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Retail

DEEN Acquisition Boosts Ahold Delhaize Sales In Europe In Q1

The acquisition of 38 DEEN stores last year helped Ahold Delhaize's European operation report a marginal increase in sales in the first quarter of the year, a period that was otherwise impacted by tough comparatives.

Net sales were up 0.6% in the group's European arm, or 0.3% on a constant currency basis, while comparable sales growth was down 3.1% (compared to a 8.2% increase in the corresponding period last year).

Along with a marginal hit from weather and calendar shifts, the group said that the reopening of societies – and the 'resulting shift of some consumer spending back to travel and restaurants' – contributed to its dip in comparable sales.

Net sales in Ahold Delhaize's European business totalled €7.575 billion in the first quarter, compared to €7.526 billion in the same period last year.

Albert Heijn A 'Standout'

It noted that its Albert Heijn banner was a 'particular standout' in the quarter, achieving market share gains thanks to 'strong execution, successful marketing campaigns, sales uplifts resulting from the brand’s store remodeling activities', as well as contributions from the acquired DEEN stores.

Elsewhere, its Bol.com business reported a 3.8% decline in net consumer online sales in the period, compared to a 78.6% increase in the same period last year.

Sales at Bol.com, which recently announced a major acquisition, stood at €1.3 billion in the quarter, compared to €1.4 billion last year. CEO Muller recently outlined the group's intention to invest more in digitalisation in the coming years.

Global Performance

On a broader level, Ahold Delhaize achieved net sales growth of 8.3% at group level, to €19.774 billion, with sales at constant exchange rates up 3.6% and comparable sales growth (excluding gas) of 0.7%.

In the US, net sals were up 5.8%, while online sales rose 4.6%, it added.

"I am pleased to report a strong start to the year for Ahold Delhaize. In times like these, our strong global portfolio of local brands provides distinct competitive and societal advantages," commented Ahold Delhaize chief executive Frans Muller. "This allows us to successfully navigate short-term market volatility and, at the same time, provide financial stability and operational bandwidth to focus on our long term growth agenda.

"Through our 19 great local brands, on the whole, we lapped prior year pandemic lockdowns with further market shares gains and healthy growth rates in our online grocery business while, at the same time, preserving our industry-leading profitability metrics."

Full-Year Outlook

The group said that it 'remains confident' in its 2022 outlook, despite higher inflation, rising costs and supply chain disruptions.

It expects to report an underlying operating margin of 4% in its full year, as well as free cash flow of around €1.7 billion.

"Overall, Q1 results were better than our expectations, despite macro-economic pressures arising from the war in Ukraine," Muller added.

"The second quarter is seeing many of the trends from Q1 continuing. Therefore, taking all moving parts together, we expect underlying EPS to be comparable to 2021 with the rest of our full-year guidance metrics unchanged."

© 2022 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

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