consumer shopping patterns and behaviour. While it is still too early to know which paradigm shifts will emerge from the COVID-19 crisis, we continue to prioritize investments in accelerating our digital and omnichannel capabilities, as well as improving our store fleet, in order to grow our share of wallet'.