Dive Brief:

• Ahold Delhaize posted rising sales across its U.S. banners during the fourth quarter of 2021, with comparable sales excluding gas up 4.8% compared to last year's Q4 and up 16% versus the same period in 2019, the Dutch retailer reported on Wednesday.
• The grocer's online sales in the U.S. rose 30.5% in Q4 compared with the fourth quarter of 2020, and jumped 68.9% for all of 2021 on a year-over-year basis.
• Ahold Delhaize remains optimistic about its prospects for continued financial improvements but expects growth to slow down significantly in 2022.

Dive Insight:

Even as Ahold Delhaize positions itself for a future where it expects strong digital sales to propel its momentum, the company is contending with a variety of headwinds as it plots its course.

Fast-rising prices and supply chain issues are among the reasons Ahold Delhaize believes its growth will come at a more measured pace this year than it has in the past, Chief Financial Officer Natalie Knight said during the company's earnings call on Wednesday.

"When we look at Q4 and all of [2021] actually, we've had very big success … in terms of maintaining stable margins, really making sure that we get that balance right in terms of what's happening on the inflation side and the cost side," Knight said. "But as we look at [2022] I think we just have to be realistic. It is a pretty challenging environment out there. And there are going to be places where we're able to hold and there may be areas where it's more challenging."

Ahold Delhaize is looking to its local relationships in markets where it operates as a way to combat inflation, which has been on a tear in the food industry and across the economy, Ahold Delhaize President and CEO Frans Muller said during the call. The company is leveraging its own brands to help control prices, he said, adding that the company's private label penetration is about 30% in the U.S.

"We have exact and broad knowledge which gives us a significant advantage over competition," Muller said.

In a reflection of the faith Ahold Delhaize is putting in digital sales, the company made continued progress building out its e-commerce systems last year. The company added 270 pickup locations to its store fleet in the U.S. during 2021, pushing the total to 1,386, Muller said.

As it looks to profit from its strength in e-commerce, Ahold Delhaize remains on course to hold an initial public offering of stock in its Bol.com e-commerce subsidiary in the Netherlands during the second half of the year, executives said.

Muller stressed that Ahold Delhaize is paying close attention to its ability to manage data as it looks to continue thriving.

"Look at our tech and digital in our total CapEx envelope. Tech and digital is making a bigger part than ever before," Muller said. "We invest in technology, we invest in automation, we invest in more digital shopping journeys for our customer, which all pays out through loyalty and other revenue streams."