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    Ahold Logs ‘Strong’ Q4 Sales Performance

    Price investments, lower gas sales affect U.S. results

    Ahold posted sales of $9.1 billion for the fourth quarter of 2014, a 7.9 percent increase from the year-ago period, driven by currency and improved sales trends, the company said.

    "In the fourth quarter, we reported a strong sales performance, reflecting a positive currency impact as well as improvements in underlying sales trends, both in the United States and in the Netherlands," said Dick Boer, CEO of the Amsterdam-based retail conglomerate, adding, "The actions we took this year across our businesses to improve our customer proposition and to provide better value to our customers resulted in an improving sales performance over the course of the year.

    "Operating income of 1,250 million euros (US $1.4 billion) was slightly higher than last year. Underlying operating margin of 3.9 percent was impacted by investments in our customer proposition in the United States, strong sales growth from our online business in the Netherlands and our acquisition of the SPAR stores in the Czech Republic," Boer continued. "We completed our 2012-14 Simplicity program and achieved 865 million euros (US $968 million) in cost and efficiency improvements, exceeding our target of 600 million euros (US $672 million)."

    For Ahold USA, Q4 net sales of $5.4 billion dipped 0.5 percent from last year, affected by lower gas sales. Excluding gas sales, net sales growth was 0.5 percent higher than the year-ago period, which Ahold attributed to improved positive identical-sales growth of 0.3 percent excluding gas.

    The company noted that during the quarter, its program to improve its customer proposition rolled out to another 22 stores, bringing the total to 523 stores. Ahold said it enhanced its "Fresh" offering with a better assortment at more competitive prices, and provided better value in dry groceries. Additionally, during the winter holidays, Ahold USA achieved identical-sales growth in all four of its divisions: Giant Landover, Giant Carlisle, Stop & Shop New England and Stop & Shop Metro New York.

    For the full year, Ahold USA's own-brand assortment penetration grew 50 basis points to 37.6 percent. Despite the fact that the Giant Landover and New England markets remain "very competitive," according to the grocer, Ahold USA's market share in dollars was down slightly versus last year, reflecting price investments. Volume trends strengthened over the course of the year, with market share in volume in Q4 slightly higher than last year.

    Ahold's online business Peapod continued to grow its sales, although Q4 growth and operating profit were affected by the e-commerce business' distribution facility not yet being fully operational, the company said.

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