Dive Brief:
- Ahold Delhaize turned in a strong financial performance during the fourth quarter of 2022, with U.S. comparable-store sales excluding gasoline rising 9.3% compared with the same period in 2021 and net sales up 9.2% at constant exchange rates, the company reported Wednesday.
- For all of 2022, the Dutch grocery company saw U.S. comparable-store sales excluding gasoline increase 6.8% year-over-year, while net sales rose 7.9%.
- The retailer’s overall U.S. results for 2022 and the fourth quarter were ahead of the comparable figures it posted during the prior year, but online sales growth was down by a large margin.
Dive Insight:
Ahold Delhaize achieved significant growth in the United States during 2022, a year marked by powerful inflation and changes to shopping behavior as the pandemic loosened its grip on people’s activities.
The company’s overall profitability exceeded its forecast for the year, with underlying earnings per share up 16.5%. Ahold Delhaize had predicted that its earnings would decline in 2022 compared with the previous year and attributed its better-than-expected performance to its strong comparable-store sales as well as favorable interest and currency exchange rates.
Ahold Delhaize, which runs stores in the United States under banners including Giant Food, Hannaford, The Giant Company, Stop & Shop and Food Lion, said it concentrated last year on helping shoppers across its store markets cope with fast-rising food prices. The grocer’s Save for Our Customers program spawned 15% more savings in 2022 than the company anticipated, and Ahold Delhaize has made the effort a top priority for 2023.
In its earnings presentation, Ahold Delhaize noted that Q4 was the 41st quarter in a row of positive comparable-store sales growth for Food Lion, underscoring the key role the Southeastern chain plays in driving the multinational retailer’s U.S. results.
The company added that it plans to remodel eight Stop & Shop stores in New York City during the first quarter of 2023. The banner completed four store remodeling projects during the second half of 2022, Ahold Delhaize said.
Ahold Delhaize, which has said it will rely heavily on digital operations to help power its growth during the coming years, recorded sharply slower e-commerce sales growth in 2022 than it saw in 2021, when the pandemic provided a strong tailwind for online grocery sales for food retailers. The company’s U.S. digital sales were up 17.3% during Q4 on a year-over-year basis, down from 30.5% in Q4 of 2021. For all of 2022, Ahold Delhaize saw digital sales rise 14.5%, compared with a nearly 70% increase in 2021.
The company said it added 162 click-and-collection locations in the United States in 2022 and now has 1,547 pickup points in the country. Ahold Delhaize’s online grocery operations reach 97.5% of its U.S. shopper base, according to the grocer.
Ahold Delhaize could be poised to add to its store count as rivals Kroger and Albertsons seek to assuage antitrust concerns related to their planned combination. The would-be merger partners are reportedly proceeding with plans to sell several hundred stores to satisfy regulators, a development that would provide Ahold Delhaize with a potential opportunity to expand its operations in the United States.
Ahold Delhaize will be undergoing leadership shifts during the coming months. The company announced in January that CFO Natalie Knight will be leaving the company later this year. In November 2022, the retailer said Ahold Delhaize USA CEO Kevin Holt will be retiring in April. And last August, Nicholas Bertram departed as president of The Giant Company.
