Ahold Delhaize’s Belgian business posted comparable sales growth of 4.1% in the first quarter of the year, compared to a 0.7% decline in the same period last year, helping to lift the group's overall European performance.
Net sales in the Belgian operation were €1.25 billion, a 5.0% increase last year, which was boosted by positive Easter timing.
In its home market of the Netherlands, the group posted a 3.2% increase in comparable sales, with net sales rising by 2.7%, to stand at €3.4 billion.
‘Best Buy’
The group said that this was boosted by the extension of Albert Heijn’s ‘Best Buy’ product range, as well as the continued growth of BOL.com and AH.nl, its online businesses.
Online sales grew by 23.9% at the retailer’s Dutch operations, compared to last year.
Elsewhere in Europe, the business’s Central and South-Eastern European operations posted comparable sales growth of 0.4%, which was down on the 1.7% growth that it posted for the same quarter last year.
Comparable growth was negative in Greece, the group noted, due to ‘further normalising and strengthening of the competitive environment’, while Romania, Serbia and the Czech Republic were all up.
In the United States, the group’s biggest division, comparable sales were up by 3.0%, compared to a 0.7% decline in the period last year.
Net sales in the US increased by 2.1% at constant exchange rates, to €8.84 billion.
Better Together
"We are pleased with our performance during the first quarter, proving that the execution of our 'Better Together' strategy continues to bear fruit, delivering sales growth and synergies throughout the business," commented Ahold Delhaize CEO Dick Boer, on what will be the final set of results over which he will preside before he steps down on 1 July.
"Benefiting from our scale and building on our leading positions on the US East Coast and in Europe, our great local brands demonstrated their capabilities and agility to meet rapidly changing consumer needs and preferences," Boer added.
He noted that following the succession of Frans Muller to the position of CEO, "I am confident our strong leadership team will continue to drive innovation and growth in stores and online, as we create value for all our stakeholders and live up to our promise to be a better place to shop."
Standout Performances
Commenting on the performance, analyst Barclays European Food Retail Equity Research said, "On sales, the standout performances were the US (comps of 2.8%) and Belgium (4.1%). The Belgian result is very welcome, given its weakness over recent years. We note that the US growth rate benefitted from high inflation (2.3% in 1Q versus 0.9% in 4Q), and also a calendar benefit of 100-120 basis points.
"On margins, most divisions were broadly as expected – we note that the €14 million beat versus consensus (€600 million versus €586 million) was entirely driven by the volatile 'insurance results' within central costs. FCF more than doubled between 1Q17 and 1Q18. This was mostly driven by working capital – a positive surprise to us, given that working capital had also been strong in the previous quarter."
© 2018 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.
