Ahold Delhaize’s Q2 Dented by Stop & Shop Strike
Despite the adverse impact of the recent strike at New England Stop & Shop stores, parent company Ahold Delhaize managed to post second-quarter net sales of 16.3 billion euros (US $18.3 billion), up 1.5 percent at constant exchange rates, while net consumer online sales surged 29.2 percent at constant exchange rates.
The Zaandam, Netherlands-based retail conglomerate also revealed in its interim Q2 2019 interim report an underlying margin of 3.6 percent, including the strike’s impact, and adjusted its U.S. comparable-store sales growth excluding gasoline for the favorable timing of Easter and the negative effect of the strike, logging a 2.3 percent increase.
“Although our results were impacted by the strike at Stop & Shop, our other U.S. brands continued their strong performance,” particularly Food Lion, noted Ahold Delhaize President and CEO Frans Muller. “As we continue to see sales performance improve at Stop & Shop, we expect no significant impact from the strike in the second half of the year.”
Added Muller: “Our online business in the U.S. grew 14.4 percent, or 18 percent excluding the adverse impact of the strike, and we remain confident that we can achieve over 20 percent growth in U.S. online sales in 2019.”
He also drew attention to such highlights of the quarter as the company’s ongoing remodels of Stop & Shop stores, the launch of various fresh food initiatives in both the United States and Europe to provide “healthy and convenient meal solutions for our customers,” and its becoming the first retailer to issue a euro-dominated sustainability bond, for 600 million euros (US $674 million).
Further, according to Muller, with Ahold and Dehaize now fully integrated, the merged company achieved net synergies of 512 million euros (US $575 million) on an annual run-rate basis, slightly ahead of its target, and the Save for Our Customers program, now “well underway” is expected to deliver 540 million euros (US $606 million) in 2019.