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Retail

Ahold Remains "Cautious" Despite Growth

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Ahold Remains "Cautious" Despite Growth

Ahold has reported steady growth for the second quarter but CEO Dick Boer said the group is "cautious" due to difficult trading conditions and rising food commodity costs.

The Dutch retailer saw its net income jump 24.6 per cent to €248 million in the second quarter, reaching net sales of €7.7 billion, a surge of 11.9 per cent, or 3.9 per cent at constant exchange rates. Net sales for the first half of the year saw an increase of 8 per cent and net income was up €40 million for the period.

The group gained market share in its major markets, depsite the challenging economic environment. The retailer said, "The market environment remains challenging, competition continues to be intense and customers remain value driven."

In the retailers home territory net sales increased 5.3 per cent to €2.6 billion in the second quarter (including its six stores in Belgium). The group's new online venture Bol.com, was included for eight weeks of the quarter and contributed 2.4 per cent to sales growth in the Netherlands. Underlying operating margin for the region was 5.4 per cent compared to 6.2 per cent for the same period last year. In the first six months of the year net sales increased 3.0 per cent to €5.8 billion in the Netherlands and underlying operating margin was down to 5.7 per cent from 6.1 per cent in the first half of 2011. Boer commented, "Margins in the Netherlands were negatively impacted by increased price investments and an unsuccessful promotional campaign." Although Albert Heijn slightly increased its market share, Boer said its performance was "weak".

Its Czech Republic and Slovakia operations saw a decrease in net sales of 2.8 per cent to €385 million, an increase of 1.4 per cent at constant exchange rates and identical sales saw a growth of 0.7 per cent. For the first half, net sales decreased 4.4 per cent to €893 million, or 1.4 per cent at constant rates. The retailer said, "After two previous quarters during which sales declined, sales growth has been restored through good promotional offers and successful customer loyalty campaigns."

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Overall, Ahold is confident that it is on track to deliver on its strategy and the CEO said the focus will remain on investing in growth. (23 Aug)

© 2012 - ESM: European Supermarket Magazine

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