ZAANDAM, Netherlands -- Royal Ahold here said the acquisition of Red Food Stores, Chattanooga, Tenn. -- combined with changes in marketing and store formats at other subsidiaries -- contributed to higher sales for its U.S. operations for the fourth quarter and year ended Jan. 1.
Sales in the United States rose 12.1% to $7.4 billion for the year and 16.1% to $1.8 billion for the 12-week quarter. Excluding the Red Food Stores acquisition in May, sales were up 6% for the year and 7.5% for the quarter.
The company said marketing and format changes at Finast, Maple Heights, Ohio, and Edwards Super Food Stores, Windsor Locks, Conn., led to an increase in sales.
On an overall basis, Royal Ahold said net earnings rose 19.4% to $225 million for the year and 16.7% to $65.6 million for the quarter. Overall sales increased 7% for the year to $15.9 billion and 5.2% to $4 billion for the quarter.
Excluding the Red Food Stores acquisition, sales were up 4.3% for the year and 6% for the quarter. A lower exchange rate for the dollar reduced sales by 1.3% for the year and 4.1% for the quarter.
Edwards has closed its 1.85-million-square-foot distribution center and switched to C&S Wholesale Grocers, Brattleboro, Vt., "to achieve cost savings," a company spokesman told SN. The company said it took a nonrecurring charge of $10 million in 1994 associated with that switch.
Debra Levin, a securities analyst with Morgan Stanley, New York, said same-store sales at Edwards rose 6.8% in the fourth quarter following a switch to everyday low pricing in mid-1993. She said same-store sales increased 5.6% at Finast during the quarter following a greater focus on efforts to be more price competitive, especially in nonfood -- a situation made possible in part because of the company's new nonfood facility in Buffalo.
Same-store sales at Giant Food Stores jumped 9.3% "as management has maintained a strong low-price position," Levin said. Same-store sales at Tops rose only 0.6% for the quarter, she said, "as the company experienced a loss of traffic from Canada, which accounts for 5% of Tops' sales, because of the exchange rate." Levin also said same-store sales at Bi-Lo fell 0.4% for the quarter because of competitive pressures from Publix and Winn-Dixie.
Sales were up for the year in virtually all Royal Ahold operations, including Albert Heijn, Schuitema and Ahold Specialty Stores in the Netherlands; Pingo Doce and the Feira Nova hypermarkets in Portugal, and Mana stores in the Czech Republic.