Dive Brief:
- Ahold Delhaize posted a slight year-over-year decline in net sales in the U.S. during the third quarter of 2024, but same-store sales were up after declining earlier in the year, the supermarket operator reported Wednesday.
- The Dutch grocer brought in sales of 13.5 billion euros ($14.7 billion) at constant exchange rates during Q3, off by a fraction of a percentage point compared with the same period last year. Same-store sales excluding gasoline rose 1.2% during the quarter, reversing a 0.4% decline in Q2.
- Ahold Delhaize completed the planned closures of 32 underperforming Stop & Shop stores during the first weekend of November.
Dive Insight:
Ahold Delhaize has made solid progress in its efforts to revitalize Stop & Shop, but the company still faces a long path as it looks to get the Northeastern grocery chain back on firm footing, President and CEO Frans Muller said Wednesday during an earnings call.
The store closures sliced $38 million from Ahold Delhaize’s sales during the third quarter, and the company took a $136 million pretax charge related to the moves, CFO Jolanda Poots-Bijl told investors during the call.
Ahold Delhaize expects the Stop & Shop closures to have an impact of between $100 million and $125 million on its net sales for the year, according to the company’s third-quarter earnings release.
“We have much more work to do to bring Stop & Shop back to its feet where we wanted to have [it] and where it used to be,” Muller said.
Ahold Delhaize announced plans to close the stores in July, saying at the time that it expected to finish the process by the end of 2024.
Stop & Shop, which named a new president in September, has cut prices at selected stores and seen volumes “beginning to trend better at locations where interventions have been made,” Muller said. The banner has also upgraded more than 119 stores, he said.
Ahold Delhaize said its same-store sales in the U.S. benefited from factors like pharmacy sales growth but were pressured by the Stop & Shop closures and the recall of Boar’s Head meat products this summer.
In addition to taking steps to improve Stop & Shop’s performance, Ahold Delhaize is continuing to deal with the impact of its decision late last year to sell the FreshDirect online grocery service.
The divestiture sapped about 1 percentage point from the company’s U.S. net sales during Q3, but its digital sales still moved ahead by more than 15%, in part because of strong e-commerce performances by Food Lion, Hannaford and The Giant Company, Poots-Bijl said.
Ahold Delhaize has added more than 70 pickup locations during the past year, Muller noted, adding that orders placed through DoorDash were up 40% in Q3 compared with the prior quarter.
Food Lion, which has logged 48 straight quarters of positive sales growth, remains Ahold Delhaize’s best-performing U.S. banner, according to the company.
