Unlike many retailers, Ahold Delhaize is raising its guidance for this year. The Dutch supermarket group posted strong first-half results, although savings will be made at Bol.com and Belgian Delhaize.
Less money for Bol.com
Ahold Delhaize is pleased with the first half of this year: sales went up 12 %, mainly thanks to the US and the second quarter. In the US, net sales at constant exchange rates rose by 7.7 %, in Europe that was only 4.2 %. The group also gained market share in “most markets”.
Online sales rose 4.8 % in the second quarter, driven by an 11.5 % growth in the grocery category. After the Covid boom, non-food e-commerce decreased almost everywhere, including at subsidiary Bol.com (- 2.1 %). So much so that Ahold Delhaize has decided not to list the online shop on the stock exchange this autumn, as the company confirmed today. The group is holding out for better macroeconomic conditions.
Strikingly, Ahold Delhaize will also invest less in Bol.com. This should result in savings of 250 to 300 million euros over three years, which the group can invest elsewhere. Perhaps in the (partial) acquisition of the American supermarket group Albertsons? The “consistent and robust performance” in the US will only fuel the rumours.
Opportunities at Delhaize
In the Benelux, comparable sales rose by 1.8 % in the second quarter, compared to a decrease in the first quarter. Albert Heijn and Bol.com both gained market share, but the same cannot be said for Delhaize. CEO Frans Muller did point out that the Belgian supermarket chain’s “Little Lions” initiative is a success: after the first month of the programme, Delhaize has already seen a 15 % increase in sales of those discounted products. It is an example of the overall strategy to focus more on private labels and everyday low-priced products in times of inflation.
Cost reduction and “reprioritisation and consolidation of investments” are particularly important in the current difficult economic climate. “In Belgium, we have also identified operational and structural opportunities in the short to medium term, and we expect margin levels to stabilise and improve later this year,” said Muller. In other words, reorganisations might be ahead.
The group’s overall profit was better than expected in the last quarter, rising 11 % to 59 cents per share. For the full year, Ahold Delhaize now expects underlying earnings per share to grow by more than 5 %, while the operating margin is estimated at around 4 %.
