Pilot Pen G2 Edge

Ahold Delhaize USA’s online sales soar nearly 69% in 2021

Print Friendly, PDF & Email

ZAANDAM, Netherlands — Ahold Delhaize USA provided most of the growth momentum for its parent company, Ahold Delhaize Group, in 2021, as robust e-commerce sales drove solid top-line results while operating profit soared by triple digits.

Net sales for the U.S. business, which provided 60% of its parent’s top line and more than two-thirds of its operating income, gained 3.6% to $53.7 billion, driven by a 68.9% jump in online sales to $3.81 billion while comparable sales excluding fuel rose 1.9%. Operating income, meanwhile, skyrocketed 147.3% to $2.63 billion.

Excluding $88 billion in special items, including impairment losses and reversals, gains on leases and asset sales and restructuring and related items, underlying operating income inched downward 0.9% to $2.54 billion.

During the fourth quarter, which included one week less than that of 2020, sales gained 1.5% at constant exchange rates to $13.83 billion, fueled by a 30.5% surge in e-commerce sales to $985 million and a 4.8% increase in comparable sales. Excluding the contribution from a 53rd week in 2020, fourth quarter sales rose 9.2% at constant rates. Backing out the impact of the Fresh Direct acquisition, though, fourth quarter online sales grew a more modest 7.5%.

According to management, bad weather shaved about 20 basis points from comparable sales, which nevertheless rose 16% on a two-year stack. Among the various banners, management singled out the performance of Food Lion, which turned in its 37th consecutive quarter of positive comparable sales.

Other notable achievements for Ahold Delhaize USA during 2021 included 19 store remodels at Stop & Shop, bringing the total number of revamped sites to 55. The remodeled locations continue to exceed expectations, executives say. In addition, Carlisle, Pa.-based The GIANT Co. unveiled a new e-commerce fulfillment center in the Philadelphia market in December.

“We are proud of The Giant Co.’s new e-commerce fulfillment center that opened in the Philadelphia market in quarter four,” said Frans Muller, president and chief executive officer of Ahold Delhaize. “It is supporting our growth and productivity ambitions for 2022 and beyond. We continue to invest across our entire distribution network and build new digital capabilities.”

The U.S. business continued to build out its omnichannel capabilities, adding 59 click & collect points during the fourth quarter and 270 for the year, ending 2021 with 1,386 sites across all of its markets. Muller noted that Giant Food, headquartered in ­Landover, Md., launched its online marketplace solution, Ship2me, with an initial offering of about 40,000 additional general merchandise and food items.

“As we enter 2022, we will accelerate our omnichannel investments to capture the incremental growth opportunities we see over the horizon, enabled by our platform,” said Muller. “Improving omnichannel productivity also remains a very high priority as part of the commitment we announced at our November Investor Day to reach fully allocated profitability in Group e-commerce operations by 2025.”

With its European businesses also performing solidly in 2021, Ahold Delhaize reported consolidated net income of €2.25 billion (approximately $2.65 billion), up 60.8% over the bottom line for 2020. With one less week of business, net sales edged up 1.2% to €75.6 billion (about $89.35 billion) as comparable sales expanded 2.3%.

Although consolidated gross margin contracted 17 basis points to 27.36%, operating profit nonetheless soared 51.5% to €3.32 billion as general and administrative expense plunged 29.9% to €2.97 billion, or 3.92% of sales. Pretax income escalated 64.3% to €2.8 billion.

“Our financial results in 2021 significantly exceeded our original expectations, with positive full-year comparable sales growth and stable 52-week comparable underlying earnings compared to record results in 2020,” Muller concluded. “This was despite supply chain challenges, increasing inflationary pressures and the dilutive effect as we continue to rapidly expand our omnichannel proposition. Our investment in our omnichannel platform once again proved its worth during 2021, with Group net consumer online sales growing by more than 38% compared to 2020, representing a two-year stack growth of more than 105%.”

Looking ahead to the current year, management remains confident in its ability to grow sales, as current trends favoring more food-at-home consumption and online food purchases fit well with Ahold Delhaize’s omnichannel business model. Underlying earnings per share, however, are expected to decline by low-to-mid-single digits this year, driven primarily by a return to historical margin levels compared with elevated levels in 2021.


BEIRES_728x90


You must be logged in to post a comment Login