Strong Performance in US and Europe Drives Ahold Delhaize Q2 Results

Netherlands-based multinational grocer Ahold Delhaize reported strong second-quarter 2023 earnings results, driven by growth in loyalty and online sales.

The food retailer reported operating income of 904 million euros (about $992 million), topping the 859 million euros (about $943 million) expected by analysts in a company-compiled poll, and a 4.3% net sales growth to 22.1 billion euros (about $25 billion).

“The agility and flexibility that our brands and associates are showing, adjusting quickly to meet customers’ needs while, at the same time, diligently staying the course on our various transformation projects, underpinned the company’s strong performance this past quarter,” Ahold Delhaize President and CEO Frans Muller said in a Wednesday (Aug. 9) press release.

The results were driven by strong performance in the United States and Europe, the company noted in the release. In the United States, sales rose 2.7% and underlying operating income totaled 623 million euros (about $684 million), while in Europe, revenue jumped by 7% and underlying operating income was 267 million euros (about $293 million).

In March, Ahold Delhaize’s Belgian brand, Delhaize, announced plans to transform all its integrated supermarkets in Belgium into independently operated Delhaize stores, as part of efforts to strengthen its position in the country’s competitive retail market, according to the release.

“Ahold Delhaize supports the intention to transform to one aligned operating model, which will allow the brand to better serve customers in the long term,” the company said in the release. “By having all stores operated by local entrepreneurs in the future, Delhaize will have a better opportunity to respond to local conditions.”

Overall, despite “more evidence that inflation has passed its peak,” the Dutch retailer said in the release there’s been a notable impact on its European margins due to higher energy, commodity, transport and labor costs.

In the U.S., Ahold Delhaize-owned, North Carolina-based grocer Food Lion and Maine-based supermarket chain Hannaford continue to lead brand performance, the grocer noted in the release, with Food Lion delivering positive sales growth for the 43rd consecutive quarter.

Additionally, online sales in the segment increased by 6.6%, driven primarily by double-digit growth at Food Lion, which opened over 100 additional click-and-collect locations compared to Q2 2022, per the release.

In September, Food Lion, which has 1,100 stores across 10 states, announced the addition of Food Lion To Go pickup options to two dozen more stores in North Carolina and Kentucky in a move to drive sales with eCommerce customers. The addition was expected to boost the total count of stores at which the service is available to more than 600.

In the meantime, the company said in the release it is closing a facility in New Jersey, effective March 2024, as part of plans to “orient our online fulfillment capabilities toward same-day delivery models.” In its place, it will use its existing Stop & Shop store network and partners to serve customers in the area going forward.