Dive Brief:
- Ahold Delhaize’s third-quarter net sales rose 2.9% to €16.7 billion ($18.5 billion), which the company credits to strong online sales. U.S. e-commerce sales were up 26.3%, giving Ahold Delhaize confidence to reach its goal of 20% growth in U.S. online sales in 2019.
- U.S. comparable sales growth grew 1.8%, driven by strong results from Food Lion and Hannaford. Stop & Shop continues to be challenged by a competitive environment, but the company said it's encouraged by results so far from its remodel program that kicked off last fall in Hartford, Connecticut. The company’s U.S. sales also received a small boost from Hurricane Dorian, which hit in late August.
- Ahold Delhaize's operating income reached €679 million ($752 million) for the quarter with earnings per share up 5.5% year-over-year. Its Save for Our Customers program is on track to reach $664 million in 2019, higher than its previous target of $600 million.
Dive Insight:
During the third quarter, Ahold Delhaize saw benefits from an e-commerce transformation that includes rebranding and adding services while also weaving Peapod further into its U.S. banner operations. Just last month, Ahold Delhaize’s Giant rebranded its delivery service Giant Delivers, previously Peapod by Giant, and its Food Lion banner launched a pickup service to 50 stores called Food Lion To-Go.
The company is also seeing effects from e-commerce initiatives put in place earlier this year, including Giant Foods’ grocery pickup expansion and Stop & Shop’s same-day delivery pickup.
Stop & Shop, however, has been holding the grocer back. Competition in the Northeast has stifled the retailer’s sales growth, and an 11-day strike in April dinged sales and made the retailer spend more than it would have liked on promotions to win customers back. But as it continues to remodel more stores, honing its approach as it goes along, Stop & Shop has seen promising results, according to Ahold Delhaize's chief executive, Frans Muller. The retailer began remodels at stores in Hartford, Connecticut and now plans to have all 415 stores updated in the next four years.
Ahold Delhaize has been trying to add unique features to its stores and brands. In September, Stop & Shop launched The Breadbot, a glass-encased machine that makes 10 loaves of artisanal bread at once. The company says its fresh kitchen and culinary innovation center, which tests fresh own brand food concepts and processes fresh fruits and vegetables, is also ramping up. The center just opened in September in Rhode Island.
