Europe saves Ahold Delhaize as US margin drops

Ahold Delhaize saw its net sales grow 0.6 % to 23.3 billion euros, as its European powerhouses Albert Heijn, Bol and Delhaize shone. Meanwhile, investments in the United States put margins under pressure.

‘Healthy margin’ in Europe

The results suffered further from the sale of FreshDirect, shop closures at Stop & Shop and the ban to sell tobacco in Dutch supermarkets: without those, sales growth would have been 2.1 %, the retailer said. Online sales grew by 5.8 %. The underlying operating margin did fall 0.2 percentage points to 4.1 %, partly due to price investments in the US.

Its European branch performed well: Dutch Albert Heijn increased its market share again (despite already being the market leader), while Belgian Delhaize ended the year strongly with a higher market share than before the announcement of its ‘Future Plan’. Dutch online marketplace Bol achieved its best-ever quarterly sales after an 11 % growth and in Central and Southeastern Europe, the group’s chains are working increasingly closely together. Thanks to strong performance in Belgium and a focus on cost control, Europe delivered a “healthy” operating margin of 4.4 % in the fourth quarter.

For the full financial year, Ahold Delhaize achieved sales of 89.4 billion euros, an underlying operating profit of 3.6 billion and a margin of 4 %. This year, the retailer expects to achieve a margin of around 4 % again. The year has started well, CEO Frans Muller said: the acquisition of Profi in Romania will generate three billion euros in additional sales, while the closure of underperforming Stop & Shop shops in the US has been completed. The cessation of tobacco sales at Delhaize and Albert Heijn in Belgium from 1 April will have an impact of about 1 percentage point on comparable sales in Europe.