Ahold Delhaize’s Q1 results boosted by ecommerce

Date : 13 May 2021

Jon Wright

Head of Insight - RA EMEA

Ahold Delhaize saw net sales rise 5.8% to €18.3 bn in the first quarter, driven by its operations in Europe and its online channel. On a two-year comparable basis Ahold Delhaize said sales, excluding gas, increased 15.5% in the US, and by 18.1% in Europe. Comparable sales growth excluding gas stood at 4.2% in Q1, with the US seeing sales rise 1.7% and its European operations rising by 8.3%.

Underlining the continued strength of its online sales, the retailer reported ‘net consumer online sales sequentially accelerated to 103.3% in Q1 at constant exchange rates’. It reported net consumer online sales reached €2.68 bn in its first quarter.

Omnichannel strategy underpinning positive outlook and growth

In its Q1 results, Ahold Delhaize underlined the benefits of its focus on its to ‘solidify its position as an industry-leading local omnichannel retailer’. It said the initiatives it had put in placed were enabling it to raise its target for Group net consumer online sales to 40% in 2021, from 30% previously.

The company said the raising of its outlook for the channel was being driven by three key initiatives:

  • Step-up online capacity, supply chain and technological capabilities: this would lead to increased capacity in the US and Europe, while a new fulfilment centre was opened in the Netherlands, and its first in the Czech Republic set to be opened in 2022. Finally, the retailer said the transformation of its supply chain in the US was ‘progressing as planned
  • Advance omnichannel offerings: it is set to launch Ship2Me in the US in H2 2021, will expand the coverage of its AH Compact no-fee home delivery service in 2021, while it had introduced 2-hour or less delivery in Greece and Romania, which it would look to expand to further cities in the medium term
  • Improving omnichannel productivity: it is doing this, in the US, through improvements to processes, systems, operating practices and innovation. Ahold Delhaize highlighted the use of an AI-enabled end-to-end forecasting and replenishment system at Food Lion and Hannaford, which it said it would expand to Giant Food, Giant Company, and Stop & Shop in 2021

US: net sales up +3.6% to €10.7 bn

In the US Ahold Delhaize reported total sales rose 3.6% at constant exchange rates, to €10.7 bn, with comparable sales growth excluding gas up by 1.7%. Net consumer online sales surged by 188.3% to €855m, although this was boosted by the acquisition of FreshDirect. However, excluding the acquisition the retailer said online sales sequentially accelerated to 135.2% versus the 128.5% growth Q4 2020. The acceleration in growth led it to raise its forecast for online growth for 2021 to ‘over 70%’, compared to 60% previously.

Online sales were underpinned by the addition of capacity, with 1,139 click and collect points in operation at the end of Q1. It is targeting 1,400 being in operation by the end of 2021. It continued to expand coverage of other fulfilment options, with ‘market household coverage of (more than) 95% with home delivery and click and collect, and (over) 94% with same-day options’.

Europe: net sales +5.8% to €18.3 bn

A similar picture was seen in Europe, with strength in store sales powerfully supported by online growth. The retailer reported it had made market share gains in both Belgium and the Netherlands in Q1. In Belgium it highlighted the positive impact from Delhaize’s SuperPlus loyalty programme, which it said had provided a ‘sales uplift’. Online sales had seen a ‘sequential acceleration’ in Q1 to 78.6%, versus 73.4% in Q4 2020. Bol.com continued to play a key role in this growth, with net consumer sales at the brand increasing by 76.6% in Q1. The continued positive performance of Bol.com led Ahold Delhaize to raise its sales target to ‘at least €5.5 bn in 2021… versus at least €5 bn previously’.

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