In its interim report for the first quarter of fiscal 2013, Ahold reported an overall sales increase of 4.4 percent at constant exchange rate, with an underlying operating income up 0.4 percent at constant exchange rates.
“We continue to gain market share in our major markets as a result of identical sales growth, the expansion of our store network, and strong growth in our online business,” noted Dick Boer, CEO of the Amsterdam-based retail conglomerate. “In the United States, our sales, measured in U.S. dollars, grew by 3.4 percent, with ongoing high levels of promotional activity. We delivered a strong margin performance, thanks to strict cost control. We continue to actively manage our U.S. pension plans, and in this quarter we settled a multiemployer pension plan for €63 million [US $82.3 million] that limits our liability while cost-effectively safeguarding the pensions earned by employees.”
Ahold said it was continuing to make progress on its “Reshaping Retail” strategy, “which involves taking advantage of rapid changes in consumer behavior, shopping trends and the retail landscape. We remain focused on improving our competitive position through cost reductions and the overall simplification of our processes.”
In the first quarter of 2013, the company noted that it was still on track to deliver its €600 million [US $783.8 million] cost reduction initiative, which is slated to wrap up in 2014.
Compared with the year-ago period, Ahold USA’s net sales were $8.1 billion for the first quarter of fiscal 2013, due to robust identical growth and last year’s acquisition of 15 former Genuardi stores, according to Ahold. Identical sales growth of 1.8 percent (1.9 percent, excluding gasoline) was attributed to more effective promotions and the solid showing of Stop & Shop’s New England and New York Metro divisions during severe weather. The shift to selling a greater number of generic drugs had an adverse impact on sales growth, although this was offset by the positive effect from the timing of New Year’s Eve sales, the company noted. Ahold USA gained market share in all four divisions, with an underlying operating margin of 4.1 percent, versus last year’s 4.2 percent.
Ahold said it remained cautious in its 2013 outlook but was committed to delivering on Reshaping Retail.