Dive Brief:
- Ahold Delhaize recorded lower net sales in the U.S. during the fourth quarter of 2024, but same-store sales and operating income in the region both rose, the grocer reported Wednesday.
- The company’s U.S. sales came in at 13.9 billion euros ($14.4 billion) at constant exchange rates in Q4, representing a decline of 0.6%. Quarterly same-stores sales excluding gasoline were up 1.4%, while operating income surged by over 30%, to 568 million euros.
- The closure last year of several dozen underperforming Stop & Shop locations depressed Ahold Delhaize’s net sales in the U.S. by about 110 basis points, CFO Jolanda Poots-Bijl said Wednesday during an earnings call.
Dive Insight:
While Ahold Delhaize is continuing to deal with the fallout from its decision last year to cull its Stop & Shop fleet and its move in 2023 to unload the FreshDirect e-grocery business it formerly ran, the company is satisfied with its recent performance in the U.S., President and CEO Frans Muller said during the earnings call.
For all of 2024, Ahold Delhaize posted net sales of 54.2 billion euros in the U.S., down year over year by just under 1%. Operating income was up by more than 8% during the year, to 2.2 billion euros.
Stop & Shop recorded “positive effects” in Q4 from its efforts to lower prices and build its private label offerings, and the chain has seen indications in the early weeks of 2025 that its price investments are making a difference, Muller said. On the other hand, the Dutch grocery company expects the Stop & Shop closures to cost the company between $550 million and $575 million in sales this year, he said.
Muller said The Giant Company plans to open two new stores in 2025, noting that 95% of the banner’s more than 190 locations have been remodeled to reflect its latest store design. Ahold Delhaize plans to open 12 new supermarkets across its U.S. banners this year, Muller said.
Ahold Delhaize’s online sales in the U.S. were down year over year by just under 1% during Q4. But in an illustration of the impact from the sale of FreshDirect, Ahold Delhaize’s U.S. digital sales would have been up by 10.9% had the company not sold the e-grocer, Poots-Bijl said.
Food Lion recorded double-digit online sales growth, partially offsetting the negative effects of the FreshDirect divestiture, according to the company. The chain turned in its 49th straight quarter of comparable-store sales growth, continuing its run as Ahold Delhaize’s best-performing banner.
Muller said Ahold Delhaize’s U.S. private label sales outpaced sales of other goods in terms of both dollars and units sold, reflecting the company’s ongoing push to build awareness of its own brands.
Asked during the call if Ahold Delhaize would consider merging with Kroger, Muller declined to answer specifically.
“We always shared with you that we are -- have an open view on expanding our business also inorganically when opportunities arise, which are in line with our strategy,” Muller said. “We have a strong balance sheet, as you know, so we have the firepower in itself. But we [will] come back to you if we have further ideas on M&A in total.”
