Fueled by gains at its Giant/Martin’s and Food Lion banners, Ahold Delhaize USA posted improved comparable store sales in its fourth quarter ended December 31, 2017. Same store revenue rose 0.6 percent (excluding gas), a jump from the negative 0.5 percent comps achieved during last year’s corresponding period.
The Zaandam, Netherlands-based retailer said that its Giant/Martin’s brand (banner) was bolstered by the addition of beer and wine offerings which have driven increased traffic and that its Delhaize America banners – Hannaford and Food Lion – experienced comparable sales growth of 1.5 percent, with the latter banner being aided by the roll-out of its “Easy, Fresh and Affordable” enhancement and capital improvement program in Richmond, VA and Greensboro, NC in 2017.
However, total sales at its Ahold USA banners decreased 0.7 percent to $6.8 billion at constant exchange rates. During the fourth quarter, Ahold USA closed 26 stores and opened two new units. AUSA operated 776 stores at the end of the year. Financial performance also includes results from Giant Food (Landover), Stop & Shop and its online grocery delivery division, Peapod.
The overall sales picture was better at Delhaize America where total revenue rose 1.2 percent to $4.5 billion at constant exchange rates. During the 13-week period, Delhaize America closed eight stores and opened two new units. It currently operates 1,214 supermarkets.
Effective January 1, the company’s two U.S. units combined forces to become Ahold Delhaize USA with recent AUSA COO Kevin Holt taking the helm of that unified organization. Holt joined Delhaize America in 2014, before moving to Ahold USA in late 2016. January 1 also marked the launch of the retailer’s new decentralized merchandising plan with all six brands (including Peapod) operating independently and with a centralized administrative hub – Retail Business Services – providing infrastructure support.
After the financials were released on January 24, Ahold Delhaize CEO Dick Boer appeared on CNBC and noted that much of the international retailer’s focus and investment has been on improving its “fresh” departments which now account for more than 50 percent of the company’s supermarket revenue.
“What we do on the fresh side is create entertainment, create excitement and create innovation around fresh,” Boer explained. “We see opportunities also for the service levels in the stores, and the excitement for the customers.”
When questioned about the recent U.S. tax cuts, Boer implied that consumers could be the beneficiaries of those savings.
“Ahold Delhaize is a company that already has a strong balance sheet, so from a cash perspective, if we want to invest, we can invest. We don’t need the tax cut for that, but for any investment we want to do for customers, clearly, this will help,” the veteran Dutch retail executive stated.