Ahold Delhaize still trying to move past FreshDirect sale, Stop & Shop closures

Still feeling the effects of the sale of its online grocery delivery service, FreshDirect, store closures, and the Boar’s Head deli meat recall, Ahold Delhaize released a modest third quarter earnings report on Wednesday.

In the U.S. net sales were $14.49 billion, which is a year-over-year decrease of 0.1% at constant exchange rates and a drop of 1% at actual exchange rates.

Comparable sales excluding gasoline rose 1.2% vs. Q3 2023, driven by continued growth in pharmacy sales.

Net sales were negatively impacted by the divestment of FreshDirect, which was sold in late 2023, and lower gasoline sales. On the other hand, comparable sales in the U.S. had a negative impact of 0.5 percentage points due to the closing of 32 Stop & Shop locations and the Boar’s Head deli product recall. Boar’s Head deli products were linked to a deadly Listeria outbreak that killed 10 over the summer.

“In the U.S. we continue to see momentum building, and I expect further improvements in trends through the holiday season,” Frans Muller, president and CEO of Ahold Delhaize, said during the earnings call.

Muller said the Stop & Shop closings and Boar’s Head deli recall had a negative impact on comparable sales in the U.S. of about $70 million in the third quarter.

U.S. online sales dropped 0.1% in constant currency year over year, again negatively impacted by the FreshDirect sale. However, Ahold Delhaize USA banners Food Lion, Hannaford, and The GIANT Company experienced double-digit online growth.

Overall, Ahold Delhaize, which has more than 6,700 stores in the U.S. and Europe, experienced third quarter net sales of over $23.6 billion, a 1% year-over-year gain at constant exchange rates and a 0.2% increase at actual exchange rates.

Comparable sales excluding gasoline had a net positive impact of about 0.3 percentage points and online sales grew by 5.1% at constant exchange rates year over year.

“I am pleased to report a solid performance in the third quarter, placing us well on track to achieve our strategic objectives and underlying financial goals for the year.” Muller said.

The grocer’s Growing Together strategy calls for innovation and a focus on the customer, including using tech and AI to improve customer experiences and tech and data to provide customer savings and improve operational efficiency. Ahold Delhaize also wants to increase its private-label share.

Ahold Delhaize is holding steady on its 2024 outlook where the underlying operating margin is expected to be 4% or higher.

In October, Ahold Delhaize USA announced AD Retail Media was offering enhanced in-store audio solutions to further empower CPG partners as they look to develop personalized omnichannel media plans. Through a partnership with in-store digital advertising provider Vibenomics, CPG suppliers can leverage data and insights to create in-store audio strategies that complement their in-store programming across the AD Retail Media channel mix.

Ahold Delhaize USA, based in Chicago, operates over 2,000 stores in 23 states.