Company increased online sales by more than 20%
For the full year, Ahold Delhaize said its net income more than doubled as net sales increased 27%, the company said on Wednesday.
Net sales declined 3.6% in 2017’s final quarter. On a constant exchange basis, however, the company said its net sales increased 1.6% from a year earlier.
Ahold Delhaize was created in 2016 from the merger of Ahold and Delhaize Group.
“2017 was the first full year as Ahold Delhaize, one in which we substantially completed the integration,” said Dick Boer, chief executive officer of Ahold Delhaize. “We delivered synergies ahead of schedule and continued to show underlying operating margin expansion with stable or increasing market share in our major markets.”
Ahold Delhaize’s business in the United States, where it derives two-thirds of its sales, was very strong in the fourth quarter, Boer said. Margins were up 4.2% at Ahold USA (which supports four regional divisions in the Northeast — Stop & Shop New England, Stop & Shop New York Metro, Giant Landover and Giant Carlisle). Fourth quarter margins were up 4% at Delhaize America (comprised of 1,200 Food Lion and Hannaford supermarkets on the East Coast and the Peapod grocery delivery service).
Ahold Delhaize is on track to complete the merger of the U.S. operations by the end of the current quarter.
“In a dynamic environment, our great local brands delivered strong results, tapping into changing consumer behavior,” Boer said. “We grew our online consumer sales by more than 20%.”
Boer said the company intends to enhance its digital capabilities in the United States in 2018 and complete the rollout of its customer loyalty programs. “Most of our competitors in the United States don’t do home delivery — only click-and-collect,” Boer said in an interview with Bloomberg News. “We are well ahead of the market on this.”
Online sales contribute about 2% of the company’s business in the United States, Jeffrey Carr, Ahold Delhaize’s chief financial officer, told analysts on an earnings call. Carr said the company is close to offering the Hannaford To Go click-and-collect program in 50 stores. At Food Lion, the company is experimenting with a click-and-collect program and is working with Instacart on a test program for grocery deliveries.