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ZAANDAM, Netherlands — Ahold Delhaize said its global retail portfolio reported sales growth of 8.3% in its first quarter as food-at-home consumption continued to prove resilient. Sales benefited from recent store acquisitions as well as favorable currency rates; at constant exchange rates, net sales increased 3.6% in the period to April 3.
Net sales at Ahold Delhaize USA — the company’s largest business unit — increased 5.8% to $13.6 billion.
Frans Muller, Ahold Delhaize’s president and chief executive officer, said he was pleased with the strong start to the fiscal year. He also raised the full-year outlook for the retailer.
“In times like these, our strong global portfolio of local brands provides distinct competitive and societal advantages,” Muller said. “This allows us to successfully navigate short-term market volatility and, at the same time, provide financial stability and operational bandwidth to focus on our long-term growth agenda.”
U.S. comps rose 4.1% overall and increased 3.3% excluding fuel, building on a 1.5% gain (1.7% excluding gas) in the year-earlier period.
The company’s U.S. grocery retail banners are Stop & Shop, Giant Food, Giant/Martin’s, Food Lion and Hannaford, as well as online grocer FreshDirect.
“Food Lion, in particular, with its 38th consecutive quarter of growth, is one of the top-performing brands in the U.S. right now, with close to double-digit comparable sales,” Muller said.
The operating margin at the U.S. unit declined 0.4% to 4.4%, with gains from higher prices and cost-saving measures partially offset by higher labor, distribution and energy costs.
Grocery sales on Ahold Delhaize USA digital platform increased 4.6% to just over $1 billion in the fiscal first quarter, on top of the 188% jump in the year-earlier period.
“As the industry is rapidly shifting to more same-day delivery options, we are positioning ourselves to accelerate in this space,” Muller said during the company’s earnings call. “For example, in the United States, we have over 1,400 pickup points and have added new instant delivery options with partners such as Instacart.”
Muller also cited gains at the company’s Stop & Shop and FreshDirect businesses. Stop & Shop recently signed and ratified a new four-year labor contract with unions representing over 60% of the unit’s workforce. It also introduced an omnichannel program, The Helpful Chef, to deliver meal solutions to customers. And the chain is in the midst of a multiyear store upgrade initiative, with 40 more stores expected to be completed in 2022.
The company reported that its Peapod Digital Labs continues to invest in fulfillment operations, both in-store and in central fulfillment warehouses, to automate picking and optimize delivery routes to get orders to customers faster with less human involvement.
