Ahold Delhaize mainly grows online

Ahold Delhaize mainly grows online

Belgian-Dutch merger group Ahold Delhaize has had a decent first quarter, thanks to a Belgian turnaround, a good performance in the United States and strong online growth. Unfavourable exchange rates did spoil the party somewhat.

 

Course of the dollar

With a 14.9 billion euro group turnover, Ahold Delhaize’s first quarter was slightly above expectations. The 5.9 % turnover drop is entirely because of the weak dollar, because the company would have achieved a 2.5 % turnover increase if exchange rates had remained stable. Operational margins grew from 3.8 to 4 % thanks to synergies.

 

Albert Heijn and bol.com generated a 3.4 billion euro turnover in the Netherlands, up 2.7 % (+ 3.2 % on a like-for-like basis). They mostly thrived online: turnover grew from 350 to 434 million euro, up 28.3 %. Bol.com’s marketplace, Plaza, even surged ahead 47 % and already unites more than 20,000 sellers. Consumer electronics generate the most turnover and grew more than 30 %. Its Dutch operational margin was 4.9 %, a minor drop because of online growth investments. Excluding bol.com, its margin would be 5.6 %.

 

The group will also publish separate online totals from now on: it grew 23 %. “The group is on course to achieve a 5 billion euro online turnover in 2020”, CEO Dick Boer said.

 

Turnaround in Belgium

Food Lion posted a 23rd straight quarter of like-for-like volume growth in the United States, but its Belgian turnaround is especially good news for the group. Delhaize generated a 1.25 billion euro, up 5 % compared to last year. The like-for-like turnover growth was 4.1 %. Both the number of transactions and the average spend evolved positively, in every store formula. The chain's operational margin did drop from 2.4 to 2.3 % however, partially because of increased marketing efforts. Turnover on its web shop, delhaize.be, did grow 26.6 % from 10 to 12 million euro.

 

Ahold Delhaize says its good performances are thanks to new elements in its commercial plan and also a result of the Delhaize brand’s repositioning. Delhaize also improved its product range’s availability. Because consumers want healthier options, the retailer has banked on healthy food commercials for the entirety of 2018. CEO Dick Boer says the new board will execute commercial and operational improvements and says the results are “encouraging”.