Ahold Delhaize's U.S. operations post $43.4 billion in annual sales

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Ahold Delhaize's U.S. operations post $43.4 billion in annual sales

By Michael Johnsen - 02/28/2018
Ahold Delhaize closed its first full year operating as a whole unit on a strong note, with Ahold USA recording fourth quarter net sales of $6.6 billion on 1.1% growth and Delhaize America posting $4.3 billion in net sales on 1.4% growth. For the year, Ahold USA generated $26 billion in net sales and Delhaize America $17.4 billion.

"Both Ahold USA and Delhaize America reported strong underlying operating margins, driven by synergies," Dick Boer, CEO Ahold Delhaize, said. "Inflation remained at low levels and volumes at Food Lion continued to benefit from the implementation of its 'Easy, Fresh and Affordable' program that has now been rolled out to more than half of its store base. Hannaford reported its 15th consecutive quarter with positive comparable sales growth."

During the quarter, Giant Carlisle opened eight new in-store Beer & Wine Eatery locations featuring an expanded assortment of wines, beers and fast-casual food that helps increase the grocer's transaction count. At year end, Giant Carlisle operated 54 of these eateries.

Peapod, Ahold USA's online grocer, raised its customer satisfaction index by improving key drivers such as on-time delivery, available delivery slots, in-stock items, value perception and the user-friendliness of its website.

On the Delhaize America side of the business, Hannaford further expanded its click-and-collect service as a convenience solution to the markets it serves. "We have been building continuously on the Hannaford To Go concept, where I think we're close to 50 stores now where we offer click-and-collect," Boer told shareholders Wednesday.

Delhazie America also has been investing significantly in its customer loyalty programs. Food Lion successfully completed the pilot of its "Shop & Earn" digital loyalty program, which offers customers the opportunity to receive personalized savings on the products and categories they shop the most. And at Hannaford, the "My Hannaford Rewards" loyalty program became available to more stores during the quarter with the banner-wide launch in January 2018. The program is a reinvention of grocery store loyalty programs providing further incentives to customers buying own-brand items, in addition to already-low prices.

Those loyalty programs become more critical moving forward in a price-competitive market. "The U.S. is a competitive market at the moment," Jeffrey Carr, Ahold Delhaize CFO, told shareholders. "The stronger players are investing in price. And certainly, Walmart has been investing in price. ... We've been maintaining our price gap to Walmart [and] we'll continue to seek to maintain those price gaps to the discounters, including Walmart, and relative to our supermarket peers."