Margin Pressure to Persist at Ahold's U.S. Banners

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Margin Pressure to Persist at Ahold's U.S. Banners

AMSTERDAM -- Ahold warned Friday that margin pressure continues to afflict its U.S. operations, largely due to the wider rollout of the Value Improvement Program (VIP) that the grocery conglomerate introduced at its Stop & Shop and Giant-Landover division more than a year ago; and seasonally low sales at its Giant-Carlisle chain.

The international grocer, based here, released financial results for the third quarter ending Oct. 7, 2007 that included mixed performances in the U.S. At Stop & Shop/Giant-Landover, sales crept up 0.3 percent to $3.7 billion, the company said. Identical sales rose 1.2 percent at Stop & Shop (1.0 percent excluding gasoline net sales), and drooped 1.8 percent at Giant-Landover. Comparable stores sales increased 1.7 percent at Stop & Shop, and dipped 1.6 percent at Giant-Landover.

Giant-Carlisle's sales rose 13.1 percent to $1 billion, due partly to the Ahold’s acquisition in the fourth quarter of 2006 of Clemens Markets. Identical sales at the chain rose 2.5 percent (2.3 percent excluding gasoline net sales), while comparable sales grew 3.7 percent.

Company wide, Ahold posted consolidated net sales of 6.3 billion euros (US $9.1 billion) for the third quarter. The sales were 1.1 percent better than last year, (up 5.6 percent at constant exchange rates), the international grocer said. In the Netherlands, market conditions remained favorable, Ahold said.