Ahold Delhaize: Supermarket conglomerate Ahold Delhaize (AD.AS) announced a revision of its 2023 earnings projections and highlighted margin challenges in its primary market, the United States. This adjustment resulted in a 7% decline in the company’s shares. Despite retailers benefiting from rising prices over the past two years, they now face tightening margins as food price inflation recedes and consumers exercise spending restraint.
Ahold Delhaize, known for operating chains like Stop & Shop, Giant, Food Lion, Hannaford in the U.S., and Albert Heijn and Delhaize in the Netherlands and Belgium, has revised its 2023 underlying earnings per share guidance to slightly below the previous year’s level.
Initially, the company anticipated annual profits on par with 2022. In its statement, Ahold Delhaize acknowledged that U.S. margins in the third quarter grew less than expected. However, the company expects this margin pressure to be temporary, resolving in a couple of quarters.
Also Read: Global Food Prices Hit 2-Year Low: Whats Behind the Decline?
CEO Frans Muller attributed this situation to a reduction in federal Supplemental Nutrition Assistance Program (SNAP) benefits, increased interest rates, and the resumption of student loan repayments in October, all negatively affecting customer sentiment. Coupled with stubbornly high inflation, these factors have caused anxiety among many customers, leading them to opt for the company’s more affordable private label products.
As the holiday season approaches, Ahold Delhaize is focusing on promoting private label goods and enticing customers with offers like converting loyalty points into free seasonal items, including pumpkin pie, as well as Thanksgiving turkey promotions.
For the third quarter, the group reported underlying operating income of 839 million euros, slightly below the consensus forecast of 856 million euros. CEO Frans Muller expressed confidence that the margin pressure in the U.S. would be short-lived, likely lasting only a couple of quarters.
Our Reader’s Queries
What does Ahold Delhaize own?
Ahold Delhaize USA, with headquarters in Quincy, Mass., and Salisbury, N.C., boasts an impressive portfolio of retail banners including Stop & Shop, Giant Food, Giant/Martin’s, Food Lion, Hannaford, FreshDirect, and Peapod. Their 2020 sales reached a staggering $51.84 billion (U.S.), and they currently operate 2,028 locations as of April 4, 2021. Kevin Holt serves as the CEO for the U.S. division. These details were sourced directly from Ahold Delhaize.
What companies are under Ahold Delhaize USA?
Ahold Delhaize USA is the parent company for Ahold Delhaize’s U.S. companies, which include local brands such as Food Lion, Giant Food, The GIANT Company, Hannaford, and Stop & Shop. Additionally, it oversees U.S. services companies like Retail Business Services, Peapod Digital Labs, and ADUSA Supply. As a division of Netherlands-based Ahold Delhaize, Ahold Delhaize USA plays a crucial role in the company’s operations in the United States.
Is Food Lion owned by Ahold?
Established in Salisbury, N.C. in 1957, Food Lion is a subsidiary of Ahold Delhaize USA, the American arm of Zaandam’s Ahold Delhaize. To learn more, please visit foodlion.com.
Is Ahold Delhaize a Dutch company?
Based in Zaandam, the Netherlands, we are a team of change-makers who are unafraid to take bold and innovative steps. Our commitment to doing what’s right has earned us the trust of our customers. We work together, taking ownership and collaborating to achieve success.