Dive Brief:
- Ahold Delhaize reported a decrease in net sales within the U.S. for the fourth quarter of 2024. Despite this decline, the company experienced increases in same-store sales and operating income during the same period.
- In the fourth quarter, U.S. sales totaled €13.9 billion ($14.4 billion) at constant exchange rates, marking a 0.6% decrease. However, same-store sales, excluding gasoline, rose by 1.4%, and operating income saw a remarkable increase of over 30%, reaching €568 million.
- The closure of several underperforming Stop & Shop stores last year negatively impacted net sales in the U.S. by approximately 110 basis points, as noted by CFO Jolanda Poots-Bijl during an earnings call.
Dive Insight:
Ahold Delhaize continues to navigate the repercussions of its strategic decisions made in the previous year, including the downsizing of its Stop & Shop chain and the sale of the FreshDirect e-grocery business. Nevertheless, during the earnings call, President and CEO Frans Muller expressed satisfaction with the company’s current performance in the U.S. market.
For the entirety of 2024, Ahold Delhaize’s U.S. net sales amounted to €54.2 billion, reflecting a year-over-year decline of just under 1%. However, operating income rose by over 8%, reaching €2.2 billion for the year.
The Stop & Shop chain experienced “positive effects” from initiatives aimed at reducing prices and enhancing private label offerings in the fourth quarter. Muller indicated that early indicators in 2025 suggest that these price investments are beginning to yield positive results. However, he also projected that the closures of Stop & Shop locations would result in a revenue loss for the company between $550 million and $575 million this year.
Looking ahead, Muller announced that The Giant Company plans to open two new stores in 2025. He highlighted that approximately 95% of the chain’s more than 190 locations have been remodeled to align with the latest store design. Ahold Delhaize also has plans to introduce 12 new supermarkets across its various U.S. brands this year.
In terms of digital sales, Ahold Delhaize reported a year-over-year decline of just under 1% in the U.S. for the fourth quarter. However, Poots-Bijl noted that had the company not divested FreshDirect, U.S. digital sales would have seen an impressive increase of 10.9%. Food Lion, one of the company’s banners, recorded significant online sales growth, which helped mitigate some of the negative impacts related to the FreshDirect sale. Notably, Food Lion has marked its 49th consecutive quarter of comparable-store sales growth, maintaining its status as the strongest performer within Ahold Delhaize’s portfolio.
Muller remarked that Ahold Delhaize’s private label sales in the U.S. have outpaced sales of branded products, both in dollar and unit sales. This trend underscores the company’s ongoing efforts to build brand awareness for its private labels.
When asked during the earnings call about the possibility of a merger with Kroger, Muller refrained from providing a definitive answer. He reiterated that Ahold Delhaize remains open to exploring inorganic growth opportunities that align with the company’s strategic objectives. “We have a strong balance sheet, as you know, so we have the firepower in itself,” Muller remarked, assuring stakeholders that the company would communicate any further developments regarding mergers and acquisitions in the future.
