Online Sales Jump 42.7% at Ahold Delhaize

Strong sales at Food Lion and Hannaford, as well as a 42.7% jump in online sales, helped accelerate growth at Ahold Delhaize in the fourth quarter.

The Netherlands-based grocery chain said that same-store sales grew 2.3% in its U.S. division.

Operating income overall at the retail conglomerate rose to $834 million for the period ended Dec. 31. Sales rose 5.5% to $18.9 billion, helped by a strong dollar.

“Total results ended with a strong fourth quarter and good closure of the year. We are, across the numbers, indeed better than consensus, so we are pretty happy with the results,” CEO Frans Muller told Reuters in a phone call. “On coronavirus, we don’t see that much impact. We don’t have Asian business ourselves, apart from a smaller business in Indonesia.”

The company said that it expects to reach $7.7 billion in group online sales by 2021.

"Our online sales growth in the U.S. accelerated to 42.7% at constant exchange rates in the fourth quarter, and we met our 2019 guidance outlook of over 20% growth, building upon our position as the leading omnichannel operator on the East Coast," Muller said. "Performance at Food Lion and Hannaford was particularly strong. While Stop & Shop's comparable sales, excluding gasoline, improved over the last quarter, they remained slightly negative due to a challenging sales environment. That said, our ‘Re-imagine Stop & Shop’ program continues to build momentum with sales in Long Island [New York], and now Hartford, performing in line with our expectations. In 2020, we expect to remodel another 65 Stop & Shop stores across the brand’s footprint."

The retailer added that underlying operating margin in 2020 is expected to be broadly in line with 2019. "We expect mid-single-digit growth in underlying EPS in 2020," Muller said.

Late Tuesday, just a few hours before releasing its Q4 fiscal results, Ahold Delhaize USA announced it will close the Midwest division of its Peapod online grocery sales business, which, according to the Quincy, Mass.-based grocer, accounts for $97 million in revenue of the $1.1 billion in total online revenue in the United States. The company said that the move will enable it to focus on growing the leadership position of its brands on the East Coast and to execute its strategy of enabling each of its local brands to be the top omnichannel grocery retailers in their respective markets, using the capabilities of Peapod Digital Labs.

Ahold Delhaize USA, a division of Zaandam, Netherlands-based Ahold Delhaize, is the parent company for Ahold Delhaize’s U.S. companies, consisting of Food Lion, Giant Food, Giant/Martin’s, Hannaford, and Stop & Shop, as well as e-grocer Peapod; Retail Business Services, a U.S. support services company providing services to the brands; and Peapod Digital Labs, its ecommerce engine. Operating more than 2,000 stores across 23 states, Ahold Delhaize USA is No. 4 on Progressive Grocer’s 2019 Super 50 list of the top grocers in the United States.