AHOLD REPORTS STRONG YEAR, OUTLINES STRATEGY

GREG GATTUSO

ZAANDAM, Netherlands -- Executives from Ahold here reported a strong 1997, and outlined a two-pronged growth strategy for the new fiscal year.

Fiscal 1997 saw a 38% increase in sales over the prior year to $25.3 billion (NLG 50.6 billion); and 48% increases in both operating results to $900 million, and consolidated net earnings, $466.9 million.

Cees van der Hoeven, president, said 1997 was the first full year of contribution from its acquisition of Stop & Shop, Quincy, Mass.

"Stop & Shop has not only proved capable of generating excellent results itself, but has also become a booster for Ahold USA as a whole," he said. "Stop & Shop's contribution to synergy among our four operating companies and its contributions as coach and mentor to our Latin American operations are outstanding and add an extra dimension to our activities."

With U.S. sales of $14.3 billion, van der Hoeven said, the company is no longer concerned if one of its chains -- which also include Tops, Finast and Bi-Lo -- "goes through a rough patch," he said.

Ahold also reported a strong year for its Dutch chains, Albert Heijn and Schuitema. Albert Heijn recently expanded its operating hours and rolled out a frequent-shopper card. Both chains will have expanded product offerings and ready-to-eat/ready-to-heat meals, he noted. Sales were also strong in Portugal, Spain, Poland and other European markets.

The company also reported strong results in its emerging markets, Asia and South America.

Ahold said it would grow through two ways in 1998:

By strengthening its position in existing markets through expansions, improved efficiency and U.S. acquisitions.

By growing in new markets -- Asia, Latin America and Southern and Central Europe -- though acquisition, new store construction and joint ventures.

"The food-retail sector is characterized these days by an accelerated consolidation process all over the world that will inevitably lead to the cards being reshuffled," van der Hoeven said. "Important positions on all continents are being relinquished and retaken.

"We intend to be a prominent frontrunner in the vanguard of the industry, because we are convinced as a global retailer that if we can benefit from economies of scale, our knowledge and experience, our state-of-the-art IT platforms, cooperation with significant suppliers, distribution and logistical advantages, global sourcing and joint private-label products."

Ahold reported sales in the first quarter grew 14.6% to $8.05 billion. In the United States, sales were $4.5 billion, an increase of 5%. Full results are expected to be released June 11. About 1,300 people attended the annual meeting, which was moved this year to accommodate the larger crowd.

In a separate announcement last week, the company said it had acquired seven supermarkets in Malaysia from Yahona Corp.