Ahold Delhaize enjoys continued momentum in Q3

Date : 17 November 2016

Ahold Delhaize has announced third quarter results saying pro forma net sales rose by 2.6%, 2.9% at constant exchange rates and by 3.3% excluding gas, to €14.5 bn. The retailer highlighted its on-going strong growth online, but noted how on-going deflation in the US had held back its overall performance in that market.

Deflation overshadows growth in US

Ahold Delhaize reported its US-based operations separately. At Ahold US net sales rose 3.4%, excluding gas at constant rates, with comparable sales growth of 0.3%, while at Delhaize America net sales grew by 1.1% at constant rates, while comparable sales rose 1.3%. At Delhaize America the company said that the Food Lion banner had been affected by a ‘more intense competitive environment’.

Deflation remained in focus at both chains. Spotlighting deflation, Ahold Delhaize echoed statements from Walmart, who also announced Q3 results, with Ahold USA seeing comparable sales affected by deflation of -0.8%, the same pace as in Q2, while at Delhaize America, comparable sales were affected by deflation of -1.6%, compared to -1.0% in Q2. The company said that it expected the trend and pace of deflation to continue in Q4, but it was not expected to get worse. However, the retailer did say that it rolled out its next wave of additional price drops on more than 1,800 SKUs in October, which will likely affect its performance in Q4.

Online continues to drive growth in the Netherlands…

Pro forma net sales rose 4.3% in the Netherlands, driven by comparable sales growth of 3.3%, which itself was underpinned by ‘continued strong online sales growth’. The retailer’s online strength remains a core differentiator in the Netherlands, where its Bol.com and AH.nl businesses saw net consumer sales growth of ‘over 30%’. At its stores it said sales had been ‘ positively impacted by continued assortment innovations and improvements with a focus on health and strong initiatives to increase our customer connection’.

…While affiliated network offset sales contraction at company owned stores in Belgium

In Belgium, pro forma net sales rose 1.7%, driven by inflation, comparable sales growth of 1.3% and the retailer’s affiliated network, which offset a contraction in volume growth at company-operated stores. Underlying one of the benefits of the combined company, Ahold Delhaize said that sales over Bol.com into Belgium, albeit accounted under the Netherlands for reporting purposes, had shown a ‘good performance’.

Mixed performance seen in Central and Southeastern Europe

In its Central and Southeastern Europe division, Ahold Delhaize said pro forma net sales increased by 8.9% at constant exchange rates, with comparable sales rising by 6.0%, excluding the effects of gas. The retailer said that it had enjoyed further growth in Greece and Romania, but that growth was ‘approximately flat in the Czech Republic and Serbia’.