Quick Stats

Quick Stats

    You are here

    Woes Persist for Ahold's U.S. Business

    AMSTERDAM -- Dogged by rumors that the results of its strategic review will include an announcement that it's found a buyer for its troubled U.S. Foodservice division, Ahold yesterday reported sliding third-quarter identical- and comparable-store sales for most of its American supermarket operations.

    AMSTERDAM -- Dogged by rumors that the results of its strategic review will include an announcement that it's found a buyer for its troubled U.S. Foodservice division, Ahold yesterday reported sliding third-quarter identical- and comparable-store sales for most of its American supermarket operations.

    "We stated when we announced our Q2 results that the outlook for the second half of the year would be more challenging," said the retail conglomerate, which posted net sales of 10.3 billion euros for the quarter, in a statement. "The third quarter has been even more challenging in the United States, reflecting increased competitor activity and weaker economic conditions, leading to margin pressure."

    Compared with the year-ago period, Ahold's net sales increased 0.7 percent and 3.7 percent at constant exchange rates.

    In the Stop & Shop/Giant-Landover Arena, however, although net sales grew 2.1 percent, to $3.7 billion, identical sales declined 1.3 percent at Stop & Shop (1.8 percent excluding gasoline net sales) and 0.5 percent at Giant-Landover, while comparable sales dipped 0.8 percent at Stop & Shop and 0.2 percent at Giant-Landover.

    The Giant-Carlisle/Tops Arena reported net sales of $1.4 million, a 0.3 percent increase, but identical and comparable sales were mixed. While identical sales grew 4.8 percent at Giant-Carlisle (3.0 percent excluding gasoline net sales), they plunged 6.2 percent at Tops (7.3 percent excluding gasoline net sales). Similarly comparable sales surged 7.2 percent at Giant-Carlisle, but fell 5.7 percent at Tops.

    At U.S. Foodservice, locus of Ahold's massive 2003 earnings-overstatement scandal, net sales increased 5.0 percent, to $4.5 billion. However, quarterly sales comparisons declined about 0.7 percent, due to U.S. Foodservice's exit from the Sofco business in the third quarter of 2005. Cost inflation was in the 1 percent to 2 percent range for the third quarter.

    Net sales at U.S. Foodservice's Broadline division grew 4.3 percent, to $3.9 billion, although the Sofco exit in the year-ago period adversely affected Broadline sales by about 0.8 percent. Meanwhile net sales at the North Star Foodservice arm jumped 9.6 percent, to $684 million.

    Among Ahold's European businesses, Albert Heijn performed best, with an identical sales rise of 9.2 percent, while the company's Central Europe Arena reported a plunge in identical sales of 6.1 percent. Citing no sources, Dutch financial publication has reported that Ahold would sell off its underperforming Polish and Slovakian divisions, as well as U.S. Foodservice, to facilitate a merger with Belgian retailer Delhaize.

    Additionally Ahold's shareholders, led by two hedge funds, have been pressuring the company to sell off all of its American businesses and concentrate on its core European markets to regain financial health.

    Related Content

    Related Content