AMSTERDAM — Ahold here said that the “turbulent economic environment” in the U.S. did not have a significant impact on its business in the fourth quarter, and that comparable-store sales were up at two of its three U.S. banners.
The company said comps for the fourth quarter, which ended Dec. 30, were up 3.1% at Stop & Shop, but slid 0.3% at sister chain Giant-Landover. At Giant-Carlisle, comps were up 5.7% for the period. For the full year, comps rose 1.7% at Stop & Shop, decreased 0.9% at Giant-Landover and rose 5.1% at Giant-Carlisle.
Identical-store sales at the chains were slightly softer for both the quarter and year.
“Overall, fourth-quarter trading was better than expected, with a modest acceleration in identical-store sales growth at Stop & Shop, despite speeding up the implementation of [the value improvement program],” Patrick Roquas, an analyst with Rabobank, Amsterdam, told SN last week.
Ahold said the value improvement program, in which it is reducing SKUs and switching to an EDLP strategy on many items, category by category, continued to pressure its margins in the quarter. The company also cited lower pharmacy sales in reporting fourth-quarter identical-store sales declines of 0.5% at Giant-Landover.
Ahold is scheduled to release a complete earnings report for the fourth quarter and year on March 6. The company said it expected overall retail operating margins would be “at the higher end” of its previously issued guidance of 4% to 4.5% for the full year.
Total sales at Stop & Shop/Giant-Landover increased 2% for the fourth quarter, to $3.9 billion, and 1.5% for the year, to $16.7 billion. Sales at Giant-Carlisle were up 8.6% for the fourth quarter, to $1 billion, and 13% for the year, to $4.3 billion, due in part to the acquisition of Clemens Markets in the fourth quarter of 2006.
Total sales at Ahold rose just 0.2% for the fourth quarter, but were up 6.5% at constant exchange rates, reflecting the decline of the U.S. dollar against the euro. For the year, sales rose 1.2%, to about $41.38 billion, but at constant exchange rates sales were up 6.1%.
During the year, the company completed its divestment of Tops Markets in upstate New York, its U.S. Foodservice distribution business and its Polish retail operations.
Ahold's flagship chain in the Netherlands, Albert Heijn, buoyed by “favorable” market conditions in Europe, saw identical-store sales rise 9.3% in the fourth quarter, and 7.9% for the full year.
The quarterly gain will be “an unbeatable benchmark,” said Roquas.
Total sales at Albert Heijn were up 12.1% for the year, to about $11.8 billion, in part due to the acquisition of the Konmar stores in late 2006, the company said.
Total European sales rose 9.5% for the year, to almost $19 billion, the company said.